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2016 (12) TMI 361 - HC - Income TaxInterest on borrowed funds - disallowance of interest - Held that:- The respondent placed reliance upon the decision of this Court in Commissioner of Income Tax Vs. Reliance Utilities and Powers Ltd.[2009 (1) TMI 4 - BOMBAY HIGH COURT ] wherein this Court has held that where the assessee has its own interest free funds available then it should be presumed that the investment has been first made out of interest free funds. This submission of the respondent assessee has been recorded in the impugned order of the Tribunal. However, we find that the same has not been considered while dismissing the respondent assessee's appeal. This non-dealing with the decision of this Court in Reliance Utilities and Power Ltd. (supra) by the Tribunal even after recording the reliance upon the same by the respondent assessee would make the impugned order suspect. Ex facie, it is a breach of principles of natural justice. Thus, the question is answered in the negative i.e. in favour of the appellant assessee and against the Revenue. The impugned order dated 19th July, 2013 is set aside and the entire appeal is restored to the Tribunal for fresh disposal in accordance with law.
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