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2018 (1) TMI 81 - AT - Income TaxReopening of assessment - interest disallowance u/s 36(1)(iii) - AR has contended that there was no extension of existing business and secondly, interest free funds in the shape of Share Capital & free reserves far exceeded the Capital Work-in-progress - Held that:- These contentions could nowhere be rebutted / controverted either by any of the lower authorities or Ld. DR before us. From the perusal of financial statements, it is quite evident that the interest free funds in the shape of Share Capital & Free Reserves far exceed the closing capital work-inprogress and moreover, the reserves & surplus has grown from 8053.44 Lacs to ₹ 10818.15 Lacs and therefore, a presumption has to be drawn that the CWIP was carried out by the assessee out of own interest free funds. The lower authorities could nowhere prove the nexus of borrowed funds with CWIP being carried out by the assessee despite being pointed out by the assessee before lower authorities. It is also uncontroverted fact that there was no extension of existing business by the assessee. Hence, we are unable to concur with the view taken by Ld. CIT(A) and therefore, inclined to reverse the same. Hence, by deleting the impugned additions, we allow assessee’s appeal.
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