TMI Blog2009 (12) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... ollection of interest at Rs. 17.74 lakhs. The Assessing Officer works out interest attributable to funds diverted to another company without collection of interest at Rs. 14,76,510 and disallowed the same. The Commissioner (Appeals) enhanced the disallowance. The Tribunal deleted the disallowance. Held that- it was the duty of the Tribunal to decide the case with reference to the facts and not by just following the earlier year’s order. Dismissed the appeal. - 1640 of 2009 - - - Dated:- 18-12-2009 - RAMACHANDRAN NAIR C. N., MOHANAN V. K. JJ JUDGMENT The judgment of the court was delivered by 1. C. N. Ramachandran Nair J .-The appeal is filed by the Department against the order of the Tribunal cancelling the enhanced disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 187 ITR 363 (All) held that diversion of borrowed fund on which interest is paid by the assessee to sister concern without collecting interest calls for proportionate disallowance. He had worked out the interest attributable to funds diverted to another company without collection of interest at Rs. 14,76,510 and disallowed the same. 4. When the assessee challenged the same before the Commissioner of Income-tax (Appeals), he, in principle, completely agreed with the findings of the Assessing Officer and following the decision of this court in CIT v. V. I. Baby and Co. [2002] 254 ITR 248, reworked the interest to be disallowed on proportionate basis after notice to the assessee and enhanced the disallowance. It is pertinent to note from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we do not know what is the commercial expediency that the petitioner can canvass for advancing interest free loans to that concern. As already stated, the assessee has shifted the stand canvassed before the first appellate authority in second appeal before the Tribunal, and the Tribunal, without considering the facts by relying on their earlier order, allowed the claim. The Department has stated that the other year's case relied on by the Tribunal pertains to loans advanced to other companies and not to the investment company and the facts are different. We do not think, the Department is barred from filing appeal against one year's assessment merely because for another year, they have not contested the matter. The Tribunal's order is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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