TMI Blog2010 (10) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... or their personal benefit, then the deduction of interest has to be allowed - Hence, the learned CIT(A) has rightly relied on this judgement in deleting this addition - Decided in favour of assessee. - ITA Nos. 2090, 3034, 3035 and 3036/Mum/2008, ITA Nos. 1411, 2152, 2153 and 2154/Mum/2008 - - - Dated:- 27-10-2010 - R.S. Syal, Vijay Pal Rao, JJ. B. Senith Kumar for the Appellant Arvind Sonde for the Respondent ORDER Bench: This batch of eight appeals has four appeals for assessment year 2002-2003 and two each for assessment years 2003-2004 and 2004-2005. Since some common issues have been raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2008 5. These cross appeals arise out of the order of the CIT(A) on 19.02.2008 against the assessment order passed by the Assessing Officer u/s.143(3) r.w.s. 147. The learned A.R. did not press ground no.1 challenging the reopening of assessment. The same is, therefore, dismissed. 6. Ground nos.2 and 3 are against the confirmation of disallowance u/s.14A. The Department is also in appeal against the direction of the learned CIT(A) that the amount of Rs.96 crores and not Rs.800 crores be taken into account while considering the disallowance u/s.14A. Insofar as the assessee's appeal is concerned, the grievance is against the confirmation of disallowance of Rs.23,75,000 as interest attributable to the borrowed funds utilized in invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal is partly allowed for statistical purposes and that of the Revenue is dismissed. Asst. Year 2003-2004 : ITA Nos. 2153 and 3035/Mum/2008 8. These appeals arise out of the order passed by the CIT(A) on 26.2.2008 in respect of the captioned year. The only issue raised in the Departmental appeal is against the deletion of disallowance of Rs.37.66 crores made by the A.O. u/s.14A of the Act. The assessee in its cross appeal vide ground no.1 has challenged the sustenance of disallowance of Rs.6.01 crores u/s.14A. It is the common submission by both the sides that these grounds need to be reconsidered by the A.O. for taking a final decision in accordance with the judgement of the Hon'ble jurisdictional High Court in Godrejand Boyce Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be the reduced amount of interest that would form part of income of that year as it would be mistake rectifiable u/s.154 of the Act. In principle we hold that the interest on refund received by the assessee u/s.143(1)(a) in relation to assessment year 2001-2002 is taxable in this year as it was granted in the previous year relevant to the assessment year under consideration. It is however made clear that if the assessment has been finalized u/s.143(3) and such interest on refund has been reduced to some extent then such reduced portion of interest on income-tax refund be charged to tax in this year instead of going through the ritual of firstly including the entire amount of Rs.2.76 crores in the income for this year and thereafter allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n being called upon to explain as to why the interest be not disallowed, the assessee stated that the amount was advanced to subsidiary company not out of any specific borrowings but out of own funds. In the absence of any evidence to espouse the assessee's submission, the Assessing Officer held that the disallowance was called for. He, therefore, made an addition of Rs.13,67,800 towards interest as relatable to the interest free loan advanced to subsidiary company. The learned CIT(A) however ordered for the deletion of addition. 16. After considering the rival submissions and perusing the relevant material on record it is noted that the assessee made interest free advance to its subsidiary company which was incorporated for doing life ..... X X X X Extracts X X X X X X X X Extracts X X X X
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