TMI Blog2012 (12) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... f loan has undergone a change. Issue decides in favour of assessee - ITA no. 848/Mum./2008 - - - Dated:- 25-7-2012 - SHRI R.S. SYAL AND SHRI AMIT SHUKLA, JJ. Assessee by : Mr. Rajeev Khandelwal Revenue by : Dr. P. Daniel ORDER PER AMIT SHUKLA, J.M. The present appeal preferred by the assessee, is directed against the impugned order dated 10th January 2008, passed by the learned Commissioner (Appeals) VIII, Mumbai, for the quantum of assessment passed under section 143(3) of the Income Tax Act, 1961 (for short the Act ) for assessment year 2002 03. 2. In ground no.1, the assessee is aggrieved by the disallowance of business loss including transaction backed delivery as non genuine in nature. 3. At the very outset, the learned Counsel, on behalf of the assessee, submitted that this issue stands covered in favour of the assessee by the decision of a co ordinate bench of the Tribunal in assessee s own case for assessment years 2001 02, 2003 04 and 2004 05. Learned Departmental Representative, on the other hand, did not dispute this fact. 4. After going through the order passed by the Tribunal for assessment years 2003 04 and 2004 05 in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 02, in the following manner: Ground No. 3 is against the disallowance of interest of Rs.17,47,23,076/-. This figure consists of interest payable to bank amounting to Rs.17,18,48,723/- and, interest payable to others amounting to Rs.28,74,353/-. As far as interest payable to banks is concerned, this Bench of the Tribunal in the assessee s own case for the earlier assessment year 2001 02 at para 18, 19 19.1 at page 14 and 15 observed as follows: 18. After considering the submissions and perusing the material on record, we find that the assessee deserves to succeed in this ground also. It is seen that the interest free funds were utilized for its commercial expediency. There was voluminous funds were available with the assessee on which no interest was paid and it can be easily inferred that from these funds; funds were advanced to its sister concerns. It is further seen that even the funds given to its sister concerns were for the purpose of its commercial expediency, and therefore, in view of the decision of the Apex Court in the case of SA. Builders Ltd. (supra), disallowance cannot be made wherein it held that, if funds are given to the sister concerns on which n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of loan taken from the k; the interest on which was directed to be allowed in the earlier paragraph. The loan taken from Ratnakar Bank is said to have been repaid from the loan taken from of Foolchand Sons. Similarly in the case of C.J.Dalal it can be seen that in the earlier financial year 2001-02 the assessee received certain amounts and utilized the same for repayment of loans taken from KVP. Thus in this case also the borrowing were in the earlier assessment. year and the utilization of these loans were also done in the earlier assessment year and the Tribunal on consideration of these facts had allowed the claim of the assessee. Consistent with the view taken therein, we direct the Revenue to allow the claim of interest made by the assesse. 8. Thus, in view of the aforesaid decision, we set aside the impugned order passed by the learned Commissioner (Appeals) and allow ground no.2, raised by the assessee. 9. In ground no.3, the assessee has challenged the learned Commissioner (Appeals) s action for not admitting additional ground of appeal pertaining to non allowability of interest of Rs. 5,88,50,029, paid to the bank on unsecured loans obtained by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account but left a note in B-4 of Schedule J in the annual accounts that so much of the amount has not been provided for. Not only that assessee also placed account copy of the MMCB indicating that the amount chargeable for the period on loan obtained was quantified at Rs. 9.93 crores. On the facts of the case, eventhough the same amount is not provided for in the books of account the claim is an allowable deduction in the computation of income as the liability is certain. Quantification of the amount may vary according to the terms of agreement, in case the said bank has taken the matter to the Court as per the orders of the Court but since the amounts are borrowed the liability to pay interest for the whole year has crystallised in view of this the amount debited to assessee s account by the said bank in the bank statement at Rs. 9,93,67,932/- is certainly an allowable amount. Assessee relied on many case laws to support that the entries in the books of account are not paramount and the liability is an allowable claim. Since there is no denial of the fact that assessee has borrowed funds and interest for the whole year has to be allowed as deduction, not providing the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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