TMI Blog2013 (12) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 20.8.1969 has declared that if the second borrowing has really been used merely to repay the original loan and this fact is proved to the satisfaction of the ITO, the interest paid on the second loan would also be allowed as a deduction u/s. 24(1)(vi) – Decided in favour of assessee. - I. T. A. Nos.2243 & 6129/Mum/2011 - - - Dated:- 8-2-2013 - Shri B. R. Mittal, JM And Shri N. K. Billaiya, AM,JJ. For the Appellant : Shri J. D. Mistry Shri Niraj Sheth For the Respondent : Shri Rajarshi Dwivedy ORDER Per N. K. Billaiya, AM:- These two appeals are directed by the assessee against two separate orders of the Ld. CIT(A)-9, Mumbai dt.24.12.2010 30.6.2011 respectively pertaining to A.Yrs. 2007-08 2008-09. As both these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Out of the same, Rs. 42.50 crores was utilized for purchase of TDR and balance was utilized in repaying loan taken from another company in earlier years. 4. After considering the submissions of the assessee, the AO was of the opinion that during the year under consideration, there is no transaction of purchase or sale of TDR. The AO further observed that the company has borrowed loan from Peninsula Land Ltd., to repay the loan of ACT Ltd. The AO further observed that the assessee borrowed money for the first time in F.Y. 2004-05 of Rs. 50.38 crores which decreased to Rs. 7.74 crores in F.Y. 2005-06. The entire loan was repaid during the financial year 2006-07 and a fresh loan of Rs. 23.34 lacs was taken from the same entity. The AO finall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid at Rs. 6.07 crores. The interest paid during the year is at Rs. 85,17,298/-. The Ld. Sr. Counsel submitted that this interest has been disallowed by the AO by not appreciating the fact that the borrowings have been done to repay the earlier borrowings which was accepted as money borrowed for the purpose of business. It is the say of the Ld. Sr. Counsel that interest paid on borrowed capital relates to the business therefore the same deserves to be allowed. 7. Per contra, the Ld. Departmental Representative relied upon the orders of the lower authorities. 8. We have considered the rival submissions and carefully perused the orders of the lower authorities and the paper book submitted by the assessee. The factual matrix as mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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