TMI Blog2014 (5) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... he order dated10. 01. 2011of the CIT(A)-7, Mumbai, assessee-company has filed appeals for the above referred two Assessment Years(AY. s)raising identical Grounds of Appeal. Grounds of appeal for the year 1997-98 read as under: 1. On the facts and in the circumstances of the case, the Learned CIT (A) erred in confirming the disallowance of interest of Rs. 9, 23, 148/-. 2. Appellant craves leave to amend or alter the existing Ground or add further Ground at the time of hearing. Following are the grounds for the AY. 2001-02: 1. On the facts and in the circumstances of the case, the Learned CIT (A) erred in confirming the disallowance of interest of Rs. 1, 59, 99, 452/-. 2. Appellant craves leave to amend or alter the existing Ground or add further Ground at the time of hearing. ITA/2960/M/2011-AY. 1997-98:Brief facts and history: 2. Effective Ground of appeal pertains to disallowance of interest expenditure of Rs. 9, 23, 148/-. Assessee-company, had filed its return of income declaring net loss of Rs. 30, 05, 061/-. Assessing officer(AO)finalised the assessment order u/s. 143(3) of the Act, on 15. 03. 2000. During the assessment proceedings, AO found that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal obligation, but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency, Respectfully following the decision of the Hon ble Supreme Court in the case of S. A. Builders (supra), we restore the issue to the file of the Assessing Officer for both the assessment years under appeal with the following directions: 1) To examine the facts in the light of decision in the case of S. A. Builders (cited supra). While so examining, he will also examine, as rightly submitted by Learned DR. , the utilization of funds by borrower also in order to reach correct conclusion. 2) If there is mixed up funds then the disallowance be made proportionately in the ratio of interest bearing to non interest bearing funds. Thus, the matter stood restored to the file of the AO for framing the assessment order on the basis of the directions given in this behalf by the ITAT. In the proceedings before the AO assessee made detailed submissions. After perusing the same, the AO held that interest free loans were advanced to IENB were not in the ambit of commercial expediency, that the lease agreement entered by the assessee company with IENB was a business a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing funds available with the assessee that were advanced to IENL and had held that certain portion of the interest expenditure was allowable. We further find that ITAT in its order (supra) had specifically directed the AO to look in to the issue of utilisation of funds and to consider the commercial expediency angle before reaching at final conclusion. AO was specifically directed to make disallowance proportionately in ratio of interest bearing to non-interest bearing funds, if assessee had mixed funds. We find that while passing the order giving effect to the order of the ITAT, AO has observed that issue of disallowance to be made proportionately had no relevance with regard to commercial expediency. We also find that the AO had not deliberated upon the financial hardship of the holding company and relevant material. In the appeal filed by the assessee, before the FAA, it was specifically mentioned that AO had not adhered to directions of the Tribiunal, that disallowance out of interest payment and discounting charges was not warranted. Deciding the appeal against the assessee, FAA had held that he agreed with the observations and conclusions made by the AO in the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice. (i)Judicial or even quasi-judicial opinions these days can be as different as the judges and authori -ties who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j)Insistence on reason is a requirement for both judicial account-ability and transparency. (k)If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l)Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision-making process. (m)It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
