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Commissioner of Income Tax-3, Mumbai Versus M/s. Fitwell Real Estate Pvt Ltd

2015 (8) TMI 281 - BOMBAY HIGH COURT

Disallowance of interest on borrowed capital u/s 36(1)(iii) - ITAT confirming the order of the CIT(A) in directing to allow the claim - Held that:- It was not the case of the revenue that the finding of the Commissioner of Income Tax (Appeals) that the borrowed money was utilized for the purpose of business, is not correct and/or perverse. Similarly, in the present appeal challenging the impugned order of the Tribunal no ground challenging the factual finding of the activities has been urged in .....

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he purposes of business. The issue stands covered by virtue of a decision of Core Health Club Ltd., (2008 (2) TMI 8 - SUPREME COURT OF INDIA ). The decision cited by Mr. Chhotaray in the case of Challapalli Sugars Ltd. (1974 (10) TMI 3 - SUPREME Court) would have no application to the present facts. In this case there is concurrent finding of fact that the amounts have been utilized in the carrying on business and one of the business carried out by the respondent-assessee was that of a Estate Ag .....

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ppellant took out a notice of motion seeking recalling of the order dated 21 October 2008 dismissing the appeal for default. Thereafter, the revenue did not move to have the matter urgently circulated. The above notice of motion taken out by the revenue came up for hearing on 17th July 2015. At which time we allowed the notice of motion and placed the appeal for admission. It is in the above circumstances that the appeal of 2008 has come up for admission in 2015. 3. The appellant revenue has rai .....

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wed the interest paid by the respondent-assessee amounting to ₹ 18.37 lacs holding the same to be non-business expenditure. In appeal, the Commissioner of Income Tax (Appeals) deleted the same after recording a finding that the funds were borrowed for the purpose of business. In particular, it held that the appellant had borrowed capital which was used for the purpose of business. The borrowed funds were used in order to repay the loans already taken from the Directors and were also utiliz .....

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Core Health Club Ltd., reported in (2008) 298 ITR 194 (SC). Thus, the appeal be dismissed. 7. However, Mr. Chhotaray, learned counsel appearing for the revenue does not agree. It is submitted that the respondent-assessee was carrying on business of construction adopting the project completion method. Therefore, this interest if at all could be deducted at the time when the project is completed. It is further submitted by Mr.Chhotaray that there was no substantial business was carried out as an a .....

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y on behalf of the revenue would require investigation into facts when these points were not urged by the revenue before the Tribunal as is evident from the grounds of appeal filed by the revenue before the Tribunal, which read as under : "1(a). On the facts and circumstances of the case and in law, the learned C.I.T.(A) erred in deleting the disallowance of interest, amounting to ₹ 18,37,245/. 1(b). On the facts and circumstances of the case and in law, the learned C.I.T. (A) erred i .....

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