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TMI Blog2014 (1) TMI 1686X X X X Extracts X X X X X X X X Extracts X X X X ..... in disallowing the interest of Rs. 1,10,000/- paid by the assessee to sister concern Intersil Semiconductors Pvt. Ltd. 3.1 Briefly stated, the assessee, a company engaged in the business of manufacturers of software for product development and wealth care business, while declaring a total income at Rs. 2,71,17,770/- had in the P/L Account debited an amount of Rs. 14,37,918/- on account of interest paid. This included the interest paid to the bankers amounting to Rs. 1,04,906/-, interest paid on short term loan from Intersil Semiconductor Pvt. Ltd amounting to Rs. 1,10,000/- and interest on short term loan from Directors amounting to Rs. 12,19,416/-. In the assessment framed u/s 147 read with section 143(3) of the Act, the AO disallowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest free loan and made investments. In this context, the perusal of the balance sheet available at page 1 of the paper book indicates that the assessee has sufficient own funds to make loans and investments. When the fact being so, the ratio laid down by the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd (supra) is applicable in the case of the assessee to support the proposition that the assessee has made the loans and investments out of the surplus funds. Also, it is not disputed that the borrowed funds on which the interest paid to the sister concern is utilized for the purpose of business. Therefore, there need not be any doubt about the allowability of the interest expenditure claimed by the assessee u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion to page nos. 8 to 10 of the paper book has demonstrated the details of repair and maintenance charges of Rs. 14,77,234/- and also the relevant bills are available at Pages no. 11 to 48 of the paper book. Moreover, there is a confusion in the reasoning on the part of the AO and the Ld.CIT(A) in making and confirming the impugned disallowance. The AO disallowed the impugned claim of the assessee as the nature of repair in respect of the amount Rs. 14,77,234/- are not clear and the assessee has not provided any break up of expenditure despite the fact that the details have been produced before him whereas the Ld.CIT(A) confirmed the disallowance of 50% on a different reasoning that the said expenditure is capital in nature. Considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such loss will arise only on actual sale. Aggrieved by the impugned decision, the assessee has raised this ground in the appeal before us. 5.2 Having heard both the sides and perused the material on record, it is pertinent to mention that the assessee has claimed the impugned written off in respect of the stock as the business has become obsolete and the said stocks have been destroyed. The perusal of the orders of the authorities below indicates that the said claim of the assessee has not been properly verified while making/confirming the said disallowance. Considering the facts in toto, we are of the view that it is just and proper to set aside the issue to the file of the AO to verify the claim of the assessee whether the stock has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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