TMI Blog2012 (8) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... in the company, wherein the assessee is a Director, will result only in dividend income which undoubtedly, would be hit by Section 14A. Nothing has been brought on record that by lending the money to the company by the assessee, from his own borrowed funds, has any direct or indirect nexus for the business purpose of the assessee. Therefore, in our opinion, there is no merit in the contention raised by the assessee and accordingly, we uphold the order of the CIT(A) and dismiss both the appeals filed by the assessee for the assessment years 2005-06 & 2006-2007, respectively. - ITA No.43/Mum/2010, ITA No.44/Mum/2010, ITA No.45/Mum/2010 - - - Dated:- 22-8-2012 - SHRI P.M.JAGTAP, AM SHRI AMIT SHUKLA, JM Appellant by : Shri V.G.Ginde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been legally made in the assessment order u/s.153A, there being no reference to any incriminating material having any bearing on the appellant s claim for deduction of interest. Similar additional grounds have been taken in the assessment years 2005-2006 2006-2007 also. On merits, the only issue involved in all the three appeals is disallowance of interest on the ground that borrowed funds have not been utilized for the business purposes. 3. So far as the status of the return and assessment is concerned, upto the date of search i.e. 4-10-2006 for the various assessment years, the same are given hereunder :- Assessment Year Date of Original Return filed Date of Intimation/Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have already completed or attained finality, then there is no question of any abatement since no proceedings are pending. Thus, so far as the assessment year 2004-2005 is concerned, no assessment proceeding was pending and it had attained finality prior to the date of search and, therefore, such an assessment will not get abated in view of the provisions of Section 153A. 4. As regards other years i.e. assessment years 2005-2006 2006-2007, the assessment proceedings were still pending, and, hence, for the purpose of Section 153A, the assessment for these years will get abated. On these additional grounds, learned counsel has relied upon the decision of the Special Bench in the case of M/s All Cargo Global Logistics Ltd. Vs. DCIT, passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not based on any seized material or documents found during the course of search and seizure. Therefore, such a disallowance made on interest of `.5,14,953/- for the assessment year 2004-2005 stands deleted on the ground that the same is beyond the scope and purview of assessment under Section 153A. In the result, appeal for the assessment year 2004-2005 (i.e. ITA No.43/M/2010) stands allowed. 6. However, as regards the appeal for the assessment years 2005-06 2006-07, the position is entirely different as none of the assessment had attained finality and the same were pending at the time of search, therefore, such assessments got abated and the Assessing Officer retains the original jurisdiction as well as jurisdiction conferred on him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dend income, which is exempt and, therefore, as per the provision of Section 14A, the same cannot be allowed. 9. Learned CIT(A) too concurred with the findings of the Assessing Officer after observing and holding as under :- 2.3.1 I have carefully and dispassionately considered the facts and circumstances of the case, the relevant assessment orders, statement of facts, written submissions made and arguments made by the appellant. It is not disputed that the appellant paid interest of `.5,14,953/-, `.8,87,639/- and `.7,04,563/- for F.Y.rs. relevant to A.Yrs. 2004-05, 2005-06 and 2006-07 respectively. The admissibility of this interest u/s.37(1) of the Act has been examined by the Ld. Assessing Officer and he has held that such interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and in light of the aforesaid Jurisdictional High Court s decisions, the disallowances made by the Ld. Assessing Officer for the A.Yrs. 2004-05, 2005-06 2006-07 are confirmed. As a corollary, the grounds of appeal are dismissed. 10. Before us, learned counsel submitted that such utilisation of borrowed funds is for the business purposes as the assessee has a special interest in the said company and relied upon the decision of the Hon ble Supreme Court in the case of S. A. Builders Ltd. v. Commissioner of Income-tax (Appeals), reported in 288 ITR 1. On the other hand, learned DR relied upon the findings of the CIT(A) as well as the Assessing Officer. 11. After carefully considering the rival submissions and als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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