TMI Blog2012 (5) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... H, A.M. JJ. For the Appellant : Ms. Aarti Vissanji For the Respondent : Shri P.C. Maurya ORDER PER RAJENDRA SINGH, AM: This appeal by the assessee is directed against the order dated 13.5.2011 of CIT(A) for the assessment year 2007-08. The only dispute raised in this appeal is regarding disallowance of interest under section 36(1)(iii). 2. The facts in brief are that AO during the assessment proceedings noted that the assessee had made payment of ₹ 1,71,11,300/- for purchase of the property at Bharat Diamond Bourse which included a sum of ₹ 27,91,800/- paid during the year. Similarly, assessee had also paid a sum of ₹ 10.00 lacs for purchase of property at Gujarat Hira Bourse at Surat. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f bank charges which were not relevant for acquisition of assets. Aggrieved by the said decision revenue is in appeal before the Tribunal. 3. Before us, the ld. AR submitted that the assessee had not made payments out of borrowed funds. Referring to balance sheet placed on record it was pointed out that the assessee had own funds of ₹ 4.40 crores and there were interest free borrowings of ₹ 8.13 crores. Besides, the profit of the assessee during the year was ₹ 75.00 lacs. Thus fresh payments made during the year of about ₹ 27.00 lacs were easily explained from own funds. The ld. AR also referred to the decision of the Tribunal in assessee s own case in case assessment year 2006-07 in ITA No.6245/Mum/2010 in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year profit of ₹ 96.00 lacs. The Tribunal therefore, treated the source of ₹ 10.06 lacs as explained from own funds. Facts in this year are identical. Assessee during the year had own funds of ₹ 4.40 crores and interest from the borrowings ₹ 8.13 crores, in addition to current year profit of ₹ 75.00 lacs. In our view the payment of ₹ 27.91 lacs during the year is easily explained from own funds. Even the current year profit can easily explain source of such payment. We, therefore, see no reason of making addition. We therefore set aside the order of CIT(A) and delete the addition made. 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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