TMI Blog2016 (6) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... et and its schedules for the year ending 31.03.2002. These factual datas clearly show that assessee is very much in business in the real estate and showing the same as stock-in-trade in its Balance sheet. Even in its Profit and Loss account, the assessee has shown ₹ 63,46,92,800/- as sale of building & forfeiture receipts. Our aforementioned factual observations clearly show that the revenue authorities have grossly erred in not accepting assessee’s contention that is one of the businesses is in real estate. The Tribunal in the first round of litigation has directed the assessee to establish direct nexus between the advancing of money to SSKI and its commercial expediency. In our understanding of the fact, as mentioned elsewhere, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to Arvind Mills Ltd. Similarly, ₹ 10 crores received on 07.09.2001 was again paid to Arvind Mills Ltd. and ₹ 15 crores received on 27.11.2001 was given as loan/advance to SSKI on the very same date. 4. The assessee was asked to explain the purpose of the loan/advance made to SSKI along with the interest charged from it. The assessee explained the nature of transaction vide letter dated 27.02.2006 claiming that the advance is made out of the interest free funds available with the assessee. 5. This contention of the assessee did not find favour with the A.O who was of the firm belief that the assessee has utilized borrowed funds for non-business purpose and accordingly proceeded by computing the interest paid to HDFC Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again, the interest expense of ₹ 77,35,960/- in A.Y. 2002-03 ₹ 1,16,40,385/- in A.Y. 2003-04 were disallowed. The only reason given by the A.O for the disallowance is that the main business of the assessee is of finance and leasing, hire, purchase, invest to assist or subsidizing in purchasing of industrial and office plant, equipments machinery, vehicles movable assets, land building real estate and consumer goods of all kind by way of leasing here purchases. 10. Assessee carried the matter before the ld. CIT(A) but without any success. The First Appellate Authority was convinced with the A.O that the main object of the assessee company is not in consonance with the interest free advances and, therefore, there is no nexu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itigation. There is no dispute in so far as the finding of the Tribunal is concerned. All that is to be considered is whether the assessee had successfully established a direct nexus of lending/advancing the money to SSKI qua its commercial expediency. 14. On a careful perusal of the Memorandum of Association of the assessee company, we find that the findings of the revenue authorities is exclusively based on clause 1 which read as under:- To carry on business of finance and leasing company, to finance, and to give on lease, hire, purchase, invest and to assist or subsidizing in purchasing of industrial and office plant, equipments machinery, vehicles, movable assets, land and building, real estates and consumer goods of all kind by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Sheet and its schedules for the year ending 31.03.2002. These factual datas clearly show that assessee is very much in business in the real estate and showing the same as stock-in-trade in its Balance sheet. Even in its Profit and Loss account, the assessee has shown ₹ 63,46,92,800/- as sale of building forfeiture receipts. 19. Our aforementioned factual observations clearly show that the revenue authorities have grossly erred in not accepting assessee s contention that is one of the businesses is in real estate. The Tribunal in the first round of litigation has directed the assessee to establish direct nexus between the advancing of money to SSKI and its commercial expediency. In our understanding of the fact, as mentioned el ..... X X X X Extracts X X X X X X X X Extracts X X X X
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