TMI Blog2017 (3) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had not furnished the necessary details before them. Therefore,we are of the opinion that in the interest of justice, matter should be restored back to the file of the AO for fresh adjudication, who would decide the issue afresh after affording a reasonable opportunity of hearing to the assessee. Effective Ground of appeal decided in favour of the assessee, in part. - ITA No.1470/Mum/2013, ITA No.1979/Mum/2013 - - - Dated:- 17-3-2017 - Shri Rajendra, A.M. and Sanjay Garg,J.M. For The Revenue : Shri Rajesh Kumar Yadav For The Assessee : Shri Pankaj Toprani Order u/s.254(1)of the Income- tax Act,1961(Act) Per Rajendra, AM: Challenging the orders of the CIT(A)-5,Mumbai, dtd.12.12.2012, the assesse and the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores ITA/1470/Mum/2013,AY.08-09: 3. E ffective ground of appeal, raised by the assessee, is about disallowance of interest of ₹ 57.29 lakhs claimed by the assessee u/s.57(iii) of the Act. During the assessment proceedings, the AO found that the assessee had claimed expenses on account of interest to bank, amounting ₹ 2,57, 29,167/-.He directed the assessee to justify the availability of said expenses against the source and to prove the nexus that such expenses had been incurred wholly and exclusively for earning income under the same head. In its reply dated 24/11/2010, the assessee submitted that it had given turnover of ₹ 10 crores to M/s. Fountain Head Motels Private Ltd. (FHMPL) for a sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of such amount was otherwise also not allowable as same was not incurred for the purpose of business.Referring to the provisions of section 43B(e) read with explanation 3D of the Act, the AO held that the assessee had not actually paid the interest and same had been converted into loan/advanced by the bank, that the interest expenditure would not qualify for deduction. Finally, he disallowed interest of ₹ 57.29 lakhs and added back to the income of the assessee. 4. A ggrieved by the order of the AO, the assessee preferred an appeal before the FAA. Before him, it was argued that there was some error in the submissions made before the AO, that the cheques were issued from the current-account and not from the overdraft ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had claimed interest expenditure of ₹ 57.29 lakhs, that it had tried to set it off against interest income of ₹ 61.87 lakhs, that it had claimed that a term loan of ₹ 10 crores was advanced to FHMPL on which interest income of ₹ 61.87 lakhs was earned, that the assessee had also claimed that the overdraft of ₹ 10 crores was financed from overdraft account, that in the remand report the AO had found that the assessee had advanced loan of movies 864.50 lakhs and ₹ 135.50 lakhs on 16/10/2007 from its current-account CA GN26545 on which interest was paid by the assessee, that it had not made any interest on the loans advanced i.e. ₹ 10 crores, that the assessee had not incurred an indirect expenses to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any direct nexus between the interest of ₹ 61.87 lakhs(paid on the overdraft account No. Term loan DRT 1), that there were two different and distinct accounts that were used for advancing interest-bearing loan to FHMPL, that the interest income of ₹ 61.87 lakhs had not been earned out of the overdraft account of the assessee (account number term loan DRT-1), that the interest expense of ₹ 57.29 lakhs was not incurred to earn interest of ₹ 61,87,500/-. Finally, he upheld the order of the AO. 6. D uring the course of hearing before us, the AR argued that the loan of ₹ 3 crores was given to the assessee on behalf of Ashok Mittal out of current account number 26630 belonging to Bellamy Investments and Trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hearing to the assessee. Effective Ground of appeal(GOA 1-3)is decided in favour of the assessee, in part. ITA.s./1979 1982/Mum/2013-AY.s.2008-09 2009-10 8. S olitary ground of appeal, raised by the AO in both the AY.s., is about disallowance of interest/discounting charges of ₹ 1.71 crores. It was brought to our notice by the AR that the stands decided against the AO by the orders for the earlier years. The DR stated that matter could be decided on merits. We find that the Tribunal for the AY.2001-02(ITA/5223/Mum/03, dtd. 21.09.2006),AY.2002-03(ITA/685/Mum/2006, dtd.29.05.2008), AY.2005-06(order dtd. 31.08.2009) AY.2006-07(order dtd.07.03.12), had dismissed the appeal filed by the AO. The Hon ble Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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