TMI Blog2018 (2) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... :- The assessee had obtained secured loans of ₹ 2,20,80,792/-, whereas it had reserve surplus of ₹ 9,63,57,283/-, share capital of ₹ 10,30,45,000/- and share application money of ₹ 2,17,75,000/-. Thus, the assessee had considerable surplus funds in proportion to the secured loans. Under the circumstances, since the assessee had advanced interest-free loans out of its surplus funds, the question of disallowing the expenditure in respect of interest incurred on the borrowed funds did not arise, inasmuch as, no part of the borrowed funds had been advanced by the assessee to the concerned parties. Under the circumstances, the Tribunal was wholly justified in upholding the deletion of disallowance of interest expenses of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, inter alia , disallowed a claim of deduction of ₹ 5,30,76,095/- under section 10A of the Act as well as interest expenses of ₹ 15,21,790/-. The assessee carried the matter in appeal before the Commissioner (Appeals) who deleted the disallowance. The revenue went in appeal before the Tribunal who confirmed the order passed by the Commissioner (Appeals). 4. Insofar as the proposed question [A] which relates to allowing claim for deduction under section 10A of the Act is concerned, the assessee had claimed deduction of ₹ 5,82,65,233/- under section 10A of the Act against the sale invoices as under: (i) Sales against EPCG Rs.26.65 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y having been granted by the Assessing Officer. 6. Before the Commissioner (Appeals), the assessee submitted additional evidence, in response to which, he called for a remand report from the Assessing Officer. After considering the additional evidence, the Commissioner (Appeals) allowed the claim under section 10A of the Act to the extent of ₹ 5,30,76,095/-. The Tribunal, in the impugned order, has concurred with the findings recorded by the Commissioner (Appeals). 7. Mrs. Mauna Bhatt, learned senior standing counsel for the appellant, assailed the impugned order on the reasoning adopted by the Assessing Officer in the assessment order. It was submitted that during the course of assessment proceedings, the assessee had not produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished the working to the Commissioner (Appeals) as per which, on the amount of ₹ 30,05,70,495/-, if the claim amount was ₹ 5,82,65,233/-, then on ₹ 2,67,68,997/-, the proportionate disallowance came to ₹ 51,89,138/-. The Commissioner (Appeals), accordingly, restricted the claim under section 10A of the Act to ₹ 5,30,76,095/- and not ₹ 5,82,65,233/- as claimed by the assessee and allowed the appeal to that extent. The Tribunal, after appreciating the material on record, has concurred with the findings of fact recorded by the Commissioner (Appeals). 9. Thus, the conclusion arrived at by the Tribunal regarding the claim of the assessee under section 10A of the Act is based upon concurrent findings of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on such advances. The Assessing Officer did not accept the explanation of the assessee and disallowed the interest expenses of ₹ 15,21,719/- being 12% of ₹ 1,26,80,993/- advanced to the said parties. 11. The assessee carried the matter in appeal before the Commissioner (Appeals) who deleted the disallowance made by the Assessing Officer. Revenue failed in its appeal before the Tribunal. 12. Mrs. Mauna Bhatt, learned senior standing counsel submitted that the order passed by the Tribunal is erroneous because the assessee company had paid substantial interest to banking and financial institutions and others and if such surplus fund was available with the assessee company, there was no need for it to retain bulk bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner (Appeals) by the assessee. A perusal thereof clearly reveals that the assessee had obtained secured loans of ₹ 2,20,80,792/-, whereas it had reserve surplus of ₹ 9,63,57,283/-, share capital of ₹ 10,30,45,000/- and share application money of ₹ 2,17,75,000/-. Thus, the assessee had considerable surplus funds in proportion to the secured loans. Under the circumstances, since the assessee had advanced interest-free loans out of its surplus funds, the question of disallowing the expenditure in respect of interest incurred on the borrowed funds did not arise, inasmuch as, no part of the borrowed funds had been advanced by the assessee to the concerned parties. Under the circumstances, the Tribunal was who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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