TMI Blog2018 (7) TMI 1721X X X X Extracts X X X X X X X X Extracts X X X X ..... ting that the total amount of interest debited to profit and loss account amounting to ₹ 1,47,51,794/- was pleaded to different the bankers/lenders. The impugned order does not commented anything adverse on this aspect. Thus the disallowance of proportionate interest cannot be sustained. - Decided in favour of assessee Depreciation claimed in respect of the asset comprised of land and building components integrally - Held that:- except the year under consideration, for all remaining years from purchase of the asset to its sale, depreciation was allowed on the total value of the asset without resorting to any bifurcations of the asset into the land component and building complaint, but is only for the year under consideration such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness interests of the assessee and, therefore, no proportionate disallowance of interest expense was called for. 3. That it the Ld. CIT(A) has added in law and on facts in disallowing the claim of depreciation for an amount of ₹ 50, 50, 000/-. 2. Briefly stated facts of the case are that the assessee is a company engaged in the business of Advertising, PR activities, Outdoor Media and trading of helicopters parts. For the assessment year 2010-11 they have filed their return of income on 26/09/2010 declaring an income of ₹ 1,76,85,000/-. During the assessment proceedings, learned Assessing Officer (Ld. AO) Firstly observed that the assessee earned dividend income of ₹ 1,96,092/- on the investment of ₹ 8,96,092 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee preferred an appeal before the Ld. CIT(A). Ld. CIT(A) by way of impugned order deleted the addition of ₹ 16,621/- added on account of the disallowance by invoking the provisions under section 14-A of the Act read with rule 8-D of the Income Tax Rules, 1962. 6. Ld. CIT(A), however, held that the borrowed funds and own funds of the assessee could have reasonably be deployed towards making investments in flats/plots etc. in the ratio of 5.30:10.71, the assessee deployed interest-bearing borrowed funds of ₹ 2,31,59,663/- for making investment in flats/plots and, therefore, Ld. CIT(A) directed the Ld. AO to compute the interest on it at the applicable interest rate payable to bank and restrict the disallowance of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee are twofold. Firstly, that the assessee had sufficient availability of interest-free funds to make the interest-free advances and, therefore, interest payments on borrowals could not have been proportionately disallowed. Secondly, it is argued that even otherwise, the interest-free advances/investments were made to protect the business interests of the assessee and, therefore, no proportionate disallowance of interest expense was called for. 10. It is brought to our notice that it was submitted before both the authorities below that as on 31/03/2010 the paid-up capital of the assessee stands at an amount of ₹ 82.45 lakhs and the results and surpluses including the share premium stood at an amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on all fours and in so far as the revenue does not disprove the contention of the assessee that they had interest free funds in their hands over and above the loans are advances given to the Directors as on such date, inasmuch as such interest-free funds are sufficient to advance such loans to the Directors, the presumption is that the loans would be out of the interest-free funds available with the assessee. 13. Further the impugned order reveals that the business expediency was also pleaded before the authorities below besides demonstrating that the total amount of interest debited to profit and loss account amounting to ₹ 1,47,51,794/- was pleaded to different the bankers/lenders. The impugned order does not commented anythi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only for the year under consideration such a view is taken by the Assessing Officer. Having regard to the facts and circumstances of the case, we are of the considered opinion that the rule of consistency demands that the consistent view had to be taken in similar matters of the same assessee over a period of time and to discriminate the issue for a single year is not permissible. We, therefore, while following the decision of the Hon ble Apex Court in the case of Radhasoami Satsang (supra) find it difficult to sustain the disallowance of depreciation and the consequential addition. We , therefore, direct the assessing officer to delete the disallowance and the consequential addition. Grounds No. 3 is allowed. 17. In the result appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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