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TMI Blog2018 (10) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... in disallowing the deduction of Rs. 7,05,311/- u/s 80IB in respect of purported export incentives even though assessee was supporting manufacturer. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in passing the impugned order and disallowing the claim u/s 801B in respect of purported export incentives is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case. Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making disallowance of Rs. 65,250/- on account of pro-rate interest on loan u/s 36(i)(iii) of the Income Tax Act., 1961. 4. That having regard to the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that as relates to Ground No. 1 & 2, the same is decided against the assessee in assessee's own case for Assessment Year 2007-08 being ITA Nos. 5619, 2529/Del/2011, ITA No. 1981/Del/2012, ITA No. 3165/Del/2011 vide order dated 14th September, 2018. As regards, Ground No. 3, the Ld. AR submitted that the assessee, during the assessment submitted the details regarding advances for furniture and fixture, advance petrified and loans and advances to sister concerns. Thus, the Ld. AR submitted that all these amounts were interest free advances and, therefore, the Assessing Officer was incorrect in making disallowance of Rs. 65,250/- on account of pro rata interest on loan u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest has to be disallowed. Now the said judgment of Hon'ble P & H High Court in CIT vs. Abhishek (supra) has been overruled by the Hon'ble Supreme Court in the case of CIT vs. Munjal Sales Corporation, wherein the Hon'ble Supreme Court held that if assessee has huge interest free funds including the profit earned by the assessee during the year which is sufficient to cover the advancement of loan, then no interest should be disallowed. The assessee has demonstrated that the huge amount of money was lying in the capitalof the partners and the profit earned during the relevant assessment year itself was approximately Rs. 1.19 crores. Therefore, such an availability of funds interest free is sufficient to cover up a small interes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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