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TMI Blog2018 (12) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest paid in excess of interest income was claimed as deduction. The assessee explained that it re-started its cold storage on 16-03-2010 and for that purpose it borrowed certain funds on which such interest was paid. The AO disallowed the deduction of interest amounting to Rs. 3,17,318/- on the premise that the amount of loan was utilised for the purposes of 'creating of an asset' and consequently interest on such loan was not deductible . The ld. CIT(A) overturned the assessment order on this point, against which the Revenue has come up in appeal before the Tribunal. 4. Having heard both the sides and gone through the relevant material on record, it is noticed that the assessee's cold storage was destroyed by fire and it had to reconstruct/ renovate the same. For that purpose, it arranged certain loans on which the impugned interest was paid. The AO has disallowed the interest by treating it as relatable to creation of capital asset, which in our considered opinion, is not a correct position. Proviso to section 36(1)(iii) of the Income-tax Act, 1961 (hereinafter also called 'the Act') provides that 'any amount of interest paid in respect of capital borrowed for acquisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another order of the Chennai Bench of the Tribunal in Chemfab Alkalis Ltd. (IT No.563/Mds/2012) dated 24-08-2012. The Revenue is aggrieved by the deletion of addition. 7. Having heard both the sides and perused the relevant material on record, it is observed that the assessee received insurance claim of Rs. 1.35 crore on account of land and incurred actual expenditure on renovation/re-construction of Rs. 3,55,56,948/-. The Mumbai Bench of the Tribunal in J.R. Enterprises (supra) has held that the provisions of section 45(1A) of the Act are inapplicable because of the receipt of insurance claim of Rs. 1.57 crore against the actual expenditure incurred of Rs. 3.82 crore. The Chennai Bench of the Tribunal in Chemfab Alkalis Ltd. (supra) also considered a similar situation in which the amount of insurance claim was less than the amount of actual expenditure incurred on reconstruction/ renovation and it was held that no short term capital gain u/s. 45(1A) of the Act can be charged under such circumstances. No contrary decision has been brought to our notice by the ld. DR. Respectfully following the precedent, we uphold the impugned order on this score. 8. In the result, the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... participation of the assessee. Under these circumstances, a question arises as to whether service of notice u/s. 143(2) on the Manager of the assessee firm would invalidate the assessment proceedings? In our considered opinion, the answer to this question needs to be given in negative alone. 13. Section 292BB of the Act, which is relevant for our purpose reads as under : "Notice deemed to be valid in certain circumstances.- Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a ) not served upon him; or (b ) not served upon him in time; or (c ) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.". 14. This section was inserted by the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alwant Singh (Civil Appeal Nos. 4360-61 of 2015) to contend that the concession given by the Authorised Representative before the AO had no legal legs to stand on and the same cannot bind the assessee. Facts of the Himalayan Cooperative Group Housing Society (supra) are that the appellant-society in that case raised a demand on its members for payment towards allotment of residential quarters/apartments on 28-05-1998. The respondents failed to comply with the demand. The appellant-society, after following the due procedure, passed a resolution expelling the respondents from the membership of the society. The resolution required confirmation of the Registrar of Cooperative Societies, who approved the resolution but gave one more opportunity to the respondents to pay their outstanding dues. No such payment was made and the resolution got confirmed. As a result, the respondents ceased to be the members of the appellant-society. The order of the Registrar was challenged before the Writ Court. The Writ Court approved the order of the Registrar. However, on the request made by the respondents seeking issuance of direction to the appellant-society for consideration of their request to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before the higher court on the ground that such concession by the ld. AR was invalid. In view of the foregoing discussion, we are of the considered opinion that there is no merit in the grounds raised by the assessee in this regard, which are hereby dismissed. 18. Ground No. 4 of the assessee's appeal is for expunging certain remarks made by the ld. CIT(A) in his order. 19. Having heard both the sides and gone through the relevant material on record, we find that the ld. CIT(A), after dismissing the assessee's ground of non-service of notice u/s.143(2), also made certain remarks about the ld. ARs advising them not to raise frivolous grounds of appeal and verifying the facts doubly before filing Form No.35. In our considered opinion, such remarks were not called for. It is the duty of every appellate authority to consider the issue raised before it and decide the same rather than commenting on the conduct of the ld. AR, unless such a conduct is specifically under challenge before it. We, therefore, expunge the following lines from page 16 of the impugned order, which read as under : "ARs of the appellant firm are also advised to not raise frivolous grounds of the appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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