TMI Blog2019 (4) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... ook us through net cash flow from operations available on page no.20 of the annual report which suggest that the assessee has net cash flow. Thus, considering interest free funds available with the assessee in the shape of share capital, reserves and surplus, as well as net revenue from operations, we are of the view that alleged investment in WIP could be assumed as carried from these surplus fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 3. Brief facts of the case are that the assessee-company at the relevant time was engaged in manufacturing of very fine produce (denier) in POY, FDY, DTY and trading of fabrics. It has filed its return of income electronically 22.9.2012 declaring total income at Rs.NIL after setting off brought forward unabsorbed depreciation. On scrutiny of the accounts, the ld.AO noticed that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of 9.75% as against rate estimated by the AO at 12%. As observed earlier, the ld.CIT(A) has partly accepted this contention and calculated the notional interest representing the alleged WIP at 9.75%. This has reduced quantum of interest disallowed by the AO vis- -vis confirmed by the ld.CIT(A). The ld.DR on the other hand relied upon the order of the AO. 5. With the assistance of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lculated for capitalization. In order to fortify ourselves, we would like to refer to the decision of Hon ble Bombay High Court in the case of CIT Vs. Reliance Utilities Power Ltd., 313 ITR 340 (Bom). In view of the above, this ground of appeal is allowed. 6. In the result, the appeal of the assessee is allowed. Pronounced in the Open Court on 13th August, 2018. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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