TMI Blog2019 (4) TMI 1655X X X X Extracts X X X X X X X X Extracts X X X X ..... nce it is proved and accepted that the lending is part of business activities of the assessee company and once there is no finding recorded by the lower authorities that the borrowed funds were diverted for non-business purposes, there cannot be any disallowance of interest u/s 36(1)(iii) of the Act on a proportionate basis. Accordingly, the ground no. 1 raised by the assessee is allowed. Disallowance of set off of business loss and unabsorbed depreciation against the total income of the assessee - claim disallowed by the AO on the ground that the details furnished by the assessee in the return of income under the relevant column differed with the details submitted during the course of assessment proceedings and the assessee failed to reconcile the same - CIT-A however found certain discrepancies in the claim made by the assessee and accordingly directed the AO to verify the amount of losses brought forward / carried forward and compute the correct amount of set off available and grant the same to the assessee as per law - HELD THAT:- There is nothing wrong in the direction of the CIT-A in asking the AO to verify the claim of brought forward business and depreciation losses from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asst Year 2011-12. The assessee furnished the details of loans and advances before the ld AO and gave the break up of interest received in the sum of ₹ 12,96,57,884/- in the tabular form as under:- Sr. No Name of the Party Opening Balance Loans given during the year Loans repaid Closing balance Amount of interest received Rate of interest 1. M/s. Everest Anggan Pvt. Ltd., 54,05,000 54,05,000 --- 3,53,836 12% 2. Mega Management Services Pvt. Ltd., 38,37,23,310 1,61,34,25,577 123,14,94,142 76,56,54,745 12,77,86,271 14% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken from SICOM Limited, 80,00,00,000 11 .75% 2 Barclays Investment and Loan (India) Ltd. 22/07/2010 15,00,00,000 3 Bright Brothers Limited 25/03/2011 3,00,00,000 17.50% 4 India Infoline Investment Services Limited 23/06/2010 15,00,00,000 12.25% 5. St. Archana Mittal On various date 90,97,27,342/- 16% 13.81% Average rate of interest 3.3. The ld AO observed that in addition to the interest payment on loans of ₹ 12,95,71,373/-, the assessee company had also paid Brokerage and Commission of ₹ 6,50,000/-; Processing F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14% 3. V.K. Industries Ltd., 51,11,000 12% Total Amount 251,26,55,736 3.6. With regard to other expenses such as Brokerage and Commission and Professional Fees (Loan processing fees) , the assessee submitted that it had to pay brokerage and commission at a certain percentage of loan amount and thay are sanctioning to the assessee and are conditional payments, therefore the company had to incur for getting the said loans. Further the company had to approach the third party for arranging the funds and the third party charges to company on account of loan processing fees / professional charges. 3.7. The ld AO on perusal of the memorandum of association of the company observed that the main objects and incidental objects of the assessee company are as under:- (A) THE MAIN OBJECTS OF THE COMPABY TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION: 1. To receive, hold in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h borrowings were made or at the rate lower than the borrowings rate. The ld AO arrived at the differential rate of interest at 1.41% and applied the same on the total borrowings and arrived at the disallowance of interest u/s 36(1)(iii) of the Act on a proportionate basis in the following manner:- Sr. No. Name of the Lender Date Amount (Rs.) No. of days on Which interest calculated @1.41% Amount (Rs.) 1. Sicom Limited 08.04.2010 10.00 Cr. 358 13,82,959 2. Sicom Limited 31.03.2010 25.00 Cr. 213 20,57,055 3. Sicorn Limited 25.11.2010 10.00 Cr. 127 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SICOM Ltd. 10,00,00,000 13.50% SICOM Ltd. 35,00,00,000 13,00% Total amount taken from 80,00,00,000 13.50% 2 Barclays Investment and Loan [India) ltd. 15,00,00,000 11.75% 3 Bright Brother Limited 3,00,00,000 17.50% 4 India Infoline Investment Services Limited 15,00,00,000 12.25% 5.1. The ld CITA observed that assessee had also advanced monies to the following parties and the revised rate of interest charged after excluding interest charged to Mrs Archana Mittal are as under:- Sr.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127 38,27,39 4 Sicom Limited 08.11.2010 35.00 cr 144 15,18,904 5 Barclays Investment Loan (India) Ltd., 22.07.2010 15.00 cr 253 11,43,698 6. IIFL 23.06.2010 15.00 Cr. 282 12,74,794 7. Bright Brothers Limited 25.03.2011 03.00 Cr. 07 6328 6. Aggrieved, the assessee is in appeal before us. 7. We have heard the ld DR. At the outset, it is not in dispute that the assessee had mixed funds in its kitty i.e own funds as well as borrowed funds. It is not in dispute that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
