TMI Blog2020 (2) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... i), the Revenue could not have taken a different view for three years in question, particularly, without any conclusion that, in fact, general reserves, surpluses and other funds were not available. Reference may also be made to the decision of this Court in Commissioner of Income Tax v Tin Box Co. [ 2002 (11) TMI 75 - DELHI HIGH COURT] wherein it was held that the finding of the Tribunal that the Department had not been able to controvert or disprove the fact that the assessee had substantial capital and interest-free funds available with it, not only in the preceding years but also in the years under consideration, which far exceeded the interest-free advances to the sister concern, is not without any evidence or material and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to sister concerns and other associates without charging interest and that such interestfree advances were not made for business purposes. Consequently, the Assessing Officer has held that the assessee did not satisfy the condition laid down in Section 36 (1) (iii) of the Income Tax Act. 2. Briefly stated, the facts of the case are that the assessee is engaged in the business of real estate development. During the year under consideration, the assessee company was developing a residential project namely 'Gaur Saundaryam' at Greater Noida (West). The assessee had share holder fund of ₹ 16.70 Crore, share application money of ₹ 11.11 crore and 108.68 crore of advance received from customers. Since about 37% of the proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Andhra Bank aggregating to ₹ 158.50 crores, had been channeled by the assessee inter alia to Gaursons Realtech Pvt. Ltd. The Tribunal has found that, as a matter of fact, the assessee had paid the amount of ₹ 79.85 crores on behalf of Gaursons Realtech Pvt. Ltd. to JP Infrastructure Ltd in respect of an agreement whereunder Gaursons Realtech Pvt. Ltd. had agreed to purchase land ad measuring 300 acres from JP Infrastructure Ltd. At the same time, there was an underlying transaction between the assessee and Gaursons Realtech Pvt. Ltd. by way of a Memorandum of Understanding dated 30.03.2013, whereunder the assessee was to get land ad measuring 88,500 sq. mtrs. (which translates to about 22 acres). That apart, by investing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 36 (1) (iii) of the Act. 4. The other transaction that the assessee undertook was in respect of the loan of ₹ 52.36 crores advanced to M/s Gaursons India Ltd. M/s Gaursons India Ltd. is the holding company of the assessee. The submission of learned counsel for the Appellant is that since M/s Gaursons India Ltd. is neither a subsidiary, nor an associate company, the advancement of loan by the assessee to Gaursons India, to the tune of ₹ 52.36 crores, did not make business sense and therefore, it cannot be considered to be made for the purpose of business . On this aspect, we find that the assessee had consistently contended that it had excess interest free fund available with it to make investments and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpluses and other funds were not available. Reference may also be made to the decision of this Court in Commissioner of Income Tax v Tin Box Co. (2003) 260 ITR 637, wherein it was held that the finding of the Tribunal that the Department had not been able to controvert or disprove the fact that the assessee had substantial capital and interest-free funds available with it, not only in the preceding years but also in the years under consideration, which far exceeded the interest-free advances to the sister concern, is not without any evidence or material and therefore, disallowance of interest was deleted. Therefore, as already noted, in the present case, it is clear that there were sufficient interest free funds available with the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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