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TMI Blog2020 (12) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... iven for purchase of immovable property under section 36(1)(iii) and (ii) in deleting disallowance of Rs. 2,88,48,738/-. 3. It is to be noted that in the grounds of appeal Revenue has pleaded that the ld. CIT(A) has erred in deleting the addition of Rs. 1,19,90,822/- which was added by the AO by making disallowance under section 36(1)(iii) of the Act. It appears that this figure has wrongly been mentioned by the Revenue. A perusal of the order of the CIT(A), in para 4.2 reveals that the assessee has subsequently filed a rectification application before the AO under section 154 of the Act, and the order for rectification was passed on 17.2.2017. The AO worked out the disallowance after rectification at Rs. 51,84,596/-. Thus, the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .28% of advance given for the Asstt. Year 2011-12 to 2014-15 and thus made a cumulative addition of Rs. 1,19,90,822/- to the total income of the assessee. However, as stated in the foregoing paragraph of this order, after a rectification application the figure of disallowance was restricted to Rs. 51,84,596/-. Aggrieved by the disallowance made by the AO, the assessee went in appeal before the ld. first appellate authority, who by following various judgments of jurisdictional High Court, and also considering the fact that similar disallowance was deleted in assessee's own case for the Asstt. Year 2011-12, 2012-13 and 2013-14, deleted the disallowance of Rs. 51,84,596/- for the year under consideration. Aggrieved by the action of the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issue. We do not find any dissimilarity of facts of this year with that of earlier years. As noted in the assessment order itself that the assessee has sufficient interest free and own funds so as to make investment/advances. In number of authoritative judgments it is held that when there are substantial interest free and own funds, presumption would be that the investment and/or advances were made out of such funds. We do not find any infirmity in the finding of the ld. CIT(A) on this issue. Accordingly following the orders of the Tribunal in the case of assessee for the earlier years, cited (supra), we uphold the action of the ld. CIT(A) and dismiss this ground of appeal of the Revenue. 7. Now we deal with second issue of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,96,88,365/- and accordingly there was positive net interest income earned came to Rs. 2,20,10,315/-, and therefore, interest expenditure could not be considered for disallowances under section 14A. After considering the submissions of the assessee, and ratio laid down Hon'ble Gujarat High Court in the case of CIT Vs. Suzlon Energy Ltd. as also the decision of ITAT in the assessee's own case for the Asstt. Year 2011-12 to 2013-14 on identical issues, allowed the claim of the assessee, and deleted the impugned disallowance. Now, the Revenue is challenging the action of the ld. CIT(A) in deleting disallowance made under section 14A. 9. Before us, both the parties supported orders of respective authorities. The ld. counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication of Rule 8D(2), disallowance of expenditure to be considered should be net of interest i.e. interest paid minus interest received. In the present case, the assessee has earned higher interest income than the interest paid on the borrowed funds. We find that fact the present case is similar to the issue in the case of Nirma Credit & Capital (supra), and therefore, in our view this case law supports the case of the assessee. Moreover, ITAT in the assessee's own case for earlier years also allowed similar claim of the assessee. The facts in the present year is also similar to the facts of earlier years, and therefore, following the consistency with the earlier orders, we allow the claim of the assessee, and dismiss the ground of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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