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TMI Blog2021 (7) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... ming the same. The orders passed are bad in km and is liable to be quashed. 2.1 The learned assessing officer had erred in holding that interest of Rs. 2,42,33,822/- debited to Profit and loss account is not allowable u/s 36(1)(iii) of the Act on the ground that the appellant has given interest free advances to sister concerns and others without establishing the commercial expediency of the same and the learned CIT(A) has erred in partially confirming the Same. On the facts and circumstances of the case and the law applicable the conclusions drawn king totally erroneous are to be disregarded. 2.2 The appellant had rightly claimed the interest as business expenditure as all the borrowed funds were utilized for the purpose of business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s both on facts and law are to be disregarded. 5. The appellant denies the liability to pay Interest U/s. 234B and 2341) of the I.T. Act, 1961. The interest having been levied erroneously is to be deleted. 6. In view of the above and on other grounds to be adduced at the time of hearing, it is requested that impugned order passed be quashed or at least the disallowance u/s 36(1)(iii) and u/s 57 of the Act be deleted and interest levied be also deleted." Brief facts of the case are as under: 2. Assessee is a partnership firm and filed its return of income for year under consideration on 29/09/2012 declaring loss of Rs. 15,71,375/-. The Ld.AO observed that loss comprised of sum of Rs. 2,14,22,724/-being loss from business, Rs. 71,98,816 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Ld.CIT(A). The Ld.CIT(A) merely upheld the action of the Ld.AO by observing as under: "4.2.4 The AO has alternatively ordered that the interest claimed should be capitalized to the cost of land of Rs. 10.87 crores. The AO has also recast the appellant's P&L account in this regard as shown in para 11 of the assessment order. This alternative proposition of the AO is endorsed as the appellant has shown ongoing projects (WIP Rs. 1,43,29,743/- and Investments in Projects Rs. 1,12,83,881/- in the balance sheet) and interest paid on funds deployed for construction and development expenses would have to be capitalised to the cost of the projects. The appellant had itself submitted that the work-in-progress includes expenses incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arately. 4.3 Ground No. 6 pertains to the disallowance of depreciation claimed on electrical installations and furniture and fixtures in the let-out property 'Karle Premium'. The AG had disallowed the depreciation on these items on the ground that they constituted an inalienable part of the building let out, on which 30% deduction from rental income was allowed towards repairs and maintenance. The Appendix to the Hire Agreement dated between the appellant and the tenant M/s Reuters India Pvt. Ltd. shows the following items." 4. Aggrieved by the order of the Ld.CIT(A) assessee is in appeal before us now. 5. At the outset, Ld.AR submitted that, Ground No. 1, 4, 6 are general in nature and therefore do not require adjudication. Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to remand to the Ld.AO for verifying cash flow statement for relevant period. Assessee is directed to furnish the cash flow statement that would disclose the funds available as on the date of advance to the sister concern. The Ld.AO shall take a pragmatic approach in accordance with law considering the business exigency in the hands of assessee. Accordingly this ground raised by assessee stands allowed for statistical purposes. 6. Ground No. 5 is in respect of depreciation claimed on the equipments. 6.1 The Ld.AO did not allow sum of Rs. 5,19,496/- claimed as depreciation under section 57 of the Act, against electrical installations and furniture's and fixtures on the ground that deduction for electrical installation and furniture fixtur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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