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TMI Blog2021 (9) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... rievance that the CIT(A) has erred in law and on facts in affirming the Assessing Officer's action in invoking section 36(1)(iii) interest amount of Rs. 15,52,52,500/-; we note that the CIT(A) in his lower appellate discussion reads as under: "The disallowances u/s. 36(1)(iii) is extracted from the order of Assessing Officer supra. It is seen at pages 7 to 12 of the assessment order, the Assessing Officer has discussed in detail the disallowance made on account of u/s. 36(1)(iii). The undersigned concurs with the findings of the Assessing Officer and after considering the submissions of the appellant and the findings in the assessment order. Apart from the findings in the assessment order, it is not worthy that the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be disallowed out of interest expenditure as the same is not wholly and exclusively incurred for the purpose of business, the assessee submitted its explanation vide its letter dated 29/01/2015, which was extracted by the AO in his order at pages 2 & 3. The AO rejected the explanation of the by observing that the assessee has raised loans amounting to Rs. 200.00 crores and had debited financial charges of Rs. 14,94,47,101/- in the profit and loss account which leaves no doubt that the loans/advances to subsidiary company has been made out of 'borrowed' funds. He opined that the deduction of interest on borrowing can be allowed only if the assessee fulfils the provisions of section 36(1)(iii) of the Act. In view of the above o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... least 26% in the project companies during the entire duration of the facility. As per the share holding pattern of the group companies, the assessee company is having 15.11% of shares of Soma Toll Ways P. Ltd., to which Soma Jabalpur Rewa Tollway Ltd. is 100% subsidiary. 5.5 Considered the rival submissions and perused the material on record. We notice that the parent company is Soma Enterprises Ltd. and the holding company. It has following subsidiary companies: 1. M/s. Soma Infrastructure Pvt. Ltd., 2. M/s. Soma Tollways Pvt. Ltd. 3. M/s. Soma Highways Pvt. Ltd. 4. M/s. Chennai Elevated Tollway Ltd. 5. M/s. Adilabad Expressway Pvt. Ltd. 6. M/s. Soma Hyderabad City Centre Pvt. Ltd. 7. M/s. Soma Raipur City Centre Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the above, the object of these step down subsidiaries are completely different to assessee and only connecting point is the holding company. Therefore, the funds sanctioned by the bank were utilized in other group companies on the direction of the holding company. These funds were not utilized for any purpose of the object of the assessee company. Hence, the exclusive utilisation of these funds were not for the purpose of the assessee's business and the expenditure of interest is not for the purpose of assessee's business and clearly for the purpose of other group companies. 5.8 Coming to the question of business expediency in this transaction, any act carried out for the purpose of its own business or carried out for the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
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