TMI Blog2022 (9) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee for statistical purpose. - ITA Nos. 1161 & 1162/CHD/2019 - - - Dated:- 22-8-2022 - SHRI N. K. SAINI , VICE PRESIDENT And SHRI SUDHANSHU SRIVASTAVA , JUDICIAL MEMBER Assessee by : Sh. Navdeep Sharma , Advocate Revenue by : Dr. Ranjit Kaur , Sr. DR ORDER Per SudhanshuSrivastava , Judicial Member : The Revenue and the assessee have filed the captioned cross appeals against two orders both dated 01.06.2019 passed by the Ld. Commissioner of Income Tax (Appeals) Ludhiana, (In short the 'Ld. CIT(A)') whereby the impugned orders, the Ld. CIT(A) has partly allowed the appeals preferred by the assessee against the assessment orders passed u/s. 143(3) of the Income Tax Act, 1961 [in short ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f capital and reserves. 3. That the worthy CIT(A)-3, Ludhiana erred in law and on facts in upholding the addition/disallowance of Rs. 41,96,383/- being disallowance of interest of CC account, for purchase of fixed assets. Directions be given to delete the said disallowance as the appellant has sufficient own funds in the shape of capital and reserves. ITA No. 1162/Chd/2019 2. That the worthy CIT(A)-3, Ludhiana erred in law and on facts in upholding the addition/disallowance of Rs. 35,16,374/- being disallowance of interest of CC account, for purchase of fixed assets. Directions be given to delete the said disallowance as the appellant has sufficient own funds in the shape of capital and reserves. 4. The Ld. AR s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that this action was not sustainable in law in view of the fact that the assessee had its own sufficient funds in the shape of capital, reserves and surplus as well internal accruals. The Ld. AR further submitted that in assessment year 2012-13, the assessee had already capitalized interest to the tune of Rs. 2.81 crores under the head 'fixed assets' and in assessment year 2013-14, Rs. 2.94 crores of interest had been capitalized. The Ld. AR further submitted that this issue was covered in favour of the assessee by the order of ITAT Chandigarh Bench in the case of Monte Carlo Fashions Ltd. Vs. ACIT in ITA No. 1341/Chd/2016 vide order dated 12.10.2017 for assessment year 2012-13. 5. Per contra, the Ld. CIT DR supported the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (286 ITR 1). 10. We have heard Ld. Representatives of both the parties and perused the material available on record. 11. It is also to be noted that the Finance Act 2003 has amended Section 36(1)(iii) by inserting a proviso to the existing provision w.e.f. 01.04.2004 relevant to assessment year 2004-05. The proviso inserted to the existing provision of section 36(1)(iii) is reproduced as under: Provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalized in the books of account or not); for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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