TMI Blog2016 (6) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... I 77 - BOMBAY HIGH COUR ] after granting a reasonable opportunity of being heard to the assessee. It is the settled law that the AO is under obligation to reject the claim of the assessee by giving speaking order on this issue before he resort to thrust on the assessee the provisions of rule 8D r w section 14A of the Act. Accordingly, issue no.1 is remanded and relevant conclusions of the revenue authorities are set aside. Disallowance u/s 36(1)(iii) of the Act in respect of the interest claim of the assessee - It is a fact that neither the AO nor the CIT (A) have really gone into the issue of existence of excess funds and have given categorical findings about this fact. Therefore, in our considered opinion, this issue should also be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the decision in CIT vs HDFC Bank Ltd. 366 ITR 505 (Bom.) and CIT vs. Reliance Utilities Power Ltd. [2009] 313 ITR 340 (Bom). Assessee also filed paper book running into 6 pages containing balance sheet as on 31/03/2010. On the other hand, the ld. DR, defended the conclusion arrived at in the impugned order by adding that the impugned years may also be sent to the file of the ld. Assessing Officer so that the same can be examined in the light of the aforesaid decisions. 2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is an manufacturer and exporter of cut and polished diamonds. For the Assessment year , 2009-10, the assessee received a sum of Rs.3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken for other purposes. 2.1. in disallowance of interest assumed to be extended on investment in property at Bharat Diamond Bourse and other similar advances given which were business assets. 2.2. in not appreciating that no funds had been specifically borrowed for the purposes of making this investment and that hence noting were disallowable on this account. 2.3. in not appreciating that the appellant had adequate noninterest bearing funds available with it and that hence no disallowance of interest was called for. 3.1. in disallowing interest paid to the extent that sums of money were advanced to a partnership firm where the appellant was a partner on an interest free basis. 3.2. in not appreciating that the appellant had busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of the assessee ie Rs. 55,530/- is the expenditure incurred for earning of the exempt income, is unsustainable in law and relied on the jurisdictional High Court judgment in the case of Godrej Boyce Mfg. Ltd (supra). In this regard, Ld Counsel prayed for setting aside the issue for reexamination and applying of the jurisdictional High Court judgment on this issue. 3.2. On the other hand, Ld DR has relied on the orders of the Revenue Authorities and mentioned that he has no objection if the issue remanded to the files to the files of the AO for fresh examination of the issue. 3.3. We have heard both the parties and perused the orders of the Revenue Authorities as well as the material placed before us. We find merit in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of excess interest-free funds. Further, Ld Counsel fairly mentioned that the facts about the issue of existence of excess funds were not examined by the lower authorities. Therefore, for this purpose, this issue may also be set aside for examining the same afresh in the light of the binding judgment of the Hon ble High Court in the case of Reliance Utilities Power Ltd (supra). 4.1. On the other hand, Ld DR relied on the orders of the Revenue Authorities and he has no objection if the matter is remanded back to the files of the AO for fresh examination of the issue. 5. We have heard both the parties and perused the orders of the Revenue Authorities as well as the material placed before us. On hearing both the parties, we find meri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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