TMI Blog2014 (11) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... the investments - Decided in favour of assessee. - ITA No. 644/Del/2013 - - - Dated:- 14-11-2014 - SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER For the Assessee : Shri M.P. Rastogi, Advocate For the Revenue : Shri B.R.R. Kumar, Senior DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER: This appeal filed by the Revenue emanates from the order of the CIT (Appeals)-XXIII, New Delhi dated 30.11.2012 for the Assessment Year 2009-10. 2. The assessee is a proprietorship firm engaged in the business of manufacture and export of readymade garments. The return of income was filed on 30.09.2009 declaring income of Rs. 88,87,500/-. The Assessing Officer made an addition of Rs. 36,40,518/- for not all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which interest has been paid consists of facility with Syndicate Bank for negotiating/discounting Foreign Bills. The Assessing Officer's main grounds for disallowance is that the appellant has not proven the business exigency for advancing loans and advances to sister concerns. However, the appellant has argued that such a plea was never taken by it, rather it was submitted during the assessment proceedings that the loans and advances were made out of the interest free funds available with it. The appellant has placed particular reliance on the judgement of the ITAT, Delhi in the case of DCIT vs U.K. Paints (India) Ltd.(2010) 4 ITR (Trib.) 455 (Del). In that case, the Hon'ble ITAT held that the decision of the Punjab Haryana Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est is deleted. The appellant therefore, succeeds at ground of appeal No.1. Now, the revenue is in appeal by taking the following grounds of appeal:- 1. On the facts and on the circumstances of the case, the Ld CIT(A) has erred in deleting disallowance of interest of Rs. 36,40,518/- inspite of the facts that the assessee could not establish that advance was given for the purpose of the business even when it was paying interest on secured loan taken. 2. The appellant craves leave to add, alter or amend any of the grounds of appeal before or during the course of the hearing of the appeal. 3. While pleading on behalf of the revenue, ld. DR submitted that the assessee has deposited Rs. 1,03,15,895/- under the head Bank charges a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exempted u/s 10B of the Act. It was also submitted that these interest free loans have been made out of own capital fund and reliance was placed on various decisions which include, CIT vs. Reliance Utilities 313 ITR 340 (Bom.), Ahuja Platinum Properties P. Ltd. vs. JCIT ITA No. 4723/Mum/2007 dated 24.06.2011, Yamuna Peshwa vs. DCIT ITA No. 416/Jd./2009 dated 09.12.2011, ITO vs. Strides Arcolab Ltd. 153 TTJ 181 (ITAT-Mumbai) and M/s. Amod Stamping (P.) Ltd. vs. CIT (2014) 45 taxmann.com 427 (Gujarat). 5. We have heard both the sides on the issue. We have also considered the case laws relied upon by both the sides. The assessee was having interest free own funds of Rs. 15,45,96,046.94 at the end of the financial year 2008-09, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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