TMI Blog2024 (3) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was filled before the passing of the order, where in the assessee had explained the increase in the expenditure . The situation continues to be the same even before the CIT (A). CIT (A) mentioned that the Manufacturing, administrative and selling and distribution expenditures along with ledger extracts. were produced before the revenue authority. The above said, categorical finding of the CIT (A) recorded in the order have gone unrebutted. Undoubtedly, there is no ground raised by the Revenue challenging the order of the learned CIT (A) on the ground of the no adherence to principles of natural justice mentioned in Rule 46A of I.T. Rules. In the absence of any ground-raising violation of principles of natural justice or accepting the evidence at the back of the assessee, the finding recorded by the CIT (A) that the assessee has produced bills/vouchers explaining the increase in expenditure before the AO and before CIT (A) is required to be accepted. Once the bills have been produced by the assessee before the Revenue authorities and the bills have been examined by the CIT (A) and thereafter only the disallowance made by the AO has been deleted. We do not find any reason to int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground of appeal No.4 in ITA 1061/Hyd/2018 and Ground of appeal No.2 in ITA 1062/Hyd/2018 read as under: ITA No.1061/Hyd/2018 Ground No:iv iv. The learned CIT (A) erred in reducing the rate of interest from 16% to 8% on the loans advanced by the assessee to the sister concerns. ITA No.1062/Hyd/2018 Ground No.ii ii. The learned CIT (A) erred in reducing the rate of interest from 16% to 8% on the loans advanced by the assessee to the sister concerns. 8. In this regard the learned DR submitted that the learned CIT (A) had granted relief to the assessee and our attention was drawn to para 10.1 to 10.3 of the order passed by the learned CIT (A). It was submitted by the learned DR that this is contrary to the case of the assessee s own case for the A.Ys 2008-09 and 2009-10 in ITA No.629/Hyd/2012 vide paras 26 27 which are to the following effect: 26. We find that the AO was silent on the interest free funds received by the assessee from its sister concerns. We are of the view that if the assessee has got surplus funds which do not carry interest and also as other borrowals like bank overdraft etc., as per various judicial decisions the presumption is that the interest free and own fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayer of the Revenue. On the contrary, the Revenue submitted that the interest rate of 8% is far less and is required to be increased to 16%. 11. We have considered the issue at length. In the present case, the assessee in the statement before the learned CIT (A) had submitted that the assessee is having interest-free funds of Rs. 91,84,04,263/- available with the assessee. Thereafter, the learned CIT (A) examined the funds availability statement of the assessee in Para 10.2 (Supra). The learned CIT (A) thereafter has considered the totality of the facts and circumstances of the case and reduced the notional interest from 16% to 8%. In our view, the law is fairly settled in favor of the assessee, that if the assessee has the availability of interest-free funds, then the notional interest cannot be charged and for the above purposes, we rely on the decision of the Hon'ble Supreme Court in the case of SA Builders Ltd vs. CIT (2007) 158 Taxmann.74 (S.C), Punjab Stainless Steel Industry vs. CIT (2011) 196 Taxmann.com 404 and CIT vs. Rokman Cycle Industries (P) Ltd (2010) 187 Taxmann 242(P H) and in the case of Ranjani Enterprises 139taxmann.com 208. 11.1 While the proposition raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es made by the Assessing Officer and she drew our attention to para 9.2 and 9.3 of the order of the learned CIT (A) which are to the following effect: 9.2 Before me, the appellant submitted that the appellant has been accounting for both categories as one indivisible business and all expenses are vouched and verifiable. The appellant submitted that strict bifurcation may not be possible as both activities are interlinked. The appellant submitted that the entire disallowance is arbitrary, untenable and cannot be sustained. The appellant submitted that the payment for most of the expenses is made by crossed account payee cheques. The appellant submitted that some increase in expenses when Compared year on year could also be due to reclassification of the heads of expenditure. The appellant submitted that all the expenses are incurred in normal course of business. The increase in expenses year on year (viz., when compared to previous FY 2010-11) is beyond the control of the company. The appellant submitted the bills and vouchers for Manufacturing, administrative and selling and distribution expenditures along with ledger extracts. 9.3 The submissions of the appellant have been careful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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