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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R
PER KUL BHARAT, J.M: This appeal filed by the revenue is directed against order of the CIT(A)-1, Indore dated 15.1.2018 pertaining to
[ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore] the assessment year 2015-16. The revenue has raised following grounds of appeal:
1. Whether in the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting addition of Rs.20,62,31,801/- made by the A.O. on account of disallowance of proportionate interest even when interest free funds transferred to M.P. Power Generating Co. Ltd. Jabalpur, whereas company is paying heavy interest on loans.
The appellant craves leave to add to or deduct from or otherwise amend the above grounds of appeal
2. The only effective ground in the revenue’s appeal is against deletion of addition of Rs.20,62,31,801/- made by the A.O. on account of disallowance of proportionate interest in respect of interest free funds given to M.P.
The facts in brief are that case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was framed vide order dated 30.11.2017. The assessing officer while framing the assessment made
[ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore] addition on account of disallowance of interest of Rs.20,62,31,801/-.
Aggrieved by this, the assessee filed an appeal before the Ld. CIT(A), who after considering the submissions allowed the appeal of the assessee and deleted the addition.
Now the revenue is in appeal before this Tribunal. At the outset, Ld. Counsel for the assessee submitted that issue is squarely covered in favour of the assessee by the decision of the Tribunal. He contended that Ld. CIT(A) has followed the decision of this Tribunal. He submitted that the A.O. was not justified in making the addition.
On the contrary, Ld. D.R. supported the order of the A.O.
We have heard the rival submissions, perused the materials available on record and gone through the orders
[ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore] of the authorities below. We find that the A.O. made addition by observing as under:
[ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore] [ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore] [ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore]
However, the Ld. CIT(A) deleted this addition by observing as under:
[ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore]
The Ld. Counsel for the assessee has also drawn our attention to the decision of this Tribunal in pertaining to the assessment year 2012-13. The Tribunal in para-7 of the order has decided the issue as under:
7. We have heard both the sides and carefully perused the material available on record of the Tribunal, inter alia, impugned assessment order and the order of the learned CIT(A) along with paper book filed by the assessee. We find that the Commissioner of Income Tax (Appeals) while deciding the appeal has followed the case of the assessee itself in & ITA No.460/Ind/2010 for the assessment year 2007-08. The Commissioner of Income Tax (Appeals) has categorically held that the factual matrix for the year thus remains identical to that prevailing in the A.Y. 2007-08 and hence the findings of ITAT reproduced above are valid for the year under consideration also. He further observed that there is no nexus between the interest bearing funds and the interest free investment and hence it cannot be held that the interest expenditure related to non business purposes. We, therefore, find no flaw in the findings of the Commissioner of Income Tax (Appeals) and accordingly uphold the same.
It is further pointed out that this Tribunal in ITA No.144/Ind/2017 pertaining to the assessment year 2013-14 has followed the earlier order pertaining to the assessment year 2007-08 by observing as under: 8
[ITA No.285/Ind/2018] [M/s. Madhya Pradesh Financial Corporation, Indore]
“13. This finding on fact is not controverted by the Revenue while placing any material on record we, therefore, following the decision in the assessment year 2007-08 in assessee’s own case direct the A.O. to delete the addition. We do not see any infirmity in the order of the Ld. CIT(A), same is hereby confirmed. Ground raised by the revenue are dismissed.”
10. Since the issue is squarely covered in favour of the assessee, the revenue has not brought to our notice any contrary binding precedent. We therefore, taking a consistent view, affirm the finding of the Ld. CIT(A) and dismiss the ground raised by the revenue.
In the result, the appeal filed by the revenue is dismissed.
Order was pronounced in the open court on 14 .05.2019.