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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘SMC’
Before: SHRI RAJPAL YADAV
आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD – BENCH ‘SMC’
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 1784/Ahd/2017 �नधा�रण वष�/Assessment Year: 2012-2013 Solace Capital Services P.Ltd. ITO, Ward-4(1)(2) O/702, Chandabala Vs Ahmedabad. Opp: Suvidha Shopping Centre Paldi, Ahmedabad 380 007. PAN : AAOCS 7840 P अपीलाथ�/ (Appellant) �� यथ�/ (Respondent) Assessee by : Shri M.S.Chhajed, AR Revenue by : Shri B.L.Meena, Sr.DR
सुनवाई क� तार�ख/Date of Hearing : 02/05/2019 घोषणा क� तार�ख /Date of Pronouncement : 02/05/2019 O R D E R Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-8, Ahmedabad dated 16.6.2017 passed for the Asstt.Year 2012- 13.
Assessee has taken four grounds of appeal, out of them it did not press ground no.3. Ground No.1 and 4 are general grounds, which do not call for recording of any finding. Hence, all these grounds are rejected. Only ground which has been pressed by the assessee is ground no.2, wherein it has pleaded that the ld.CIT(A) has erred in confirming addition of Rs.3,30,500/-.
With the assistance of the ld.representatives, I have gone through the record carefully. The ld.AO has observed that assessee has not
ITA No.1784/Ahd/2017 - 2 -
charged interest on advance of Rs.1,44,50,000/- given to Solace Stock P.Ltd. However, it has debited interest expenses of Rs.7,89,041/-, hence by taking rate of interest at 6% on the advance given to the sister concern, he calculated notional interest at Rs.8,67,000/- which is more than interest expenditure claimed by the assessee. Accordingly, the AO did not allow interest expenditure claimed by the assessee. The assessee thereafter moved an application under section 154 which was allowed by the AO and disallowance of interest at Rs.3,30,500/- was re-worked out.
I find that the assessee has interest free fund of Rs.3,22,11,819/- out of which it could be construed that the assessee must have given advance without charging interest. Since interest free funds are more than the interest free advance given by the assessee, therefore, there should not be any interest expenditure require to be disallowed from the claim of the assessee. For this proposition, I am fortified by the decision of Hon’ble Bombay High Court in the case of Cit Vs. Reliance Utilities and Powers Ltd., 288 ITR 1 (Bom), I allow the appeal of the assessee and delete disallowance.
In the result, appeal of the assessee is partly allowed. Pronounced in the Open Court on 2nd May, 2019.
Sd/- (RAJPAL YADAV) JUDICIAL MEMBER
Ahmedabad; Dated, 02/05/2019