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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 31.03.2017 of the Commissioner of Income Tax (Appeals)-1, Chandigarh [hereinafter referred to as CIT(A)].
The assessee in this appeal has taken following grounds of appeal:- 1. That the Ld. CIT(A) has erred in partly sustaining the addition on account of notional interest on borrowed capital used for capital work
ITA No. 970-Chd-2017- M/s Torque Pharmaceuticals (P) Ltd., Chandigarh 2
in progress u/s 36(1)(iii) of the Income Tax Act, 1961, without properly appreciating the facts, supporting evidence and submissions placed on record. The claim be allowed and the addition be deleted.
The appellant craves leave to add, amend and delete any of the ground of appeal before the same is taken for final hearing.
The sole grievance raised by the assessee in this appeal is relating 3.
to the part sustenance of the addition by the CIT(A) out of the total
addition made by the Assessing Officer u/s 36(1)(iii) of the Income Tax
Act, 1961 (in short 'the Act').’ The Assessing Officer made the
impugned addition of Rs. 91,01,423/- on the ground that the assessee
had used borrowed funds for the set up of a new unit. In the appeal
before the CIT(A), the assessee pleaded that the assessee was possessed
of sufficient own funds to meet the capital work in progress. That no
borrowed funds were used. That some of the funds were used out of the
current account which were deposited out of the sale proceeds of the
assessee and not out of the borrowed funds. That the Ld. CIT(A) partly
accepted the contention of the assessee, however, observed that the
assessee had also used the cash credit limit for capital investment. He,
accordingly directed the Assessing Officer to recalculate the own funds /
those invested from the current account out of the total investments
made and work out the proportionate disallowance accordingly.
ITA No. 970-Chd-2017- M/s Torque Pharmaceuticals (P) Ltd., Chandigarh 3
Being aggrieved by the above order of the CIT(A), the assessee
has come in appeal before us.
The Ld. Counsel for the assessee at the outset, has submitted that
the Ld. CIT(A) mistakenly observed that the cash credit account was
used of investment. That no amount was used from the cash credit limit
for the capital work in progress. The Ld. Counsel, therefore, has
submitted that the matter be remanded to the Assessing Officer for
verification of the actual facts on this aspect.
The Ld. DR, on the other hand, has relied upon the findings of the
CIT(A).
We have considered the rival contentions. Since the assessee is
disputing the fact that no borrowed funds were used for making the
capital investment and that observation of the lower authorities that the
cash credit limit was used for capital investment was wrong and that
requires factual verification at the hands of the Assessing Officer,
hence, we restore this matter on this limited aspect to the file of the
Assessing Officer to verify and examine the above contention of the
assessee and decide this limited issue accordingly as per the provisions
of the law.
ITA No. 970-Chd-2017- M/s Torque Pharmaceuticals (P) Ltd., Chandigarh 4
In the result, the appeal of the assessee is treated as allowed for
statistical purposes.
Order pronounced in the Open Court on 21.10.2019.
Sd/- Sd/- (संजय गग� / SANJAY GARG) (एन. के. सैनी / N.K. SAINI) उपा�य� /Vice President �या�यकसद�य/ Judicial Member Dated : 21.10.2019 “आर.के.”
आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त/ CIT 4. आयकरआयु�त (अपील)/ The CIT(A) 5. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File
आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar