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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM
These are appeals preferred by the Revenue against the orders of the Commissioner of Income-tax (Appeals), Kolkata-21(hereinafter referred to as the “Ld. CIT(A)”]even dated 22.11.2023 for A.Ys. 2011- 12 & 2012-13.
At the outset, we observe from the appeal folder that there are delays of 124 days and 129 days for A.Y. 2011-12 and 2012-13 respectively in filing the appeals by the department and in support of this a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approvals from the competent authorities, which took quite a long time and accordingly, the delay may be condoned being
As the facts and circumstances are similar in both the appeals of the Revenue, hence, they are clubbed and decided together, First we will take and will decide the issue accordingly.
04. The only issue raised by the Revenue in the various grounds of appeal is against the deletion of ₹4,17,85,850/- as made by the ld. AO by disallowing the interest expenses on unsecured loans.
The facts in brief are that a search action u/s 132(1) of the Act was carried out in the business premises of the assessee. The notice u/s 153A of the Act was issued on 17.06.2013, which was complied with by filing the return of income on 20.08.2011, disclosing loss of ₹1,45,027/-. Thereafter, notice u/s 143(2) and 143(1) of the Act along with questionnaire were issued. The assessee replied the same. The ld. AO observed that the assessee company claimed interest on secured loans amounting to ₹3,52,29,372/- and interest on unsecured loan of ₹46,24,495/-. The ld. AO noted that the loan was taken from the Forum Project Holding Pvt. ltd. a majority shareholder of the assessee company. The ld. AO further noted that the assessee advanced money / deposits to group companies M/s Forum Project Pvt. Ltd. amounting to ₹53.25 crores and Forum Project Holding Pvt. ltd. amounting to ₹24.00 crores, without charging any interest from these companies. Accordingly, show cause notice was issued on 11.02.2014, asking the assessee as to why the interest paid on unsecured loans may not be disallowed. The assessee replied the said
In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by observing and holding as under:-
“So, interest free refundable mobilization amount of Rs.32.25 crores was paid to enable the project manager for setting up critical infrastructure, capital and construction equipment and other initial setting of cost, and that the said amount was refundable and spread over stipulated period as agreed in the agreement, Performance deposit of Rs.21 crores, mentioned that the project manager is always ready and capable of services as per agreement but on account of delay commencernent of project it could not render any services and Interest free deposit of Rs.24 crores to Forum Holding Project Pvt. Ltd. was given pursuant to tripartite agreement between Assessee, Forum Projects Holdings and K28 Commercial dated 27.12.2007. The fact that the above-mentioned payments were made as per the tripartite agreement
In the result, both the appeals of the Revenue are dismissed.
Order pronounced in the open court on 21.11.2025.