NAHAR INDUSTRIAL ENTERPRISES LTD,LUDHIANA vs. DCIT, CIRCLE-1,, LUDHIANA
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 04.07.2024 passed for assessment year 2010-11. 2. The solitary grievance of the assessee is that ld. CIT(A) has erred in upholding the addition of Rs.64,15,446/-. A.Y.2010-11 2
With the assistance of ld. Representative, we have gone through the record carefully. This disallowance has been made by the AO for the reason that assessee has mixed funds and it has used interest bearing funds for purchase of fixed assets as well as for capital work-in-progress. The ld. Counsel for the assessee has placed on record the details in tabulator form and submitted that assessee has Rs.695.56 Cr surplus funds which is the interest free funds. As against this, total investment for purchase of assets as well as expenditure incurred towards work-in-progress is only Rs.97.39 Cr. The ld. Counsel for the assessee has placed on record a series of judgements propounding therein that if assessee has more interest free funds, then user of interest bearing funds for non business purpose can be taken care from those surplus funds and no disallowance is to be made. In the present case, we find that assessee has sufficient interest free funds which can take care of purchase of fixed assets as well as incurrence of expenditure towards capital field. For fortifying our view, we put reliance upon the judgement of Hon'ble Bombay High Court in the case of CIT A.Y.2010-11 3
388 ITR 81 (P&H) and Bright Enterprises Vs CIT 381 ITR
107. 4. In view of the above, the disallowance made by the AO and upheld by the CIT(A) is deleted.
5. In result, the appeal of the assessee is allowed.
Order pronounced on 26.03.2025. (MANOJ KUMAR AGGARWAL)
VICE PRESIDENT
“Poonam”
आदेश क ितिलिप अ ेिषत/ Copy of the order forwarded to :
अपीलाथ/ The Appellant 2. यथ/ The Respondent 3. आयकर आयु/ CIT 4. िवभागीय ितिनिध, आयकर अपीलीय आिधकरण, चडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File
आदेशानुसार/ By order,
सहायक पंजीकार/