SRI RENGA FASHIONS,COIMBATORE vs. ITO, COIMBATORE

This appeal of the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals)-2, Coimbatore dated 30.03.2017 and pertains to the assessment year 2012-2013.

Shri. K. Raghu, Ld. Representative for the assessee submitted that the only issue arises for consideration is disallowance of �34,27,065/- towards interest u/s.36(1) (iii) of the Income Tax Act, 1961 (in short ‘’the Act’’). According to the ld. Representative the total available interest free fund with the assessee is �1,59,51,085/-. The investments made during the year is Rs.1,60,00,000/-. The assessee had also profit to the extent of �80,00,000/-. Therefore there cannot be any disallowance towards interest.

On the contrary, Shri Pavitran Kumar, the Ld. Departmental Representative submitted that the available funds needs to be verified after considering the Balance Sheet and other materials and therefore the matter may be remitted back to the file of the Assessing Officer.

We have considered the rival submissions on either side and perused the material available on record. This tribunal is of the considered opinion that interest free funds available with the assessee needs to be examined before making any disallowance u/s.36(1) (iii) of the Act. Therefore as rightly submitted by the ld. Departmental Representative, this issue need to be re- examined by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the entire issue raised by the assessee is remitted back to the file of the Assessing Officer to re-examine the issue afresh in the light of the material available on record and other material that may be filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee in 2012-2013 is allowed for statistical purpose.