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आदेश/Order
Per Sanjay Garg, Judicial Member:
The captioned appeals have been preferred by the Revenue against
the separate orders of the Commissioner of Income Tax (Appeals)-I,
Ludhiana [hereinafter referred to as ‘CIT(A)’] agitating the action of the
CIT(A) in deleting the additions made by the Assessing officer on account
of disallowance out of interest expenditure u/s 36(1)(iii) of the Income-tax
Act, 1961 (in short 'the Act').
We have heard the rival contentions. A perusal of the orders of the
CIT(A) revels that the Ld. CIT(A) has given a categorical finding that
assessee was possessed of sufficient own / interest free funds to cover the
capital work in progress and capital advances. He, therefore, relying upon
the decision of the Jurisdictional High Court in the case of ‘Bright
Enterprises Pvt Ltd Vs. CIT, Jalandhar’ 381 ITR 107 and also considering
the fact that the assessee had not borrowed any specific loans for the
aforesaid capital advances and capital work in progress, deleted the
additions so made by the Assessing officer.
The issue is now squarely covered by the various decisions of the
High Courts including that of the decision of the Hon'ble Jurisdictional
High Court in the case of ‘Bright Enterprises Pvt. Ltd Vs. CIT, Jalandhar’
(supra), ‘CIT Vs. Kapsons Associates’ (2016) 381 ITR 204 (P&H) and the
latest decision of the Coordinate Bench of the Tribunal (incidentally
consisted of both of us) in the case of ‘ACIT Vs. Janak Global Resources
Pvt Ltd’ ITA No. 470/Chd/2018 order dated 16.10.2018, wherein, the issue
ITA Nos. 406, 799 & 809-Chd-2014- M/s Majestic Auto Limited, Ludhiana 3
has been decided in favour of the assessee by also considering the decision of the Hon'ble Apex Court in the case of ‘Hero Cycles Vs. CIT’ 379 ITR 347 (SC) and also findings arrived in the case of Avon Cycles Ltd. Vs. CIT in ITA No.277 of 2013. The Hon'ble Courts have held that if the assessee is possessed of sufficient own interest free funds to meet the investments / interest free advances, then, under the circumstances, presumption will be that interest free advances / investments have been made by the assessee out of own funds / interest free funds. In view of this, there is no merit in the appeals of the Revenue and the same are accordingly dismissed. Order pronounced in the Open Court on 13.12.2018
Sd/- Sd/- ( बी , आर . आर . कुमार / B.R.R. KUMAR) (संजय गग� / SANJAY GARG ) लेखा सद�य/ Accountant Member �या�यक सद�य /Judicial Member
Dated : .2018 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar