Pr. Commissioner Of Income Tax - 7 v. Premier Finance & Trading Co Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J.INCOME TAX APPEAL NO. 402 OF 2017 Pr. Commissioner of Income Tax - 7 ..Appellant Versus Premier Finance & Trading Co Ltd ..Respondent ................... Mr. Suresh Kumar for the Appellant Mr. Suresh Kumar for the Appellant Mr. Jay Bhansali for the RespondentMr. Jay Bhansali for the Respondent ................... CORAM : AKIL KURESHI & M.S. SANKLECHA, JJ. DATE : MARCH 6, 2019. P.C.: 1.Revenue has filed this appeal to challenge thejudgment of the Income Tax Appellate Tribunal. Followingquestion was pressed at the time of hearing:- " Whether on the facts and circumstances of the case and in law, theTribunal was correct in dismissing the Revenue's appeal in respect ofthe addition of Rs. 7,74,76,467/- u/S. 36(1)(iii) on account of interestfree advances without appreciating that the addition was not madeon the notional basis on the loans advanced but has restricted theinterest expenses to the extent of interest foregone and thus, theTribunal has ignored the facts of the case to the extent of perversity?" 2.We notice that the additions made by the AssessingOfÏcer were deleted by CIT(A) and confirmed by the Tribunal by the impugned judgment. While dealing with theRevenue's Income Tax Appeal No. 436 of 2017, we hadconsidered a similar issue concerning this very assessee anddismissed Revenue's appeal on the ground making followingobservations:- "3.Second question relates to the addition of Rs.3.05 crores made by theAssessing Officer while disallowing expenditure under Section 37(1) of the Act. Inthis respect, the Tribunal while upholding the decision of CIT (Appeals) held thatwhile making advances to the sister concerns, the assessee was acting in thenormal course of business and that the interest expenditure was thereforeallowable as per Section 36(1)(iii) of the Act. It was recorded that the AssessingOfficer had not brought anything to prove that the expenditure incurred towardsinterest was not wholly and exclusively for carrying out the business of theassessee. The Tribunal therefore, confirmed the order of the CIT (Appeals). WhenCIT(Appeals) and the Tribunal have concurrently held that the expenditure wasincurred for the purpose of the business of the assessee, we find no reason tointerfere. No question of law therefore arises."Assessing Officer while disallowing expenditure under Section 37(1) of the Act. Inthis respect, the Tribunal while upholding the decision of CIT (Appeals) held thatwhile making advances to the sister concerns, the assessee was acting in thenormal course of business and that the interest expenditure was thereforeallowable as per Section 36(1)(iii) of the Act. It was recorded that the AssessingOfficer had not brought anything to prove that the expenditure incurred towardsinterest was not wholly and exclusively for carrying out the business of theassessee. The Tribunal therefore, confirmed the order of the CIT (Appeals). WhenCIT(Appeals) and the Tribunal have concurrently held that the expenditure wasincurred for the purpose of the business of the assessee, we find no reason tointerfere. No question of law therefore arises." 3.In the result, without recording separate reasons, thisappeal is also dismissed. [ M.S. SANKLECHA, J. ] [ AKIL KURESHI, J ]