DCIT 8(3)(1), MUMBAI V. URBAN INFRASTRUCTURE HOLDING P.LTD, MUMBAI

ITA 1979/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7845 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2015
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Keywords: Business expenditure; Earning of tax free income; Wholly owned subsidiary; Commercial expediency
• Section: 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 19 79 / MUM/20 1 5 ( ASSESSMENT YEAR : 2009 - 10 ) DCIT - 8(3)(1), MUMBAI 400 020 VS. URBAN INFRASTRUCTURE HOLDING PVT. LTD., 1 ST FLOOR, J AI CENTRE, 34 PD MELLO ROAD, OPP. RD GATE, MASJID 400 009 PAN/GIR NO. AAJCS2680L APPELLANT ) .. RESPONDENT ) REVENUE BY MS. POOJA SWAROOP ASSESSEE BY MR. MADHUR AGARWAL DATE OF HEARING 21 / 03 /201 7 DATE OF PRONOUNCEME N T 31 / 03 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 14, MUMBAI DATED 24/12/2014 FOR THE ASSESSMENT YEAR 2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT, WHE REIN FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE . (I)THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW, IN DELETING THE DISALLOWANCE OF RS.8,58,32,156/ - UNDER SECTION 14A R.W.S. RULE 8D, WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX AS CLE ARLY BROUGHT OUT BY THE ASSESSING OFFICER. (II) THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW, IN DELETING THE DISALLOWANCE OF RS.8,58,32,156/ - UNDER SECTION 14A R.W. RULE 8D, BY RELYING UPON HON'BLE ITAT'S DECISION IN THE CASE OF GARWARE WALL ROPES LTD, WHEREIN DEPA.RTMENTHAS NOT ACCEPTED THE DECISION AND FILED AN APPEAL BEFORE THE HON'BLE BOMBAY HIGH COURT WHICH IS ADMITTED. ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 2 (HI) THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.L,32,77,073/ - MADE U/S.36(I)(III) OF .T HE I.T. ACT, 1961 WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX AS CLEARLY BROUGHT OUT BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A HOL DIN G COMPANY MAINLY ENGAGED IN INVESTMENT ACTIVITIES AND ALSO PROMOTING SUBSIDIARY COMPANY FOR CARRYING OUT BUSINESS OF PROMOTION, DEVELOPMENT AND OPERATION OF INFRASTRUCTURE FACILITIES AND SERVICES I.E. SPECIAL ECONOMIC ZONE S. DURING THE YEAR UNDER CONSID ERATION, THE ASSESSEE HAD EARNED INCOME FROM PROFIT ON SALE OF C U RRENT INVESTMENTS, CONSULTANCY, CONTRACT REVENUE AND INTEREST INCOME . THE ASSESSING OFFICER VIDE HIS ORDER DATED 2 8.12.2011 DISALLOWED RS.3,69,80,822 UN DER SECTION 36(1)(III) OF THE ACT BEING EXPENDITURE IN RESPECT OF INVESTMENTS. T HE LEARNED ASSESSING OFFICER ALSO DISALLOWED THE EXPENDITURE OF RS.8 ,58,32,156/ - UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 READ WITH RULE 8 D. 4. BY THE IMPUGNED ORDER, CIT(A) DELETED THE DISALLOWANCE MADE BY AO INVOKING RULE 8D AFTER OBSERVING AS UNDER: - 3.3 I HAVE GONE THROUGH THE FACTS AND SUBMISSION. FIRST AND. FOREMOST ARGUMENT OF APPELLANT IS THAT HAVING NOT RECEIVED ARTY DIVIDEND ON THE SAME FOR WHICH THEY HAVE RELIED UPON THE DECISION GIVEN BY THE HON'BLE COURTS SUBSEQUENT TO CBDT'S CIRCULAR NO.5/2014 DATED 11/02/2014, IN THE CASE OF - CIT V. LAKHANI MARKETING, ITA NO. 970/2008 (P&H) (HQ, CIT V. SHIVAM MOTORS (P) LTD., ITA NO. 88/2014 (ALL.)(HC), CIT V. CORTECH ENERGY PVT. LTD., ITA NO. 239 OF 2014 (GUJ.) ( HC) AND CIT V. DELITE ENTERPRISES, IT A NO. 110/2009, AS REPRODUCED ABOVE IN APPELLANT'S SUBMISSION. THE SECOND ARGUMENT, TAKEN BY THE APPELLANT IS THE INVESTMENTS WERE MADE IN SUBSIDIARY COMPANY WHICH IS 100% SUBSIDIARY OF THE APPELLANT AND OUT OF ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 3 TOTAL I NVESTMENT OF 610.56 CRORES, INVESTMENT TO THE TUNE OF RS.598 CRORES WAS MADE IN THESE SUBSIDIARY COMPANY OF THE APPELLANT N AMED DRON AGIRI INFRASTRUCTURE PVT. LTD. AS PER APPELLANT, THE INVESTMENTS BEING TOTALLY FOR THE PURP OSE OF BUSINESS, THE RATIO OF DEC ISION IN THE CASE OF INTERGLOBE ENTERPRISES LTD. V. D CIT(DE L .)(TRIB.) HAS RELIED UPON THEM IS APPLICABLE. ALONG WITH THE DECISION GIVEN BY THE HO N 'BLE MUMBAI TRIBUNAL IN THE CASE OF GARWARE WALL ROPES LTD. HAS BEEN RELIED UPON BY THE APPELLANT. 3.4 I 'HAV E GONE THROUGH BOTH OF THESE CASES AND I AM BOUND BY THE DECISIONS GIVEN BY THE H ON'BLE I TAT, MUMBAI IN THE CASE OF GARWARE WALL ROPES LTD. WHEREIN ON IDENTICAL FACTS OF INVESTMENTS MADE WITH SUBSIDIARY COMPANY, IT WAS HELD THAT THE SAME BEING IN THE NATUR E OF BUSINESS INVESTMENT IS NOT AN INVESTMENT AND THUS PROVISIONS OF SECTION 14A OF THE ACT ARE NOT APPLICABLE. ALONG WITH THIS, THE PLEA TAKEN BY THE APPELLANT THAT NO DIVIDEND WAS EARNED ON THE SAME ALSO GO IN FAVOUR OF THE APPELLANT THAT SAME WAS NOT AN INVESTMENT BUT BUSINESS TRANSACTION. FOR THESE REASONS, I AM OF THE CONSIDERED VIEW THAT PROVISIONS OF SECTION 14A CANNOT BE ATTRACTED IN THE CASE AND HENCE DISALLOWANCE CALCULATED U/S.14A R.W.S. 8D FOR RS.8,58,32,156/ - BEING NOT SUSTAINABLE ARE DELETED HE REWITH. THE GROUND NO.1 IS ALLOWED . 5. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT DISALLOWANCE MADE U/S .14A R.W.R. 8D WAS DELETED BY CIT(A) AFTER RELYING ON THE DECISION OF CO - ORDINATE BENCH IN CASE OF GARWARE WALL ROPES LTD., WHEREIN IT WAS HELD THAT INVESTMENT MADE IN SUBSIDIARY COMPANIES ARE REQUIRED TO BE EXCLUDED WHILE COMPUTING DISALLOWANCE UNDER RULE 8D. THE CIT(A) ALSO FOUND THAT SINCE NO DIVIDEND INCOME WAS RECEIVED, NO DISALLOWANCE WAS WARRANTED, THE DETAILED FINDING SO RECORDED BY CIT(A) AT PARA 3.3 ARE AS PER MATERIAL ON RECORD, THEREFORE, DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. 6. LEARNED AR SHRI MADHUR AGARWAL ALSO PLACED ON RECORD THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CHEMINVEST LTD., 378 IT R 33 WHEREIN IT WAS HELD THAT NO DISALLOWANCE U/S.14A CAN BE MADE WHERE ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 4 THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. 7. WE HAD CAREFULLY GONE THROUGH THE DECISION OF THE DELHI HIGH COURT WHEREIN THE HONBLE HIGH COURT H ELD AS UNDER: - THE EXPRESSION DOES NOT FORM PART OF THE TOTAL INCOME IN SECTION 14A OF THE INCOME TAX ACT, 1961 ENVISAGES THAT THERE SHOULD BE AN ACTUAL RECEIPT OF INCOME, WHICH IS NOT INCLUDIBLE IN THE TOTAL INCOME, DURING THE RELEVANT PREVIOUS YEAR FOR THE PURPOSE OF DISALLOWING ANY EXPENDITURE INCURRED IN RELATION TO THE SAID INCOME. IN OTHER WORDS, SECTION 14A WILL NOT APPLY IF NO EXEMPT INCOME IS RECEIVED OR RECEIVABLE DURING THE RELEVANT PREVIOUS YEAR. HELD, THAT NO EXEMPTED INCOME WAS EARNED BY THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR AND SINCE THE GENUINENESS OF THE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT IN DOUBT, NO DISALLOWANCE COULD BE MADE U/S.14A. 8. FURTHERMORE, THE PROPOSITION THAT NO DISALLOWANCE CAN BE MADE U/S.14A IN CASE THER E IS NO EXEMPT INCOME IS ALSO SUPPORTED BY THE FOLLOWING JUDICIAL PRONOUNCEMENTS. 1. JOINT INVESTMENTS V. CIT (372 ITR 694 (DEL) 2. INDUS VALLEY INVESTMENTS V DCIT BEING ITA NO.3763/DEL/2013 FOR A.Y.2009 - 10 DATED 29/04/2015 3. M/S. DAGA GLOBAL CHEMICALS VS . ASST. CIT BEING ITA NO.5592/MUM/2012 DATED 01/01/2015. 4. M/S. SLYVEX CABLE CO. PVT. LTD., V DY. CIT BEING ITA NO.8581/MUM/2011 FOR A.Y.2008 - 09 DATED 24/02/2016. 9. IT IS NOT IN DISPUTE THAT ASSESSEE WAS NOT IN RECEIPT OF ANY EXEMPT INCOME DURING THE YE AR UNDER CONSIDERATION, ACCORDINGLY ON THIS PROPOSITION ALSO, NO DISALLOWANCE IS WARRANTED U/S.14A R.W.R. 8D. 10 . DISALLOWANCE MADE U/S.36(1)(III) WAS DELETED BY CIT(A) AFTER RECORDING THE FOLLOWING FINDINGS. 4.2 I HAVE CONSIDERED THE FACTS IN THE CASE. T HE AO HAS CLEARLY BROUGH T THIS FACT ON RECORD THAT THE ASSESSEE HAS ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 5 BORROWED INTEREST BEA RING FUNDS FOR SETTING UP A MULTI PRODUCT SPECIAL ECORTOMIC ZONE (SEZ) AT SAWANTWADI, DIST. SINDHUDURG IN THE STATE OF MAHARASHTRA FOR THE IDENTIFIED CERTAIN VILLAGES AND HAS ENGAGED THE SER VICES OF URBAN TRANSPORT INFRASTRUCTURE PVT. LTD. TO DO THE JOB OF INTERMEDIARY BETWEEN ASSESSEE, LAND OWNERS AND RELEVANT GOVERNMENT BODIES TO N EGOTIATE THE PURCHASE PRICE OF LAND, MAKE PAYMENTS AND COMPLETE THE FORMALITIES. FOR THE SAME, THE ASSESSEE PAI D RS.2.90 CRORES TO M/S. URBAN TRANSPORT INFRASTRUCTURE PVT. LTD. ALSO. HOWEVER, DUE TO CERTAIN UNAVOIDABLE CIRCUMSTANCES, THE INTERMEDIARY COMPANY UTIPL COULD NOT FULFILL REQUIREMENTS AND HENCE PAID BACK COMPENSATION OF RS.8. 70CROR ES TO THE APPELLANT COMPANY AGAINST THE DEPOSIT TAKEN AT RS.2.90 CRORES. THE ASSESSEE HAS CREDITED THE SAME AS REVENUE IN THEIR BOOKS OF ACCOUNTS, AND THE SAME HAS BEEN CLAIMED AGAINST INTEREST EXPENSES OF 12,39,80,822/ - . THE AO CONCLUDED THAT THE DIFFEREN CE BETWEEN INCOME GENERATED AND INTEREST PAID IS NOT ALLOWABLE AND HENCE DISALLOWED THE DIFFERENCE BETWEEN RS.12,39,80,822 LESS RS.8,70,00,000/ - TOTALING TO RS.3,69,80,822/ - . THE APPELLANT ON THE OTHER HAND HAVE SUBMITTED THAT AS PER PROVISIONS OF SECTION 36(1)(III) AS W ELL AS 37(1) THE ENTIRE INTEREST EXPENSES BEING FOR THE PURPOSE OF BUSINESS HAS TO BE A ILOWED IN TOTO, AS SAME WAS UNDOUBTEDLY AND UNDISPUTEDLY TAKEN FOR THE PURPOSE OF BU SINESS AND AMOUNT KEPT WITH UTIPL WAS ALSO A BUSINESS TRANSACTION. IT IS FOR THIS RE ASON THAT UTIPL PAID THEM COMPENSATION HAVING FAILED TO FULFIL L THE BUSINESS OBLIGATION, AND THE AO HAS TREATED COMPENSATION AS FROM BUSINESS REVENUE, HOWEVER HAVE N O T ALLOWED THE EXPENSES INCURRED FOR THE PURPOSE. FOR THE SAME, THE APPELLAN T HAVE RELIED UPON VARIOUS DECISIONS INCLUDING THAT OF MADHAV PRASAD JATIA VS. CIT 118, ITR 200 (SC] A ND PUNJAB STAINLESS STEEL IND USTRIES VS, CIT, 324 396 BY HON BLE DELHI HIGH COURT. 4.3 ON THESE GIVEN FACTS, WHERE THE AMOUNT WAS BORROWED FOR THE PURPOS E OF BUSINESS AND WAS TRANSACTED ALSO FOR THE PURPOSE OF BUSINESS ONLY, NOTWITHSTANDING THE FACT THAT SAID BUSINESS TRANSACTION COULD NOT BE EFFECTED AS THE PURPOSE WAS NOT SERVED AND THAT ONLY HAS RESULTED INTO COMPENSATION FROM THE PARTY ON THE OTHER HAN D, WHICH HAS BEEN DULY REFLECTED AS REVENUE BY THE APPELLANT COMPANY, I AM OF THE CONSIDERED VIEW THAT STAND TAKEN BY THE AO TO ALLOW THE INTEREST EXPENSES ONLY UP TO THE EXTENT OF CO MPENSATION RECEIVED IS NOT SUPPORTED BY THE ACCEPTED PRINCIPLE OF ACCOUNT ANCY. IT IS LIKE SAYING THAT EVERY EXPENSE INCURRED FOR THE PURPOSE MUST YIELD INTO PROFIT. IF THAT BE T HE CASE THERE CANNOT BE A LOSS IN THE BUSINESS AT ALL. THUS ON THESE GIVEN FACTS WHERE TH ERE IS NO ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 6 DISPUTE THAT THE INTEREST WERE PAID ON THE FUNDS WHIC H WERE UTILISED FOR BUS INESS PURPOSE ONLY, IRRESPECTIVE OF THE FACT THAT THE SAME COULD NOT REACH TO ITS DESIRED A ND, THUS RESULTING INTO COMPENSATION, THE EXPENSES HAVE TO BE ALLOWED U/S.36(1 )( I I) OF THE ACT A N D HENCE ARE ALLOWED. 11. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT AO HAS DISALLOWED PART OF THE INTEREST EXPENDITURE ON THE PLEA THAT COMPENSATION RECEIVED FROM URBAN TRANSPORT INFRASTRUCTURE PVT. LTD., WAS LESS, ACCORDINGLY, DIFFERENCE BETWEEN THE INTEREST EXPENDITURE AND COMPENSATION S O RECEIVED WAS DISALLOWED. THE CIT(A) HAS DELETED THE DISALLOWANCE BY RECORDING A FINDING OF FACT THAT AMOUNT WAS BORROWED FOR THE PURPOSE OF BUSINESS AND UTILIZED FOR THE PURPOSE OF BUSINESS ONLY. THE CIT(A) ALSO OBSERVED THAT MERELY BECAUSE THE SAID BUSI NESS TRANSACTION WITH M/S. URBAN TRANSPORT INFRASTRUCTURE PVT. LTD., COULD NOT BE MATERIALIZED WHICH RESULTED INTO COMPENSATION FROM THE SAID PARTY TO THE ASSESSEE WHICH HAS BEEN DULY REFLECTED AS REVENUE RECEIPT BY THE ASSESSEE, DISALLOWANCE O F PART OF TH E INTEREST EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS CANNOT BE MADE . THE CIT(A) ALSO OBSERVED THAT ANY PART OF EXPENSE INCURRED FOR THE PURPOSE OF BUSINESS MAY NOT NECESSARILY RESULT INTO ANY PROFIT. ON THESE FACTS, THE CIT(A) HA S DELETED THE DISALLOWANCE OF INTEREST. 12. THE EXPRESSION 'FOR THE PURPOSE OF BUSINESS' OC CURS IN SECTION 36( L)(III ) AND AL SO IN SECTION 37(1). A SIMILAR EXPRESS ION WITH DIFFERENT W OR DI NG ALSO OCCURS IN SECTION 57(III ) WHICH READS AS 'FOR THE PURPOSE OF M AKING OR EARNING INCOME. THIS ISSUE CAME UP FOR CONSIDERATION BEFORE THE SUPR EME COU RT AND HON'BLE SUPR EME COU RT WHILE GIVING JUDGMENT IN ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 7 THE CASE OF M AD HAV PRASAD JATIA V. C LT. (SC) 118LTR 200 HAS OBSERV ED THAT THE EXPRESSION O CCU R RI NG IN SECTION 36(L)( III) IS WIDER IN SCOPE THAN THE EXPRESSION OCCURRING IN SECTION 57(III). M EANING THEREBY THE SCOPE FOR ALLOWING A DEDUCTION U NDER SECTION 36(1)(III ) WOULD BE MUCH WID ER THAN ONE AVAILABLE UNDER SECTION 57(III). THIS PHRASE, AS HELD BY MANY LEGAL PRONOUNCEM ENT IS THE MOST IMPORTANT YARDSTICK FOR THE ALLOWABILI TY OF DEDUCTION U NDER SECTION 36 (1 ) (I II) OF INCOME T AX ACT, 1961. WHILE EXPLAINING THE MEAN ING OF THIS PHRASE THE HON' B IE SUPREME COURT IN THE CASE OF S. A. BUILDERS LTD., VS. CIT(A), CHANDIGARD REPOR TED IN 288 ITR 1 HAS USED THE WORD 'COMMERCIAL EXPEDIENCY'. BY USING THIS PHRASE HON'BLE SUPREME COURT HAS GIVEN A NEW DIMENSION AND CL ARIFIED THE CONCEPT FURTHER. IN THE JUDGMENT , THE SUPREME COURT HAS DEFINED COMMERCIAL EXPEDIENCY' AS 'AN EXPRESSION OF W IDE IMPORT AND' INCLUDES SUCH EXPENDITU RE 'AS A PRUDENT ' BUSINESSMAN INCURS' FOR THE PURPOSE OF BUSINESS . THE EXPE NDITURE MAY N O T HAVE BEEN INCURRED UNDER ANY LEGA L OBLIGATION, BUT YET IT IS ALLOW ABLE AS A BUSINESS EXPENDITURE, IF IT WAS INCURRED O N' GRO UNDS OF COMMERCIAL EXPEDIENCY'. FURTHER, FOLLOWING THIS JUDGMENT THE HIGH COURT OF DELHI, IN THE CASE OF PUNJAB STAINLEES STEEL INDS. VS; OTT 324 ITR 396, HAS FURTHER ELABORATED 'THE COMMERCIAL EXPEDIENCY WOULD INCLUDE SUCH PURPOSE AS IS EXPECTED BY THE AS SESSEE TO ADVANCE ITS BUSINESS INTE RESTS, WHICH HAS TO BE DISTINGUISHED FROM THE PERSONAL INTEREST O F ITS DIRECTORS OR PARTNERS AS THE CASE MAY BE. IN OTHER WORDS, THERE HAS TO BE A N EXUS BETWEEN THE A DVANCING OF FUNDS AND BUSINESS INTEREST OF THE, ASSESS EE - FIRM,. ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 8 13. ON THE FACTS OF THE CASE, WE FOUND THAT ALL THE FOLLOWING THREE CONDITIONS FOR ALLOWING DEDUCTION U/S.36 (1)(III) WAS SATISFIED . (I) THE MONEY, I.E., CAPITAL HA S BEEN BORROWED BY THE ASSESSEE (II) IT MUST HAS BEEN BORROWED FOR THE PURPOSE OF BUSINESS. (III) THE ASSESSEE HA S PAID INTEREST ON THE BORROWED AMOUNT I.E., HE HAS SHOWN THE SAME AS AN ITEM OF EXPENDITURE. 14. FURTHER IN THE CASE OF CIT V, DALMIA CEMENT (B) LTD., 254 ITR 377 (DELHI) IT HAS BEEN HELD THAT, IF ALL THE REQUISITE CONDITIO NS FOR ALLOWANCE OF INTEREST ARE FULFILLED, IT IS NOT POSSIBLE AND OPEN TO THE REVENUE TO MAKE A PART DISALLOWANCE, UNLESS THERE IS A POSITIVE FINDING RECORDED THAT A PART OF THE AMOUNT BORROWED WAS NOT USED FOR THE PURPOSES OF THE BUSINESS. AS WAS OBSERVE D IN MAHADEV PRASAD'S CASE (1979) I L8 ITR 200 (SC) , THE EXPRESSION 'FOR THE PURPOSE OF BUSINESS' APPEARING IN S. 36( I )(III) AND S. 37( I) IS WIDER IN SCOPE THAN THE EXPRESSION 'FOR THE PURPOSE OF MAKING OR EARNING INCOME' USED IN S. 57(III). THEREFORE, TH E SCOPE FOR ALLOWING A DEDUCTION U/ S.36( I )(III) IS MUCH WIDER THAN THE ONE AVAILABLE U/S.57(III). 15. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE OF INTEREST IN RESPECT OF FUNDS BOR ROWED FOR THE PURPOSE OF BUSINESS . 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 31 / 03 /2017 S D/ - ( SANDEEP GOSAIN ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 31 / 03 /201 7 KARUNA SR. PS ITA NO. 1979/MUM/2015 M/S.URBAN INFRASTRUCTURE & HOLDING PVT. LTD., 9 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//