The ACIT, Thiruvalla V. Sri.K.T. Thomas, Chengannur

ITA 259/COCH/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96775 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: K M JOSE
• Keywords: Business expenditure; Retrospective amendment; Capital expenditure
• Section: 143(3); 37(1); 147; 37

Judgement Text

ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI B P JAIN , A M & G EORGE GEORGE.K , J M ITA NO S . 259, 260 & 402/COCH/2015 (ASST YEAR S 2006 - 07,2011 - 12 & 2012 - 13 ) & CROSS OBJECTION NOS 11,12 & 1 4 /COCH/2015 THE ASST COMMR OF INCOME T AX CIRCLE 1 THIRUVALLA VS SHRI K T THOMAS KANNATTU FINANCIERS ENGINEERING COLLEGE ROAD CHENGANNUR 689 121 ( APPELLANT /RESPONDENT ) (RESPONDENT /CROSS OBJECTOR ) PAN NO. ADSPT7765J ASSESSEE BY SHRI K M JOSE REVENUE BY SHRI KP GOPAKUMAR, SR DR DATE OF HEARING 5 TH OCT 2015 DATE OF PRONOUNCEMENT 28 TH OCT 2015 OR D ER PER GEORGE GEORGE. K. J M : THESE THREE APPEALS, AT THE INSTANCE OF THE REVENUE, ARE DIRECTED AGAINST THE ORDERS OF THE CIT (A), KOTTAYAM, DATED 25.3.2015, 25.3.2015 AND 28.5.20 15 RESPECTIVELY. THE RELEVANT ASSESSMENT YEARS ARE 2006 - 07, 2011 - 12 AND 2012 - 13. T HE ASSSESSEE HAS ALSO FILED CROSS OBJECTIONS AGAINST THE APPEALS PREFERRED BY THE REVENUE FOR THE SAID ASSESSMENT YEARS. ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 2 I . ITA NOS.259, 260 & 402/ COCH/20 1 5 - AYS: 2006 - 07; 11 - 12 & 12 - 13 BY THE REVENUE: THE REVENUE HAS, IN ITS GROUNDS OF APPEALS FOR ALL THE ASSESSMENT YEARS UNDER APPEAL, RAISED AN IDENTICAL SOLITARY ISSUE IS; W HETHER THE CIT (A) WAS JUSTIFIED IN HOLDING THAT THE PAYMENT O F INTERESTS OF RS.1.54 CRORES, RS.2.91 CRORES & RS.3.60 CRORES FOR THE AYS. 2006 - 07, 2011 - 12 & 2012 - 13 RESPECTIVELY CLAIMED AS BUSINESS EXPENDITURE BY THE ASSESSEE IS ADMISSIBLE U/S 36(1) OF THE ACT? II. C0 NOS.11, 12 & 1 4 / COCH/20 15 - AYS: 2006 - 07, 11 - 12 & 12 - 13 BY THE ASSESSEE: THE ASSESSEE HAS, IN HIS CROSS OBJECTIONS FOR ALL THE ASSESSMENT YEARS UNDER APPEAL [A.YS 2006 - 07, 2011 - 12 AND 2012 - 13], SUPPORTED THE STAND OF THE CIT (A) IN ALLOWING THE DEDUCTIONS U/S 36(1)(III) OF THE ACT FOR THE PAYMENT OF INTERESTS ON DEPOSITS. APART FROM THE ABOVE, FOR THE AY 2006 - 07, THE ASSESSEE HAS ALSO SUPPORTED THE FINDINGS OF THE CIT (A) IN QUASHING THE PROCEEDINGS INITIATED BY THE AO U/S 147 OF THE ACT. 2. AS THE ISSUE RAISED BY THE REVENUE FOR THE A LL THE ASSESSMENT YEARS PERTAINS TO THE SAME ASSESSEE, THE APPEALS OF THE REVENUE AS WELL AS THE CROSS OBJECTIONS OF THE ASSESSEE WERE HEARD AND CONSIDERED TOGETHER AND DISPOSED OF BY THIS COMMON ORDER. ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 3 A.Y. 2006 - 07: 3 BRIEFLY STATED, THE FACTS OF THE IS SUE ARE AS UNDER: THE ASSESSEE, AN INDIVIDUAL, WAS ENGAGED IN THE BUSINESS OF MONEY LENDING IN THE NAME AND STYLE OF M/S. KANNATTU FINANCIERS. THE ASSESSMENT FOR THE AY UNDER CONSIDERATION WAS CONCLUDED U/S 143(3) OF THE ACT DT.28.11.2008 ASSESSING THE T OTAL INCOME AT RS.4,88,060/ - . SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 OF THE ACT ON THE GROUND THAT RS.1.45 CRORES BEING INTEREST PAID ON PUBLIC DEPOSITS WAS WRONGLY ALLOWED. DURING THE COURSE OF RE - ASSESSMENT PROCEEDINGS, AFTER DUE CONSIDERATI ON OF THE ASSESSEES CONTENTIONS AND FOR THE REASONS RECORDED IN THE RE - ASSESSMENT ORDER, THE AO HAD DISALLOWED THE INTEREST CLAIMED ON DEPOSITS ACCEPTED FROM THE PUBLIC IN VIOLATION OF THE MONEY LENDERS ACT, 1958. FOR ALMOST IDENTICAL REASONS, THE AO HAD DISALLOWED THE INTERESTS CLAIMED U/S 37(1) OF THE ACT FOR THE AYS 2011 - 12 AND 2012 - 13 ALSO. 4. AGGRIEVED, THE ASSESSEE TOOK UP THE ISSUE, AMONG OTHERS, BEFORE THE CIT (A). THE CIT (A) HAD, AFTER DUE CONSIDERATION OF THE ASSESSEES CONTENTIONS AND ALSO IN CONSONANCE WITH THE FINDINGS OF THE EARLIER BENCH OF THIS TRIBUNAL IN THE CASE OF SRI ARUN THOMAS [ITA NO. 248/COCH/2012 AND C.O.16/COCH/2012 DATED 22.3.2013] DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FOR IDENTICAL REASONING, THE CIT (A) HAD DECIDED TH E MATTER IN FAVOUR OF THE ASSESSEE FOR THE AYS 2011 - 12 AND 2012 - 13 ALSO. ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 4 5. AGGRIEVED, THE REVENUE HAS COME UP BEFORE US WITH THE PRESENT APPEALS. DURING THE COURSE OF HEARING, THE SUBMISSIONS MADE BY THE LEARNED DR ARE SUMMARIZED AS UNDER: - THAT THE CIT ( A) HAD NOT ACCEPTED THE FACT THAT BY ACCEPTING DEPOSITS FROM THE PUBLIC, THE ASSESSEE HAD CLEARLY VIOLATED THE PROVISIONS OF KERALA MONEY LENDERS ACT [KMLA] AND TO CAMOUFLAGE THE VIOLATION, THE ACCEPTED DEPOSITS WERE NOT BROUGHT INTO THE BOOKS OF BUSINESS, YET THE EXPENSES INCURRED (INTEREST PAID) WERE CLAIMED AS A DEDUCTION FROM THE BUSINESS PROFIT. THE PAYMENT ASSUMES THE COLOUR OF EXPENDITURE INCURRED FOR A PURPOSE WHICH WAS PROHIBITED BY LAW AND, HENCE, HIT BY EXPLANATION 1 TO S. 37 OF THE ACT; - THAT THE CIT (A) OUGHT TO HAVE CONSIDERED THAT THE ASSESSEE WAS A MONEY LENDER OPERATING UNDER KMLA ENACTED BY THE STATE GOVERNMENT. AS PER S. 4(2)(III) OF THE SAID ACT, DEPOSITS SHALL BE ACCEPTED ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE RESERVE BANK OF I NDIA ACT, 1934 (CENTRAL ACT 2 OF 1934) AND AT SUCH RATES OF INTEREST NOT EXCEEDING THE RATES FIXED BY THE RBI UNDER THE NBFC (RESERVE BANK)DIRECTIONS 1977. PRIVATE MONEY LENDERS WERE PROHIBITED FROM ACCEPTING OR INVITING DEPOSITS FROM THE PUBLIC EXCEPT F ROM THE LIST OF RELATIVES SHOWN IN S. 45S OF THE RESERVE BANK OF INDIA ACT; & - THAT THE CIT (A)S DECISION GOES AGAINST THE EXPLANATION 1 TO S.37 THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. THE INTEREST PAYMENT WAS MADE FOR A PURPOSE EXPLICITLY PROHIBITED BY LAW AND, HENCE, THIS CON STITUTES AN ILLEGAL PAYMENT AND CANNOT BE CONSIDERED AN ALLOWABLE BUSINESS EXPENDITURE AS PER EXPLANATION 1 TO S. 37 OF THE ACT. 5.1. ON THE OTHER HAND, THE LEARNED AR HAD, IN SUBSTANCE, SUBMITTED THAT EXPLANATION TO S. 37(1) DOES NOT APPLY TO AN EXPEND ITURE OF THE NATURE DESCRIBED U/SS. 30 TO 36 OF THE ACT AND THAT THE INTEREST ON BORROWED CAPITAL WAS COVERED U/S 36(III) OF THE ACT AND AS SUCH, THE PROVISIONS OF S. 37(1) CANNOT BE MADE APPLICABLE TO THE PRESENT CASE FOR DISALLOWANCE OF INTEREST PAID ON BORROWED CAPITAL SINCE SUCH EXPENDITURE DID NOT COME WITHIN THE AMBIT OF S. ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 5 37(1) OF THE ACT. IN CONCLUSION, THE LEARNED AR HAD, TO DRIVE HIS POINT, PLACED STRONG RELIANCE ON THE RECENT FINDINGS OF THE EARLIER BENCH OF THIS TRIBUNAL ON AN IDENTICAL ISSUE IN THE CASE OF SRI ARUN THOMAS IN ITA NOS.3 & 4/COCH/2015 DATED 10.07.2015. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT CASE RECORDS AND ALSO THE DOCUMENTARY EVIDENCES PRODUCED BY THE LEARNED AR IN THE FORM OF PAPER BOOKS. 7. AT THE OUT - SET, WE WOULD LIKE TO POINT OUT THAT AN IDENTICAL ISSUE TO THAT OF THE PRESENT ONE CAME UP FOR CONSIDERATION BEFORE THE EARLIER BENCH OF THIS TRIBUNAL IN THE CASE OF SRI ARUN THOMAS (SUPRA). AFTER DUE CONSIDERATION OF RIVAL SUBMISSIONS, TH E EARLIER BENCH HAD DISMISSED THE REVENUES APPEAL. FOR READY REFERENCE, THE RELEVANT PORTIONS OF THE FINDINGS OF THE EARLIER BENCH ARE REPRODUCED AS UNDER: 5. (ON PAGE 4)..THE ASSESSING OFFICER MADE THE DISALLOWANCE BY FOLLOWING EXPLANATION TO SECT ION 37(1) OF THE ACT. AS REGARDS SECTION 37(1) OF THE ACT, CBDT HAS CLARIFIED VIDE CIRCULAR NO.772 DATED 23/12/1998 THAT WHERE THE DISALLOWANCE HAS TO BE MADE WITH REGARD TO THE CLAIMS MADE BY THE ASSESSES IN RESPECT OF PAYMENTS ON ACCOUNT OF PROTECTION M ONEY, EXTORTION, HAFTA, BRIBES ETC., AS BUSINESS EXPENSES. WHEREAS IN THE PRESENT CASE, THERE IS NO PAYMENT ON ACCOUNT OF PROTECTION MONEY, EXTORTION, HAFTA, BRIBES ETC., AND, THEREFORE, EXPLANATION TO SECTION 37(1) CANNOT BE MADE APPLICABLE TO THE PRESEN T FACTS AND CIRCUMSTANCES OF THE CASE. 6. AS REGARDS APPLICABILITY OF SECTION 37(1), IT EXCLUDES EXPENDITURE WHICH FALLS UNDER SECTIONS 30 TO 36, CAPITAL EXPENDITURE OR PERSONAL EXPENDITURE. OBVIOUSLY, THE CASE FALLS U/S 36(1)(III) OF THE ACT WHEREIN DED UCTION IS ALLOWED FOR THE AMOUNT OF INTEREST PAID IN ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 6 RESPECT OF CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS. ACCORDINGLY, EXPENDITURE IS ALLOWED U/S 36(1)(III). THEREFORE, SECTION 37(1) IS NOT APPLICABLE TO THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE . AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE ITAT, COCHIN BENCH IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10 AND IT IS PERTINENT TO REPRODUCE THE ORDER OF THE BENCH DATED 22/03/2013 HEREIN: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH THE PROVISIONS SECTION 37(1) OF THE INCOME - TAX ACT WHICH READS AS FOLLOWS: 37(1) ANY EXPENDITURE NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN SECTIONS 30 TO 36 AND (NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCU RRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. A BARE READING OF SECTION 37(1) CLEARLY SHOWS THAT ANY EXPENDITURE WHICH IS NOT IN THE NATURE DESCRIBED U/SS 30 TO 36 AND NOT BEING CAPITAL EXPENDITURE OR PERSONAL EXPENDITURE LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS HAS TO BE ALLOWED IN COMPUTING THE TOTAL INCOME. THEREFORE, IT IS OBVIOUS THAT THE EXPENDITURE WHICH FALLS UNDER SECTIONS 30 TO 36 AND CAPITAL EXPENDI TURE AND PERSONA EXPENDITURE ARE EXCLUDED FROM SECTION 37 OF THE ACT. FOR REMOVAL OF DOUBTS EXPLANATION 1 TO SECTION 37(1) INTRODUCED BY FINANCE (NO.2) ACT OF 1998 WITH RETROSPECTIVE EFFECT FROM 01.04.1962 CLARIFIES THAT ANY EXPENDITURE INCURRED FOR ANY P URPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE TREATED AS INCURRED FOR BUSINESS AND NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 7 EXPENDITURE. WHILE CLARIFYING EXPLANATION TO SECTION 37(1), THE CBDT CLARIFIED IN CIRCULAR NO.772 D ATED 23.12.1998 AS UNDER: 20.1. SECTION 37 OF THE INCOME - TAX ACT IS AMENDED TO PROVIDE THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE S OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. THIS AMENDMENT WILL RESULT IN DISALLOWANCE OF THE CLAIMS MADE BY CERTAIN ASSESSES IN RESPECT OF PAYMENTS ON ACCOUNT OF PROTECTION MONEY, EXTORTION, HAF T, BRIBES, ETC., AS BUSINESS EXPENDITURE IS NOT AN ALLOWABLE DEDUCTION IN COMPUTATION OF INCOME. FROM THE ABOVE EXPLANATION, THE LEGISLATURE INTENDED TO DISALLOW THE PAYMENT LIKE PROTECTION MONEY, EXTORTION, HAFTA, BRIBE, ETC., WHEN IT WAS CLAIMED AS BUS INESS EXPENDITURE. THE CONTENTION OF THE LD. SENIOR COUNSEL FOR THE TAXPAYER IS THAT THE PAYMENT OF INTEREST BY THE TAXPAYER COMES WITHIN THE AMBITS OF SECTIONS 30 TO 36. NO DOUBT, SECTION 37(1) IS NOT APPLICABLE IN RESPECT OF EXPENDITURE WHICH FALLS WIT HIN SECTIONS 30 TO 36 OF THE ACT. IN THIS CASE, THE TAXPAYER ADMITTEDLY BORROWED FUNDS FOR ENHANCING THE WORKING CAPITAL FOR THE PURPOSE OF MONEY LENDING BUSINESS. INTEREST ON CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS FALLS WITHIN THE PROVISIONS SECTI ON 36(1)(III) OF THE ACT. THEREFORE, ANY INTEREST PAID ON THE CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS OR PROFESSION HAS TO BE ALLOWED AS DEDUCTION U/S 36(1) (III) OF THE ACT. IN VIEW OF THE ABOVE, PROVISIONS OF SECTION 37(1) MAY NOT BE APPLICABLE IN RESPECT OF INTEREST ON THE CAPITAL BORROWED FOR BUSINESS PURPOSE. APART FROM THIS, THE TAXPAYER CLAIMS THAT THE FUNDS WERE BORROWED IN THE PERSONAL CAPACITY AND NOT IN THE NAME OF BUSINESS CONCERN. THE PAYMENT OF INTEREST ON THE BORROWED CAPITAL FALLS W ITHIN SECTION 36(1) (III) OF THE ACT AND, HENCE, THE PROVISIONS OF SECTION 37(1) MAY NOT BE APPLICABLE. THEREFORE, IT MAY BE IMMATERIAL WHETHER THE MONEY WAS BORROWED IN PERSONAL CAPACITY OR NOT? WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENTS OF THE K ARNATAKA HIGH COURT AND BOMBAY HIGH COURT. IN AMARJEET KAUR (SUPRA) AND IN TARAPOREWALA SONS CO (P) LTD (SUPRA), THE PAYMENT OF INTEREST WAS NOT ON THE MONEY BORROWED FOR CAPITAL. IN TARAPOREWALA SONS CO (P) LTD (SUPRA), THE PAYMENT WAS MADE AS SECRET CO MMISSION. IN AMARJEET KAUR (SUPRA) , DEPOSIT LINKED INCENTIVE SCHEME WAS FOUND TO BE MONEY CIRCULATION SCHEME. THE ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 8 RELEVANT EXPENDITURE IN BOTH CASES WAS ALLOWABLE U/S 37(1) OF THE ACT. THEREFORE, THE HIGH COURT FOUND THAT EXPENDITURE WOULD FALL UNDER E XPLANATION TO SECTION 37(1) OF THE ACT. IN THIS CASE, THE EXPENDITURE (III), THEREFORE, THE EXPLANATION TO SECTION 37(1) IS NOT APPLICABLE. THIS BENCH OF THIS TRIBUNAL IN TAXPAYERS OWN CASE FOR THE ASSESSMENT YEAR 2008 - 09 IN ITA NO. 115/COCH/2012 & CO N O.10/COCH/2012 VIDE ORDER OF EVEN DATED HAS ALREADY UPHELD THE DECISION OF THE CIT (A) DELETING THE DISALLOWANCE FOR THE DETAILED REASONS AS STATED ABOVE. THEREFORE, CONSISTENT WITH OUR EARLIER DECISION FOR THE SAME REASONS FOR ASSESSMENT YEAR 2008 - 09, TH E ORDER OF CIT (A) IS CONFIRMED. 6. THE.ARE DISMISSED. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND OUR FINDINGS HEREINABOVE AND THE DECISION OF THE ITAT, COCHIN BENCH FOR THE ASSESSMENT YEAR 2009 - 10 REPRODUCED HEREIN ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (A) WHO HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND, THEREFORE, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 7.1. IN CONFORMITY WITH THE FINDINGS OF THE EARLIER BENCH OF THIS TRIBUNAL (SUPRA) ON A SIMILAR ISSUE TO THAT OF THE MATTER UNDER APPEAL, WE ARE OF THE VIEW THAT THE CIT (A) WAS JUSTIFIED IN ALLOWING THE INTERESTS PAID ON THE CAPITALS BORROWED FOR THE PURPOSE OF BUSINESS AS DEDUCTIONS U/S 36(1)(III) OF THE ACT FOR THE ASSESSMENT YEARS 2006 - 07, 2011 - 12 AND 2012 - 13 RESPECTIVELY. IN ESSENCE, THE REVENUES APPEALS FOR ALL THE ASSESSMENT YEARS 2006 - 07, 2011 - 12 AND 2012 - 13 ARE DISMISSED. 8. THE CROSS OBJECTIONS FILED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION WERE, IN FACT, ONLY TO SUPPORT THE FINDINGS OF THE CIT (A) [ NAMELY, (I) THE INTEREST PAYMENTS MADE ON THE CAPITALS BORROWED FOR THE PURPOSE OF BUSINESS AS DEDUCTIONS U/S 36(1)(III) OF THE ACT FOR THE AYS 2006 - 07, ITA NOS.259, 260 & 402/COCH/2015 & C O NOS . 11,12 & 1 4 /COCH/2015 9 2011 - 12 AND 2012 - 13 & (II) FOR THE AY 2006 - 07, IN QUASHING THE PR OCEEDINGS INITIATED BY THE AO U/S 147 OF THE ACT] AND, THEREFORE, THEY WERE NOT MAINTAINABLE. IN SUBSTANCE, THE APPEALS FOR THE AYS 2006 - 07, 2011 - 12 AND 2012 - 13 PREFERRED BY THE REVENUE AS WELL AS THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 9. I N THE RESULT, THE REVENUES APPEALS FOR THE ASSESSMENT YEARS 2006 - 07, 2011 - 12 AND 2012 - 13 ARE DISMISSED AND THE CROSS OBJECTIONS OF THE ASSESSEE FOR THE SAID ASSESSMENT YEARS ARE ALSO DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE O PEN COURT ON THIS 28 TH , DAY OF OCT 2015 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 28 TH , OCT 2015 RAJ* COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN