THE DCIT CIR 3(3), MUMBAI V. M/S. VIDEOCON INTERNATIONAL LTD, MUMBAI

ITA 4787/MUM/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8313 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 05-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 21-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A P SINGH
• Keywords: Proportionate interest; Additional evidence; Bad and doubtful debts
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A.NO. 4787/MUM/2008 ASSESSMENT YEAR : 2004-05 THE DY. COMMISSIONER OF INCOME- TAX, CIRCLE 3(3) ROOM NO. 609, AAYAKAR BHAVAN, MUMBAI 400 020 VS. VIDEOCON INTERNATIONAL LTD., 17 TH FLOOR, C WING, MITTAL COURT, NARIMAN POINT, MUMBAI 400 021. PAN: AAACV 2300 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.P. SINGH RESPONDENT BY : SHRI SHAILESH SHAH O R D E R PER P.M. JAGTAP, AM : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXXII, MUMBAI, DATED 31.03.2008 FOR THE ASSESSMENT YEAR 2004-05. 2. IN GROUND NO.1, THE REVENUE HAS CHALLENGED THE A CTION OF THE LEARNED CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE FOR DE DUCTION OF RS. 20,53,624/- BEING CREDIT BALANCE IN P&L ACCOUNT MAINTAINED WITH CENTR AL EXCISE DEPARTMENT. 3. THE ASSESSEE, IN THE PRESENT CASE, IS A COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ELECTRONIC GADGETS, TR ADING, INVESTMENTS, LEASING AND FINANCE. IT IS LIABLE TO PAY CENTRAL EXCISE DUTY T O CLEAR THE GOODS FROM ITS FACTORY. IT HAS THE OPTION TO TAKE CREDIT FOR MODVAT ELEMENT OF EXCISE DUTY, WHICH IS PAID ON THE PURCHASE OF INPUT SUCH AS RAW-MATERIAL, ETC. AL TERNATIVELY, THE ASSESSEE CAN PAY THE EXCISE DUTY THROUGH PERSONAL LEDGER ACCOUNT (PLA) MAINTAINED WITH THE CENTRAL EXCISE DEPARTMENT. ON 31.03.2004, THE ASSES SEE HAD CREDIT BALANCE OF RS.20,53,624/- IN THE PLA ACCOUNT. THIS WAS SHOWN UNDER THE HEAD LOANS AND ADVANCES IN THE BALANCE SHEET OF THE ASSESSEE COMP ANY. THE SAID AMOUNT ACTUALLY ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 2 PAID BY THE ASSESSEE WAS CLAIMED AS DEDUCTION UNDER SECTION 43B, PLACING RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS. THIS CLAIM OF THE ASSESSEE, HOWEVER, WAS NOT ACCEPTED BY THE ASSESSING OFFICER AS, ACCORDING TO HIM, THE AMOUNT LYING IN THE PLA WAS NOTHING BUT EXCISE DUTY PAID BY THE ASSESSE E IN ADVANCE. HE HELD THAT THE SAID PAYMENT WAS NOT MADE BY THE ASSESSEE IN DISCHA RGING OF THE STATUTORY LIABILITY AND ACCORDINGLY, THE DEDUCTION CLAIMED BY THE ASSESSEE ON THIS ISSUE WAS DISALLOWED BY HIM. 4. ON APPEAL, THE LEARNED CIT(A) DELETED THE DISALL OWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE FOLLOWING THE DECIS ION OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR THE EARLIER YEARS AS WELL A S THE ORDERS OF THE TRIBUNAL UPHOLDING THE DECISIONS OF THE LEARNED CIT(A). AGG RIEVED BY THIS RELIEF ALLOWED BY THE LEARNED CIT(A) TO THE ASSESSEE, THE REVENUE HAS RAISED THIS GROUND NO.1 IN ITS APPEAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED REPRESENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE BY THE DECISION OF THE SPECIAL BENCH OF THE I.T.A.T IN THE CASE OF DCIT VS . GLAXO SMITHKLINE CONSUMER HEALTHCARE LTD. 107 ITD 343 (CHD.)(SB)., IT ALSO O BSERVED THAT A SIMILAR DISALLOWANCE MADE BY THE ASSESSING OFFICER IN ASSES SEES OWN CASE WAS DELETED BY THE LEARNED CIT(A) IN THE EARLIER YEARS AND THE TRIBUNAL HAS UPHELD THE SAID DECISIONS OF THE LEARNED CIT(A) DECIDING A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. SINCE ALL THE MATERIAL FACTS RELEVANT TO THE SAID I SSUE AS INVOLVED IN THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THAT OF THE EARLIER YE ARS, WE RESPECTFULLY FOLLOW THE ORDERS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE F OR THE EARLIER YEARS AS WELL AS THE ORDER OF THE SPECIAL BENCH IN THE CASE OF GLAXO SMITHKLINE CONSUMER HEALTHCARE LTD. (SUPRA) AND UPHOLD THE IMPUGNED ORD ER OF THE LEARNED CIT(A) ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 3 DECIDING THIS ISSUE IN FAVOUR OF THE ASSESSEE. GROU ND NO.1 OF THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 6. IN GROUND NO.2, THE REVENUE HAS CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN ALLOWING THE DEDUCTION OF RS.1,04,43,421/ - ON ACCOUNT OF INTEREST PAID ON DELAYED PAYMENT OF EXCISE DUTY. 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF INTEREST EXPENDITURE WA S EXAMINED BY THE ASSESSING OFFICER. ON SUCH EXAMINATION HE, FOUND THAT INTERES T OF RS. 1,04,43,421/- WAS PAID BY THE ASSESSEE ON ACCOUNT OF THE DELAYED PAYMENT O F EXCISE DUTY. IN THIS REGARD, THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE SA ID INTEREST PAID BY IT WAS COMPENSATORY IN NATURE WAS NOT ACCEPTED BY THE ASSE SSING OFFICER IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANT IATE THE SAME. ACCORDING TO HIM, THE SAID INTEREST PAID BY THE ASSESSEE FOR DE LAY IN PAYMENT OF EXCISE DUTY WAS OF PENAL NATURE AND THE SAME WAS DISALLOWED BY HIM BY INVOKING EXPLANATION TO SECTION 37(1). BEFORE THE LEARNED CIT(A), IT W AS SUBMITTED ON BEHALF OF THE ASSESSEE THAT INTEREST ON DELAYED PAYMENT OF EXCISE DUTY PAID UNDER SECTION 11AA AND 11AB OF THE CENTRAL EXCISE ACT, 1944 IS COMPENS ATORY IN NATURE AND THE SAME CANNOT BE TREATED AS PENAL IN NATURE SINCE THE PENA LTY WAS SEPARATELY PROVIDED UNDER SECTION 11AC OF THE CENTRAL EXCISE ACT, 1944 FOR SHORT LEVY OR NON-LEVY OF DUTY. IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED ON BEHALF OF THE ASSESSEE, INTER ALIA, ON THE DECISIONS OF THE HONBLE SUPREM E COURT IN THE CASE OF MAHALAXMI SUGAR MILLS CO. (123 ITR 429)(SC) AND IN THE CASE O F PRATHIBHA PROCESSORS V. UNION OF INDIA AIR 1997 SC 138. AFTER TAKING INTO CONSIDE RATION THE RELEVANT PROVISIONS OF THE CENTRAL EXCISE ACT, 1944 AND THE JUDICIAL PRO NOUNCEMENTS CITED ON BEHALF OF THE ASSESSEE, THE LEARNED CIT(A) FOUND MERIT IN THE STAND OF THE ASSESSEE THAT INTEREST PAID FOR DELAYED PAYMENT OF EXCISE DUTY WA S COMPENSATORY IN NATURE AND ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 4 NOT PENAL. HE, THEREFORE, DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT I NTEREST ON DELAYED PAYMENT OF EXCISE DUTY IS PAYABLE BY THE ASSESSEE AS PER RULE 8(3) OF THE CENTRAL EXCISE RULES, 2002 WHICH PROVIDES THAT IF THE ASSESSEE FAILS TO P AY THE AMOUNT OF DUTY BY THE DUE DATE, HE SHALL BE LIABLE TO PAY THE OUTSTANDING AMOUNT ALONG WITH INTEREST AT THE RATE SPECIFIED BY THE CENTRAL GOVERNMENT ON THE OUTSTANDING DEMAND FOR THE PERIOD STARTING WITH THE FIRST DAY AFTER THE DUE DA TE TILL THE DATE OF ACTUAL PAYMENT OF THE OUTSTANDING AMOUNT. SECTION 11AA AND SECTION 11AB OF THE CENTRAL EXCISE ACT, 1944, PROVIDE FOR INTEREST ON DELAYED PAYMENT ON DUTY AT SUCH RATE AS IS FOR THE TIME BEING FIXED BY THE BOARD FROM THE DUE DATE TILL THE DATE OF PAYMENT DUTY. SECTION 11AC OF THE CENTRAL EXCISE ACT, 1944 PROVID E FOR PENALTY FOR SHORT LEVY OR NON-LEVY OF DUTY IN CERTAIN CASES WHICH IS IN ADDIT ION TO THE INTEREST PAYABLE BY THE ASSESSEE ON DELAYED PAYMENTS OF DUTY. THESE SPECIF IC PROVISIONS CONTAINED IN CENTRAL EXCISE ACT, 1944 CLEARLY SHOW THAT INTEREST PAYABLE BY THE ASSESSEE ON DELAYED PAYMENT OF EXCISE DUTY U/S.11AA AND 11AB RE AD WITH RULE 8(3) IS COMPENSATORY IN NATURE WHEREAS PENALTY FOR SHORT LE VY OR NON-LEVY OF DUTY IS PAYABLE BY THE ASSESSEE SEPARATELY U/S.11AC. THE I NTEREST PAID BY THE ASSESSEE IN THE PRESENT CASE ON DELAYED PAYMENT OF EXCISE DUTY THUS WAS COMPENSATORY IN NATURE AS RIGHTLY HELD BY THE LEARNED CIT(A) AND NO T PENAL IN NATURE AS TREATED BY THE ASSESSING OFFICER. THE DISALLOWANCE OF THE INT EREST MADE BY THE ASSESSING OFFICER BY INVOKING EXPLANATION TO SECTION 37(1) TH US WAS NOT SUSTAINABLE AND THE LEARNED CIT(A), IN OUR OPINION, WAS RIGHT IN DELETI NG THE SAME. THE IMPUGNED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE IS ACCORDINGLY UPHELD DISMISSING GROUND NO.2 OF THE REVENUES APPEAL. ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 5 9. IN GROUND NO. 3, THE REVENUE HAS CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN DELETING THE DISALLOWANCE OF RS. 8,12,31, 486/- MADE BY THE ASSESSING OFFICER OUT OF INTEREST ON THE GROUND THAT THE SAME WAS ATTRIBUTABLE TO THE LOANS AND ADVANCES GIVEN BY THE ASSESSEE COMPANY TO ITS S ISTER CONCERNS FREE OF ANY INTEREST FOR NON-BUSINESS PURPOSES. 10. AS NOTICED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY HAD ADVANCED A TO TAL SUM OF RS.114,71,40,897/- TO FOUR OF ITS SUBSIDIARY COMPAN IES, VIZ. M/S. PARAMOUNT GLOBAL LTD., M/S. VIDECON IND. FINANCE LTD., M/S.VIDEOCON CAYMAN LTD., AND M/S. MIDDLE EAST APPLIANCES. THE CLAIM MADE BY THE ASSESSEE COM PANY IN THIS REGARD THAT THE SAID ADVANCES WERE GIVEN TO THE SUBSIDIARY COMPANIE S TO PROCURE THE LATEST QUALITY MATERIALS AT COMPETITIVE RATES WAS NOT FUND ACCEPTA BLE BY THE ASSESSING OFFICER ON EXAMINATION OF THE COPIES OF ACCOUNTS OF THE SAID P ARTIES. ACCORDING TO HIM, THE SAID ACCOUNTS REVEALED THAT THE TRANSACTIONS ENTER ED INTO BY THE ASSESSEE COMPANY WITH THE SAID PARTIES WERE PURELY OF FINAN CIAL NATURE HAVING NO BUSINESS CONNECTION. HE, THEREFORE, WORKED OUT THE INTEREST ATTRIBUTABLE TO THE ADVANCES GIVEN BY THE ASSESSEE COMPANY TO THE SAID FOUR PART IES AND MADE A DISALLOWANCE OF RS. 2,01,73,405/- OUT OF INTEREST EXPENDITURE CL AIMED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO FOUND FROM THE EXAMINATION O F THE DETAILS OF OTHER ADVANCES GIVEN BY THE ASSESSEE THAT A SUM OF RS. 105,66,81, 217/- WAS ADVANCED BY THE ASSESSEE TO A GROUP CONCERN, VIZ. M/S. TROON PROPER TIES & INVESTMENTS LTD. HE ALSO FOUND THAT THE SAID ADVANCE WAS GIVEN BY THE A SSESSEE IN THE MONTH OF AUGUST 2002 AND IN THE ASSESSMENT COMPLETED FOR THE ASSESSMENT YEAR 2003-04, INTEREST TO THE EXTENT ATTRIBUTABLE TO THE SAID ADV ANCE WAS DISALLOWED AS A RESULT OF THE FAILURE OF THE ASSESSEE TO ESTABLISH THAT IT WA S GIVEN FOR BUSINESS PURPOSES. FOLLOWING THE DECISION RENDERED IN THE ASSESSMENT F OR THE ASSESSMENT YEAR 2003- 04, INTEREST ATTRIBUTABLE TO THE SAID ADVANCE CALCU LATED AT RS. 6,01,52,328/- WAS ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 6 DISALLOWED BY THE ASSESSING OFFICER IN THE YEAR UND ER CONSIDERATION. SIMILARLY, A FURTHER SUM OF RS. 9,05,753/- OUT OF INTEREST WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAME WAS ATTRIBUTABL E TO THE ADVANCES GIVEN BY THE ASSESSEE TO SOME PARTIES IN THE FORM OF SHARE APPLI CATION MONEY RELYING ON THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04, WHEREIN A SIMILAR DISALLOWANCE WAS MADE. THUS, THE TOTAL DISALLOWANCE OF RS. 8,12,31, 486/- WAS MADE BY THE ASSESSEE OUT OF INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. 11. THE MATTER WAS CARRIED BEFORE THE LEARNED CIT(A ) AND DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE CIT(A), ELABORA TE SUBMISSIONS WERE MADE ON BEHALF OF THE ASSESSEE IN SUPPORT OF ITS CASE THAT ALL THE AMOUNTS IN QUESTION WERE ADVANCED FOR THE PURPOSE OF ITS BUSINESS AND THERE WAS NO DIVERSION OF BORROWED FUNDS FOR NON-BUSINESS PURPOSES TO JUSTIFY THE DISA LLOWANCE OUT OF INTEREST EXPENDITURE. CERTAIN NEW DETAILS AND DOCUMENTS WER E FILED BY THE ASSESSEE BEFORE THE LEARNED CIT(A), WHO ADMITTED THE SAME AND SOUGH T COMMENTS OF THE ASSESSING OFFICER THEREON. THE ASSESSING OFFICER SU BMITTED A REMAND REPORT TO THE LEARNED CIT(A) OFFERING HIS COMMENTS WHICH WAS CONF RONTED TO THE LEARNED CIT(A) TO THE ASSESSEE. THE ASSESSEE ALSO FILED A WRITTEN SUBMISSION OFFERING HIS COUNTER COMMENTS ON THE REMAND REPORT SUBMITTED BY THE ASSE SSING OFFICER. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE BY THE ASSE SSEE AS WELL AS BY THE ASSESSING OFFICER AND THE DETAILED FINDINGS STATED TO BE RECORDED BY HIM IN HIS APPELLATE ORDER PASSED FOR THE ASSESSMENT YEAR 2003 -04 DECIDING A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE, THE LEARNED CIT(A) HELD THA T ALL THE INTEREST FREE ADVANCES IN QUESTION WERE GIVEN BY THE ASSESSEE FOR ITS BUSI NESS PURPOSES AND THERE BEING NO DIVERSION OF BORROWED FUNDS FOR NON-BUSINESS PUR POSES, THE DISALLOWANCE OUT OF INTEREST WAS NOT SUSTAINABLE. 12. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL FO R THE ASSESSEE HAS SUBMITTED ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 7 THAT THE IMPUGNED DISALLOWANCE OUT OF INTEREST MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LEARNED CIT(A) MAINLY RELYING ON HIS APPELLATE ORDER IN THE ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING Y EAR I.E. FOR THE ASSESSMENT YEARS 2003-04. HE HAS SUBMITTED THAT THE APPEAL FIL ED BY THE DEPARTMENT AGAINST THE ORDER OF THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR 2003-04 HAS ALREADY BEEN DISPOSED BY THE TRIBUNAL VIDE ITS ORDER DATED 13.4 .2010 PASSED IN ITA NO. 4784/MUM/2008, WHEREIN THE DECISION OF THE LEARNED CIT(A) DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OUT OF I NTEREST ON SIMILAR GROUNDS HAS BEEN UPHELD BY THE TRIBUNAL. HE HAS FILED A COPY O F THE SAID ORDER AND PERUSAL OF THE SAME SHOWS THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL BY RECORDING THE FOLLOWING OBSERVATIONS/CONCLUSIONS IN PARAGRAPH NOS. 30 TO 34. WE HAVE CAREFULLY CONSIDERED THE FACTS AND THE RIVA L CONTENTIONS. WE TAKE UP FIRST THE INTEREST REFERABLE TO THE AMOUNT ADVAN CED TO TPI ALLEGEDLY FOR THE PURCHASE OF LAND NEAR AAREY COLONY, BORIVALI. THE ASSESSEE HAS FILED A COPY OF THE RESOLUTION OF ITS BOARD OF DIRECTORS PA SSED ON 27.07.2002 AND THE SAME IS AT PAGE 104 OF THE PAPER BOOK. THE RES OLUTION SAYS THAT THE COMPANY MAY ENTER INTO A MEMORANDUM OF UNDERSTANDIN G WITH TPI WHO HAVE AGREED TO RENDER THEIR SERVICES FOR THE PURPOS E OF NEGOTIATING THE PURCHASE OF THE PROPERTY AFTER VACATING THE PRESENT TENANTS OCCUPYING THE SAME ON PAYMENT OF SERVICE CHARGES AT 1% OF THE VAL UE OF PROPERTY. IT WAS FURTHER RESOLVED THAT TPI MAY BE PAID AN ADVANCE OF RS.115.00 CRORES FOR THE PURPOSE OF NEGOTIATING AND VACATING THE EXISTIN G TENANTS OCCUPYING THE PROPERTY WHICH WAS PROPOSED TO BE PURCHASED BY THE ASSESSEE. THE RESOLUTION WENT ON TO SAY THAT IN CASE TPI IS UNABL E TO VACATE THE TENANTS OR THAT THE TRANSACTION WITH THE OWNER OF THE PROPE RTY DOES NOT MATERIALIZE FOR ANY REASON, THE ENTIRE ADVANCE SHALL BE RETURNE D BY TPI TO THE ASSESSEE AND IN THAT CASE NO SERVICE CHARGES WILL B E PAID TO TPI. THE ASSESSEE HAS ALSO FILED COPIES OF THE MEMORANDUM OF UNDERSTANDING DATED 01.08.2002 WITH TPI, COPIES OF THE CORRESPONDENCE B ETWEEN TPI AND WONDERLAND ESTATE DEVELOPERS PVT. LTD. AND SOME COR RESPONDENCE BETWEEN BMRDA AND WONDERLAND ESTATE DEVELOPERS PVT. LTD. A PERUSAL OF THE MEMORANDUM OF UNDERSTANDING SHOWS THAT THE ASSE SSEE WAS PREPARED TO PAY RS.150.00 CRORES FOR THE PROPERTY. IF THAT IS SO, THE SERVICE CHARGES PAYABLE TO TPI CAN BE A MAXIMUM OF RS.1.5 CRORES ON LY. IT IS NOT CLEAR FROM THE PAPERS FILED IN THE PAPER BOOK AS TO WHY T HE ASSESSEE REQUIRED THE LAND AND AS TO WHY TPI SHOULD BE GIVEN AN ADVAN CE OF RS.115.00 CRORES, WHICH IS MANY TIMES MORE THAN THE SERVICE C HARGES PAYABLE TO IT ON FINALIZATION OF THE DEAL. IT IS COMMON GROUND THAT TPI IS NOT THE OWNER OF THE PROPERTY AND IT IS UNUSUAL THAT DESPITE THAT TH E ASSESSEE WAS PREPARED TO GIVE AN ADVANCE OF RS.115.00 CRORES TO IT AND AC TUALLY ADVANCED RS.110.07 CRORES. WE HAVE ALSO GONE THROUGH THE CO RRESPONDENCE BETWEEN TPI AND WONDERLAND ESTATE DEVELOPERS PVT. L TD. KEPT AT PAGES 107 TO 109 OF THE PAPER BOOK. THE LETTER DATED 12. 03.2002 WRITTEN BY TPI TO WONDERLAND ESTATE DEVELOPERS PVT. LTD., THE OWNE RS OF THE PROPERTY, IS QUITE BALD AND CRYPTIC FOR A TRANSACTION WHICH APPA RENTLY IS WORTH SEVERAL CRORES OF RUPEES. EVEN THE LETTER DATED 03.03.200 2 WRITTEN BY ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 8 WONDERLAND ESTATE DEVELOPERS PVT. LTD. TO TPI IS JU ST A THREE LINE LETTER ASKING TPI TO FIND SUITABLE BUYERS FOR THE PROPERTY . BY LETTER DATED 28.03.2002 WONDERLAND ESTATE DEVELOPERS PVT. LTD. I NFORMED TPI THAT THEY HAD 15 BUNGALOW PLOTS FOR WHICH ALL APPROVALS ARE I N PLACE AND THE INTENDING PURCHASER CAN GO AHEAD WITH CONSTRUCTION ACTIVITY IMMEDIATELY. COPIES OF THE CORRESPONDENCE BETWEEN BMRDA AND WOND ERLAND ESTATE DEVELOPERS PVT. LTD. ARE ALSO AVAILABLE IN THE PAPE R BOOK BUT THESE ARE NOT RELEVANT FOR THE PURPOSE OF FINDING OUT WHETHER THE ADVANCE GIVEN BY THE ASSESSEE TO TPI IS FOR THE PURPOSES OF ITS BUSINESS . THERE IS NO INDICATION IN THE ASSESSMENT ORDER THAT THE ASSESSEE WAS ENGAG ED IN REAL ESTATE BUSINESS OR AS BUILDERS OF PROPERTIES, NOR WAS IT C LAIMED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE PROP OSED TO COMMENCE ANY SUCH BUSINESS BY ACQUIRING THE LAND. EVEN BEFORE U S THERE WAS NO ATTEMPT TO SHOW WITH REFERENCE TO THE MEMORANDUM OF ASSOCIA TION OF THE ASSESSEE COMPANY THAT IT WAS PART OF ITS BUSINESS TO DEAL IN REAL ESTATE OR AS BUILDERS. ON THE WHOLE, IT IS NOT CLEAR AT ALL AS TO WHY THE ASSESSEE REQUIRED THE PROPERTY. WE HAVE ALSO PERUSED THE WR ITTEN SUBMISSIONS DATED 21.02.2007 FILED BEFORE THE CIT(A) [PAGES 1 T O 45 OF THE PAPER BOOK]. THE ASSESSEE HAS DEALT WITH THIS ISSUE IN P ARAGRAPH 6.6.1 OF THE WRITTEN SUBMISSIONS BUT DO NOT FIND ANYTHING THEREI N TO SHOW THAT THE PURCHASE OF LAND WAS FOR THE PURPOSE OF THE ASSESSE ES BUSINESS. THE PURPOSE FOR WHICH THE LAND WAS PROPOSED TO BE ACQUI RED HAS NOT BEEN STATED THEREIN. IT WAS NECESSARY FOR THE ASSESSEE TO ADDUCE EVIDENCE TO SHOW THAT THE LAND WAS BEING ACQUIRED FOR THE PURPO SE OF ITS BUSINESS. THIS IS SO PARTICULARLY HAVING REGARD TO THE FACT T HAT PURCHASE OF LAND CAN ALSO BE BY WAY OF INVESTMENT. THERE ARE ONLY ASSER TIONS IN THE WRITTEN SUBMISSIONS TO THE EFFECT THAT THE PURCHASE OF THE LAND WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE ASSESSEES BUSIN ESS, BUT THE SAME IS NOT SUPPORTED BY ANY EVIDENCE. THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT THE GENUINENESS OF T HE DOCUMENTS FILED BY THE ASSESSEE WAS NOT IN DOUBT. HE HAS ALSO HELD TH AT IT IS THE CASE OF THE APPELLANT THAT IT WANTED TO PURCHASE PROPERTIES FOR SMOOTH AND EFFICIENT RUNNING OF ITS EXISTING BUSINESS (PARAGRAPH 8.15 O F THE IMPUGNED ORDER). IN OUR OPINION, THE GENUINENESS OF THE DOCUMENTS HA S NOTHING TO DO WITH THE CORRECTNESS OF THE ASSESSEES CLAIM. NOTWITHST ANDING THAT THE DOCUMENTARY EVIDENCE IS GENUINE, IT IS STILL NECESS ARY FOR THE ASSESSEE TO ESTABLISH THAT THE LAND WAS PROPOSED TO BE ACQUIRED FOR THE PURPOSE OF ITS BUSINESS. ON THIS ASPECT THE ASSESSEE HAS FAILED. WE ARE UNABLE TO APPRECIATE THE BASIS FOR THE OBSERVATION OF THE CIT (A) THAT THE ASSESSEE WANTED TO PURCHASE THE LAND FOR SMOOTH AND EFFICIEN T RUNNING OF ITS EXISTING BUSINESS. THERE IS HARDLY ANY MATERIAL OR EVIDENCE TO SUPPORT THIS OBSERVATION. WE ARE THEREFORE UNABLE TO APPROVE TH E DECISION OF THE CIT(A) THAT THE PROPOSED ACQUISITION OF THE LAND WA S FOR THE PURPOSE OF THE ASSESSEES BUSINESS. AS REGARDS THE AMOUNTS ADVANCED TO THE SUBSIDIARIES , THE FINDING OF THE CIT(A) IS THAT THE ASSESSEE WAS IN RECEIPT O F INTEREST FROM PARAMOUNT GLOBAL LTD. TO WHICH IT HAD ADVANCED RS.3 5.68 CRORES. IN PARAGRAPH 8.17 OF HIS ORDER HE HAS FOUND THAT THE A SSESSEE HAS CHARGED AND EARNED INTEREST INCOME OF RS.2,87,24,415/- FROM THIS COMPANY. HE HAS ALSO FOUND THAT THE RECEIPT OF THE INTEREST BY THE ASSESSEE IS CORRESPONDINGLY REFLECTED IN THE BALANCE SHEET OF P ARAMOUNT GLOBAL LTD. FOR THE FINANCIAL YEAR 2002-03. THE LEARNED DR HAD ALS O NOT DISPUTED THIS FINDING OF THE CIT(A). SINCE INTEREST HAS BEEN REC EIVED ON THE ADVANCE OF PARAMOUNT GLOBAL LTD., WE DO NOT SEE ANY JUSTIFICAT ION FOR THE DISALLOWANCE OF THE PROPORTIONATE INTEREST OF RS.1,42,87,435/- O N THE ADVANCE TO THE SAID COMPANY. WE AGREE WITH THE DECISION OF THE CIT(A) AND CONFIRM THE SAME. AS REGARDS THE AMOUNT ADVANCED TO VIDEOCON INDUSTRI AL FINANCE LTD., THE TOTAL ADVANCE IS ONLY RS.13,70,304/- AND IT HAS BEE N FOUND BY THE CIT(A) ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 9 THAT THIS COMPANY HAS DONE BUSINESS OF TRADING IN E LECTRONIC GOODS AND THE RELATIONSHIP BETWEEN THE ASSESSEE AND THIS COMPANY IS A BUSINESS RELATIONSHIP AND THE BALANCE REPRESENTS THE NET AMO UNT RECEIVABLE FROM THE SAID COMPANY. OBVIOUSLY NO INTEREST CAN BE CHARGED AS IT REPRESENTS A TRADE OUTSTANDING. WE AGREE WITH THE DECISION OF T HE CIT(A) THAT THE PROPORTIONATE INTEREST OF RS.54,858/- ON THE ADVANC E TO VIDEOCON INDUSTRIAL FINANCE LTD. CANNOT BE DISALLOWED. AS REGARDS THE ADVANCE OF RS.1,29,88,926/- IS CONCERNED, THE SAME HAS BEEN MA DE TO VIDEOCON CAYMAN LTD. THE ADVANCES WERE GIVEN IN 1999 AND WE RE CONTINUING IN THE ASSESSEES BOOKS. THE MAJOR ADVANCE OF RS.1,25,91, 800/- WAS MADE ON 26.11.2002, WHICH FALLS WITHIN THE YEAR UNDER APPEA L, AND THIS WAS CLAIMED BEFORE THE ASSESSING OFFICER TO REPRESENT MANAGEMEN T FEES PAYABLE TO THAT COMPANY. THE CLAIM WAS REJECTED BY THE ASSESSING O FFICER ON THE GROUND THAT THERE WAS NO DOCUMENTARY EVIDENCE TO SUPPORT I T. HOWEVER, BEFORE THE CIT(A) THE ASSESSEE ADDUCED ADDITIONAL EVIDENCE IN THE FORM OF A LETTER FROM ICICI BANK IN SUPPORT OF THE CLAIM AND THE SAM E WAS ADMITTED BY THE CIT(A). ON THE BASIS OF THE LETTER HE DELETED THE ADDITION OF THE PROPORTIONATE INTEREST OF RS.5,19,985/-. A COPY OF THE SAID LETTER IS AT PAGES 173 TO 176 OF THE PAPER BOOK. WE FIND FROM T HE LETTER THAT THE DEBITING OF THE MANAGEMENT FEE IN THE ACCOUNT OF VI DEOCON CAYMAN LTD. WAS A RESULT OF AN ARRANGEMENT BETWEEN THE TWO COMP ANIES PUT THROUGH BY ICICI BANK. APPARENTLY THE ASSESSEE DEBITED THE FEES PAYABLE TO ICICI BANK TO THE ACCOUNT OF VIDEOCON CAYMAN LTD. THE CO PY OF THE CHEQUE PLACED AT PAGE 176 OF THE PAPER BOOK ISSUED BY THE ASSESSEE IN FAVOUR OF THE BANK FOR RS.1,23,55,200/- SUPPORTS THE ASSESSEE S CLAIM. IN THE LIGHT OF THE EVIDENCE, WE AGREE WITH THE CIT(A) THAT THERE C AN BE NO PROPORTIONATE DISALLOWANCE OF THE INTEREST TO THE EXTENT OF THE A MOUNTS ADVANCED TO VIDEOCON CAYMAN LTD. ACCORDINGLY, THE DELETION OF THE DISALLOWANCE OF RS.5,19,985/- IS UPHELD. WE NOW TURN TO THE INTER CORPORATE DEPOSITS / LOANS . THE MAIN GROUND ON WHICH THE CIT(A) HAS DELETED THE PROPORTI ONATE INTEREST IS THAT THE ASSESSEE WAS IN RECEIPT OF INTEREST ON THE DEPO SITS DURING THE INITIAL PERIOD, BUT LATER THE DEPOSITS BECAME NON PERFORMIN G ASSETS AND THEREAFTER THE ASSESSEE DID NOT CHARGE ANY INTEREST. THE CIT( A) HAS FURTHER FOUND THAT THE ASSESSEE WAS RIGHT IN NOT CHARGING ANY INT EREST BECAUSE CHARGING OF INTEREST ON NON PERFORMING ASSETS WOULD BE CONTR ARY TO THE AS-9 ISSUED IN RESPECT OF RECOGNITION OF REVENUE. THE CIT(A) A LSO HELD THAT THE INTER CORPORATE DEPOSITS WERE GIVEN BY THE ASSESSEE IN TH E NORMAL COURSE OF ITS FINANCING BUSINESS AND THE INTEREST THEREON HAS BEE N ASSESSED TO TAX UNDER THE HEAD BUSINESS. THE OBJECTION OF THE DEPARTME NT IS THAT THIS IS A NEW CONTENTION ACCEPTED BY THE CIT(A) WITHOUT DUE VERIF ICATION. WE HAVE PERUSED THE REMAND REPORT DATED 08.03.2007 FILED BY THE ASSESSING OFFICER BEFORE THE CIT(A). IN PARAGRAPH XIII. OF THE SAID REPORT, THE ASSESSING OFFICER HAS STATED THAT THE CLAIM OF THE ASSESSEE T HAT IT IS CARRYING ON FINANCING ACTIVITY IS INCONSISTENT WITH ITS CONTENT ION THAT NO INTEREST WAS CHARGED ON THE INTER CORPORATE DEPOSITS / LOANS BEC AUSE THEY HAD BECOME NON PERFORMING ASSETS. IN PARAGRAPH XIV. THE ASSES SING OFFICER HAS DISPUTED THE ASSESSEES CLAIM AGAIN POINTING OUT TH AT EXCLUDING THE INTEREST ON THE ICDS GIVEN IN THE COURSE OF FINANCI NG BUSINESS OR OTHERWISE IS AGAINST THE ACCOUNTING PRINCIPLES AND ALSO THAT IF THE DEPOSITS ARE NOT ULTIMATELY RECOVERED, THEY COULD HAVE BEEN INCLUDE D IN THE CLAIM OF BAD DEBTS MADE BY THE ASSESSEE IN ITS ACCOUNTS AND THE RETURN FILED. THESE STATEMENTS MADE BY THE ASSESSING OFFICER IN THE REM AND REPORT SHOW THAT HE HAD NOT SERIOUSLY OBJECTED OR DISPUTED THE CLAIM OF THE ASSESSEE THAT THE INTEREST ON THE ICDS WAS CHARGED AND ASSESSED U NDER THE HEAD BUSINESS SINCE THE ASSESSEE WAS CARRYING ON THE B USINESS OF FINANCING. WE ARE THEREFORE UNABLE TO UPHOLD THE OBJECTION OF THE SENIOR DR BEFORE US THAT THIS IS A NEW ANGLE ADOPTED BY THE CIT(A) AND REQUIRES TO BE ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 10 EXAMINED AFRESH. WE THEREFORE UPHOLD THE FINDING O F THE CIT(A) THAT THE INTER CORPORATE DEPOSITS / LOANS WERE ADVANCED IN T HE COURSE OF THE FINANCING BUSINESS CARRIED ON BY THE ASSESSEE AND T HAT THE ASSESSEE WAS JUSTIFIED IN NOT CHARGING INTEREST WHEN THE DEPOSIT S OR LOANS THEMSELVES BECAME DOUBTFUL OF RECOVERY, WHICH CONDUCT IS IN CO NFORMITY WITH AS-9 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA REGARDING RECOGNITION OF REVENUES. WE THEREFORE UPHOLD THE D ECISION OF THE CIT(A) THAT THERE IS NO JUSTIFICATION FOR DISALLOWING THE PROPORTIONATE INTEREST OF RS.32,99,322/-. TURNING NOW TO THE ADVANCES RECOVERABLE IN CASH OR KIND, WE HAVE ALREADY NOTED THAT AFTER SETTING OUT THE RELEV ANT DETAILS IN THE ASSESSMENT ORDER IN PARAGRAPH 13, THE ASSESSING OFF ICER MERELY WORKED OUT THE INTEREST TO BE DISALLOWED AT RS.5,77,869/- WITHOUT FURNISHING ANY REASONS. BE THAT AS IT MAY, THE FACTS SHOW THAT TH E AMOUNT OF RS.18,13,80,000/- WAS ADVANCED TO FOUR DIFFERENT CO MPANIES AS SHARE APPLICATION MONIES. THREE OF THE COMPANIES WERE PR IVATE LIMITED COMPANIES. APPARENTLY, THE ASSESSING OFFICER THOUG HT THAT ADVANCING MONEY AS SHARE APPLICATION MONIES AMOUNTED TO INVES TMENT AND THUS DIVERSION OF BORROWED FUNDS. HE ALSO NOTED THAT TH E AMOUNTS SO ADVANCED WERE RECEIVED BACK BY THE ASSESSEE ON VARIOUS DATES IN THE ACCOUNTING YEAR ITSELF. THE AMOUNTS THUS REMAINED ADVANCED AS SHARE APPLICATION MONIES ONLY FOR SHORT PERIODS, FOR ABOUT TWO MONTHS AT THE MOST. THE CIT(A) HAS FOUND THAT THE INVESTMENTS WERE AUTHORIZ ED BY BOARD RESOLUTIONS AND THE INVESTMENT ACTIVITY WAS ALSO DO NE IN ACCORDANCE WITH THE OBJECTS STATED IN THE MEMORANDUM OF ASSOCIATION . THESE FINDINGS HAVE NOT BEEN CONTROVERTED BEFORE US. FURTHER THE CIT(A ) HAS HELD THAT THE ASSESSEE COULD NOT CHARGE ANY INTEREST ON THE AMOUN TS ADVANCED AS SHARE APPLICATION MONIES BECAUSE THERE IS NO PROVISION TO DO SO. IN ADDITION TO THESE FINDINGS THE CIT(A) HAS ALSO HELD THAT THE AS SESSEES OWN FUNDS WERE AVAILABLE TO COVER THE INVESTMENT. ULTIMATELY THE QUESTION IS WHETHER THE SHARE APPLICATION MONIES WERE DEFRAYED PURSUANT TO THE OBJECTS CLAUSE OF THE ASSESSEE COMPANY SO THAT IT CAN BE SAID THAT TH EY WERE ADVANCED FOR THE PURPOSE OF ASSESSEES BUSINESS. THE UTILIZATIO N OF THE FUNDS HAS BEEN FOUND TO BE IN ACCORDANCE WITH THE OBJECTS CLAUSE I N THE MEMORANDUM OF ASSOCIATION AND IF THAT IS SO THE INTEREST CANNOT B E DISALLOWED BECAUSE EVEN IF BORROWED FUNDS WERE USED FOR MAKING SHARE APPLIC ATION MONIES, THE SHARE APPLICATION MONIES HAVING BEEN PAID FOR THE P URPOSE OF THE ASSESSEES BUSINESS, THERE IS NO DIVERSION OF BORRO WED FUNDS TO JUSTIFY THE DISALLOWANCE OF THE INTEREST. THIS IN EFFECT IS TH E REASONING OF THE CIT(A) IN PARAGRAPH 8.21 OF HIS ORDER AND WE AGREE WITH THE S AME AND UPHOLD THE DELETION OF THE DISALLOWANCE OF RS.5,77,869/- BEING INTEREST PROPORTIONATE TO THE SHARE APPLICATION MONIES. WE NOW TURN BACK TO THE DISALLOWANCE OF THE INTERES T PROPORTIONATE TO THE ADVANCE OF RS.110.07 CRORES TO TPI ALLEGEDLY FOR THE PURCHASE OF A PROPERTY IN ROYAL PALMS, AAREY COLONY , BORIVALI. WE HAVE ALREADY HELD THAT THE AMOUNT WAS NOT ADVANCED FOR T HE PURPOSE OF ASSESSEES BUSINESS. THE QUESTION NOW WILL BE AS T O THE SOURCE OF THE FUNDS WHETHER THE ADVANCE CAME OUT OF THE OWN FUN DS OF THE ASSESSEE OR THE BORROWED FUNDS. IT MAY BE RECALLED THAT THE SU BMISSION OF THE ASSESSEE ON THIS ASPECT WAS THAT EVEN ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HAD THE BENEFIT OF OWN FUNDS OF RS.199 6.42 CRORES IN THE BEGINNING OF THE YEAR WHICH IS SUFFICIENT TO COVER THE ADVANCE TO TPI. IN THE COURSE OF THE ARGUMENTS ON BEHALF OF THE ASSESS EE WE WERE REFERRED TO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN CI T VS. RELIANCE UTILITIES AND POWER LTD. (2009) 313 ITR 340 (BOM). IN THIS C ASE, RELYING ON THE JUDGMENT OF THE SUPREME COURT IN EAST INDIA PHARMAC EUTICAL WORKS LTD. VS. CIT (1997) 224 ITR 627 (SC) AND THE JUDGMENT OF THE CALCUTTA HIGH ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 11 COURT IN WOOLCOMBERS OF INDIA LTD. VS. CIT (1982) 1 34 ITR 219 (CAL), THAT IF THERE WERE FUNDS AVAILABLE TO THE ASSESSEE BOTH INTEREST FREE AND OVERDRAFT AS WELL AS LOANS, THEN A PRESUMPTION WOUL D ARISE THAT THE INVESTMENTS NOT RELATING TO THE BUSINESS WOULD BE O UT OF THE INTEREST FREE FUNDS GENERATED OR AVAILABLE WITH THE COMPANY, PROV IDED SUCH INTEREST FREE FUNDS WERE SUFFICIENT TO MEET THE INVESTMENTS. IN THE PRESENT CASE, AS RIGHTLY POINTED OUT ON BEHALF OF THE ASSESSEE, THE ASSESSING OFFICER HIMSELF HAS STATED IN PARAGRAPH 9.3 OF THE ASSESSMENT ORDER AT PAGE 8 THEREOF, THAT OUT OF THE TOTAL FUNDS OF RS.4294.87 CRORES AV AILABLE TO THE ASSESSEE, ITS OWN FUNDS AMOUNT TO RS.1996.42 CRORES WHICH CON STITUTED 46.48% OF THE TOTAL CAPITAL. HE HAS ALSO HELD IN PARAGRAPH 9 .11 THAT THE FUNDS ARE MIXED, BUT HAS OBSERVED THAT THE ADVANCE COULD NOT HAVE COME OUT OF ASSESSEES OWN FUNDS AND INTEREST WOULD HAVE COME O UT OF THE MIX OF BORROWED AND OWN FUNDS IN EQUAL RATIO. THIS OBSERV ATION IS CONTRARY TO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT CITED SUP RA, WHERE IT HAS BEEN CLEARLY HELD THAT IN THE CASE OF MIXED FUNDS, THE P RESUMPTION IS THAT THE AMOUNTS ADVANCED FOR NON BUSINESS PURPOSES CAME OUT OF THE ASSESSEES OWN FUNDS, PROVIDED THE OWN FUNDS ARE SUFFICIENT TO COVER SUCH ADVANCES. RESPECTFULLY FOLLOWING THE SAID JUDGMENT, WE FIND T HAT THE OWN FUNDS OF RS.1996.42 CRORES WHICH WERE AVAILABLE TO THE ASSES SEE EVEN ACCORDING TO THE ASSESSING OFFICER ARE SUFFICIENT TO COVER THE A DVANCE OF RS.110.07 CRORES MADE TO TPI. IN THIS VIEW OF THE MATTER WE HOLD THAT EVEN THOUGH THE ADVANCE TO TPI WAS NOT FOR THE PURPOSE OF ASSES SEES BUSINESS, BUT SINCE THE ADVANCE MUST BE PRESUMED TO HAVE COME OUT OF THE ASSESSEES OWN FUNDS WHICH WERE MUCH MORE THAN THE ADVANCE, NO DISALLOWANCE OF THE PROPORTIONATE INTEREST CAN BE MADE. WE THUS AG REE WITH THE ULTIMATE CONCLUSION OF THE CIT(A) THAT THE INTEREST OF RS.4, 40,39,344/- PROPORTIONATE TO THE ADVANCE TO TPI CANNOT BE DISALLOWED. 13. AT THE TIME OF HEARING BEFORE US, THE LEARNED D EPARTMENTAL REPRESENTATIVE HAS NOT DISPUTED THAT THE MATERIAL F ACTS RELEVANT TO THIS ISSUE AS INVOLVED IN THE YEAR UNDER CONSIDERATION ARE SIMILA R TO THAT OF ASSESSMENT YEAR 2003-04. THE ONLY CONTENTION RAISED BY HIM IN THIS REGARD IS THAT IT IS NECESSARY TO ASCERTAIN FOR THE PURPOSE OF ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF INTEREST AS TO WHETHER THE ADVANCES GIVE N BY IT TO THE SISTER CONCERN HAVE BEEN UTILIZED BY THE SAID CONCERNS FOR BUSINE SS PURPOSES. HOWEVER, AS RIGHTLY SUBMITTED BY THE LEARNED COUNSEL FOR THE AS SESSEE, EVEN THE ASSESSING OFFICER HAS NOT DISPUTED SUCH UTILIZATION BY THE S ISTER CONCERNS FOR BUSINESS PURPOSES EITHER DURING THE COURSE OF ASSESSMENT PR OCEEDINGS OR DURING THE COURSE OF REMAND PROCEEDING S. WE, THEREFORE, FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04(SUPRA) AND RESPECTF ULLY FOLLOWING THE SAME, WE ITA NO. 4787/M/2008 M/S.VIDEOCON INTERNATIONAL LTD. 12 UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) DEL ETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OUT OF INTEREST EXPENDITUR E. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF MARCH, 2011. SD. SD. (R.V. EASWAR) (P.M. JAGTAP) PRESIDENT ACCOUNTANT MEMBER MUMBAI DATED THE 9 TH MARCH, 2011. KN COPY TO: 1. THE ASSESSEE 2. THE DCIT, CIRCLE 3(3), MUMBAI 3. THE CIT-3, MUMBAI 4. THE CIT(A)-XXXII, MUMBAI 5. THE DR F BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI