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DCIT (LTU) NBBC Plaza, Pushp Vihar, Sector-III, New Delhi-17 Vs. M/s Hero Motors Ltd. 601, International Trade Tower, Nehru Place New Delhi-110014
December, 03rd 2014
                DELHI BENCH: `C' NEW DELHI

                             I.T.A .No.-1608/Del/2013
                            (Assessment Year-2006-07)

DCIT (LTU)                           Vs.          M/s Hero Motors Ltd.
NBBC Plaza, Pushp Vihar, Sector-III,              601, International Trade
New Delhi-17                                      Tower, Nehru Place
                                                  New Delhi-110014
(APPELLANT)                                       (RESPONDENT)

                  Revenue by:-Sh. Satpal Singh, Sr. DR.
                  Assessee by:-Sh. Sumit Bansal, CA



      This appeal has been preferred by the Revenue against the order of the

CIT (Appeals)- X New Delhi dated 16/11/2012 in appeal No. 319/09-10 for the

Assessment Year 2006-07.

2.    The sole ground raised by the Revenue in this appeal reads as under:

         "1. On the facts and the circumstances of the case and in law,
              the Ld. CIT(Appeals) has erred in deleting the addition of
              Rs.29,47,897/- made on account of disallowance of interest
              expenditure being incurred for non business purpose."

3.    Apropos aforementioned ground of the Revenue, the ld. Departmental

Representative (DR) submitted that the ld. CIT(A) has grossly erred in deleting

the addition of Rs.29,47,897/- made by the AO on account of disallowance of

interest expenditure being incurred for non-business purpose. The ld. DR

supported the assessment order and submitted that the impugned order may be

set aside by restoring that of the AO.

4.    Replying to the above the ld. counsel for the assessee supported copies of

the order of ITAT `C' Bench in assessee's own case ITA No.1847/Del/2012 for

AY 2007-08 dated 06.07.2012 and ITA No. 2919/Del/2012 & 2920/Del/2012

for AY 2005-06 and 2008-09 respectively vide dated 17.5.2013 and submitted

that the issue has been decided in favour of the assessee and against the

Revenue, by dismissing the above appeal of the Revenue in assessee's own case

for earlier and subsequent assessment years.

5.    On careful consideration of above submissions. At the outset, we observe

that this case is pertaining to AY 2006-07 and from the orders of the Tribunal

for AY 2007-08 (Supra) and for AY 2005-06 and 2008-09 (Supra), we observed

that the issue has been decided in favour of the assessee and against the

Revenue. The relevant operative part of the order of the Tribunal for AY 2007-

08, which was followed by the Tribunal in the subsequent order vide dated

17.5.2013 (Supra). We observe that the Tribunal has upheld the finding of the

CIT(A) pointing out specific circumstances as to why no disallowance deserve

to be made in the case of assessee. The relevant operative para of the order of

the Tribunal vide dated 06.07.2012 (Supra) reads as under:

         "6. With        the     assistance        of   Learned    Departmental
              Representative, we have gone through the record carefully.
              On perusal of the findings of the Learned CIT(Appeals),
              extracted Supra, we are convinced that no case is made out
              for disallowance of interest expenses. Learned first
              appellate authority has recorded the findings of fact
              pointing     out    specific       circumstance as   to   why   no
              disallowance deserves to be made in this case. According to
              the Learned CIT(Appeals), there is no nexus between the
              borrowings made by the assessee company and advance
              given to M/s. Hero Global Designs Ltd. similarly, the
              outstanding sums extracted supra, represents the sales
              consideration of assets, technical know-how, rent etc. which
              are not the advance given by the assessee out of the
              borrowed funds. In such circumstances, no disallowance
              can be made. Learned first appellate authority has
              appreciated the controversy in right perspective and no
              interference is called for in her order."

6.    The ld. DR fairly accepted that the issue has been decided in favour of the

assessee and appeals of the Revenue have been dismissed for earlier and

subsequent assessment year.

7.    In view of above, we are inclined to hold that the issue is squarely

covered in favour of the assessee by the above orders of the Tribunal. Hence,

the present appeal of the Revenue being devoid of merits, deserves to be

dismissed and be dismissed the same. Accordingly sole ground of the Revenue

as well as appeal of the Revenue is dismissed.

     Order pronounced in the open Court on 01/12/2014.

     Sd/-                                                 Sd/-
  (R. S. SYAL)                                       (C. M. GARG)
ACCOUNTANT MEMBER                                  JUDICIAL MEMBER

Dated: 01/12/2014

Copy forwarded to:

1.   Appellant
2.   Respondent
3.   CIT
4.   CIT(Appeals)
5.   DR: ITAT

                                                 ASSISTANT REGISTRAR
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