Pavan Kumar Gadale ORDER
M. Balaganesh, Member (A)
1. This appeal in ITA No. 1094/Mum/2019 for A.Y. 2013-14 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-13, Mumbai in appeal No. CIT(A)-13/ACIT-7(1)(1)/03/2017-18 dated 29/10/2018 (ld. CIT(A) in short) against the order of assessment passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 16/03/2016 by the ld. Asst. Commissioner of Income Tax, Circle 7(1)(1), Mumbai (hereinafter referred to as ld. AO).
2. At the outset, the ground No. 2 raised by the assessee was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as the statement made from the Bar. Accordingly, the ground No. 2 raised by the assessee is hereby dismissed as not pressed.
3. The ground No. 3 raised by the assessee is general in nature and does not require any specific adjudication.
4. The ground No. 1 raised by the assessee is with regard to challenging the disallowance of proportionate interest u/s. 36(1)(iii) of the Act.
4.1. We have heard rival submissions and perused the materials available on record. We find that assessee is a domestic company engaged in the business of giving loans and advances for general financing, which fact is not in dispute. The return of income for the A.Y. 2013-14 was filed by the assessee company on 30/09/2013 declaring total income of Rs. 1,50,32,287/-. It is not in dispute that assessee has borrowed term loan from HDFC bank during F.Y. 2010-11 relevant to A.Y. 2011-12 and has advanced loan/interoperate deposit (ICD) to M/s. Jogindra Exports Ltd., and M/s. Anchor Leasing Pvt. Ltd. during the same year. These advances were made by the assessee in its ordinary course of business of financing. The assessee had received interest income on advances given by it and had interest paid on borrowings made by it as under:-
4.2. The lending made by assessee to aforesaid two parties in its ordinary course of business of financing and resultant interest income derived thereon, which was sought to be set off against the interest paid on loan, was accepted to be income from business by the ld. AO in the earlier years i.e. A.Yrs. 2011-12 and A.Y. 2012-13. When this fact was confronted to ld. DR, he stated that the year under consideration was the first year of scrutiny assessment for the assessee and that assessments for A.Yrs 2011-12 and 2012-13 were completed u/s. 143(1) of the Act and not u/s. 143(3) of the Act. For this argument, the ld. AR stated that the assessments for A.Y. 2011-12 and 2012-13 were not subsequently subjected to any revision proceedings by the ld. Pr. Commissioner of Income Tax u/s. 263 of the Act or subjected to any re-opening proceedings by the ld. AO u/s. 147 of the Act. In view of this fact, we hold that it could be safely concluded that the transactions of lending to M/s. Jogindra Exports Ltd., and M/s. Anchor Leasing Pvt. Ltd. and interest derived thereon from them by the assessee company in the ordinary course of its business of financing, stood accepted as business income by the Revenue in the past. Hence, there is no need for the ld. AO to take a divergent stand when there is no change in facts of the case and when there is no fresh development that had cropped up during the year under consideration. Reliance in this regard is placed on the decision of Hon'ble Supreme Court in the case of Radhasoami Satsang reported in MANU/SC/0061/1992 : 193 ITR 321.
4.3. During the year under cons........