IN THE ITAT PUNE BENCH ‘A’
Kirloskar Oil Engines Ltd.
V/s.
Deputy Commissioner of Income-tax
IT APPEAL NOS. 176 & 181 (PN.) OF 2004
[ASSESSMENT YEAR 1999-2000]
JUNE 27, 2012
ORDER
R.K. Panda, Accountant Member
These are cross appeals and are directed against the order dated 24-11-2003 of the CIT(A)-III, Pune relating to Assessment Year 1999-2000. For the sake of convenience, these were heard together and are being disposed of by this common order.
ITA No. 181/PN/2004 (By Assessee) :
2. Ground of appeal No. 1 by the assessee reads as under :
1. Disallowance out of interest claimed – Rs. 68,58,000/-
The learned CIT(A) erred on facts and in circumstances of the case, in upholding disallowance of interest expenses of Rs. 68.58 lacs (out of total disallowance of Rs. 281.69 lacs made by the AO). He should have appreciated the facts fully in proper perspective, and ought to have deleted the disallowance in full.
2.1 After hearing both the sides, we find the AO disallowed an amount of Rs. 2,81,69,558/- being diversion of interest bearing funds to sister concerns without charging any interest. In Appeal the learned CIT(A) following his order for assessment year 1998-99 restricted such disallowance to Rs. 68.58 lakhs. We find that identical issue had come up before the Tribunal in assessee’s own case and the issue was restored to the file of the AO vide ITA No. 45/PN/2001 for assessment year 1997-98 and ITA No. 257/PN/2003 for assessment year 1998-99. We find the relevant portion of the order of the Tribunal in ITA No. 257/PN/2003 for assessment year 1998-99 reads as under :
