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TMI Blog2013 (5) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... aid on the loans and advances disallowed - Held that:- As from the figures of the opening and closing capital of the assessee it is evident that assessee has sufficient own funds to cover the interest free loans / advances of Rs. 42,52,300/-. As AO has not been able to dispute the assessee's submission that assessee had adequate own funds out of which interest free loans and advances no disallowance is called for. Similarly, again on similar facts in A.Y. 2007-08 CIT(A) deleted the similar additions by the AO and the decision of CIT(A) was not challenged by the Department in higher forums. In favour of assessee. - ITA No. 4026/Del/2011 - - - Dated:- 20-5-2013 - Shri Shamim Yahya And Shri C. M. Garg,JJ. For the Petitioner : Sh. Anoop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oodgrains. The proportionate direct expenses and gross profit was allocated to the monthly purchase. From this chart it was noted by the Assessing Officer that the assessee had negative stock of Rs. 49,68,844/- in the month of February, 2008. On enquiry in this regard assessee responded that assessee was not having any negative stock in the month of February, 2008 and it was submitted that the same may be verified from the books produced by the assessee. Assessing Officer noted that assessee has produced the books of accounts, but no stock register was produced. He held that on these facts it is presumed that the assessee made out of the books purchase and thereby resulting into the negative stock, closing stock in the month of February, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales or any negative stock as mentioned in the order of the Assessing Officer. Hence, the Ld. Commissioner of Income Tax (A) deleted the addition made by the Assessing Officer. 5. Against the above order the Revenue is in appeal before us. 6. Ld. Departmental Representative relied upon the order of the Assessing Officer. He further referred to Paper Book Page no. 22 submitted by the assessee giving the quantitative details of stock. He claimed that this was not submitted before the Assessing Officer and submitted for the first time before the Ld. Commissioner of Income Tax (A). Hence, he submitted that the issue may be remitted to the file of the Assessing Officer to consider the same, in light of these additional submissions made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the Assessing Officer. Hence, the ld. Counsel of the assessee pleaded that the order of the Ld. Commissioner of Income Tax (A) be affirmed. 8. We have carefully considered the submissions and perused the records. We find that the assessee has maintained proper books of accounts, no defect has been pointed out in the books of accounts, the quantitative details of stock were duly certified by the Auditors. Assessing Officer has not been able to make the case of inflated purchases or unaccounted sales, purchase, sale gross profit net profits amount remained the same. The quantitative details as submitted in Paper Book Page No. 22 duly explained that there was no negative stock in any of the month. We agree with the submission of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of his capital invested in the business." 9.1 However, the Assessing Officer was not satisfied. He computed the disallowance on proportionate interest expense as under:- Interest free non business advances Interest expenditure X _____________________________________ Total interest bearing 4252300 20245961 X __________________ = Rs. 63,638.93 135304089 9.2 From the order of the Assessing Officer and the submissions of the assessee, the Ld. Commissioner of Income Tax (A) noted the following facts :- "The capital account of the assessee shows the opening balance of Rs.2,68,58,924/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax (A) further observed that it is also not disputed that interest payment is allowable as business expenditure u/s. 36(1)(iii). Ld. Commissioner of Income Tax (A) held that Assessing Officer was not justified to disallow the interest free payments and accordingly, he disallowed the same. 10. Against the above order the Revenue is in appeal before us. 11. We have heard the rival contentions in light of the material produced and precedent relied upon. Ld. Departmental Representative relied upon the orders of the Assessing Officer. Ld. Counsel of the assessee on the other hand submitted that Assessing Officer has wrongly arrived the figure of disallowance out of interest. He submitted that the assessee has sufficient own ..... X X X X Extracts X X X X X X X X Extracts X X X X
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