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TMI Blog2013 (9) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... proceed to dispose of all these appeals by this common order for the sake of convenience. The amounts of disallowances in the respective assessment years are as under: Asstt. Year Amount (Rs.) 1999-2000 Rs.60,74,672/- 2002-2003 Rs.7,67,492/- 2003-2004 Rs.6,51,030/- 2004-2005 Rs.6,41,886/- 3. At the outset, it was pointed out by the learned counsel that the issue under consideration is squarely covered by the following decisions of the ITAT: i) ITA No.3748/Ahd/2007, ACIT Vs. Patel Sombhai Manganbhai & Co., order dated 30-4-2010; ii) ITA No.737/ahd/2008, ACIT Vs. Patel Natverlal Chinubhai & Co., dated 3-9-2010; iii) ITA No.4296/Ahd/2007, DCIT Vs. Patel Sombhai Maganlal & Co. dated 18-9-2009; iv) ITA No.842/Ahd/1984, Patel Somb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore stated that the order of the CIT(A) may be reversed and that of the AO be restored. Or in alternative, the matter may be set aside to the file of the AO for separate determination of the profit/loss from legal/illegal business. 5. The learned counsel for the assessee submitted that the assessee is carrying on the business of Angadia since past several years and it is only one integrated business by which the assessee transfers goods, valuables, posts, cash etc. of its clients from one place to another place. The AO himself has never held any part of the business to be illegal business. That no action is ever taken against him for carrying on any illegal business by the RBI or any other Central Government or the State Government auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. DR is based upon various presumption. His first presumption is that part of business is illegal business and part is legal business. He further presumes that there would be loss from illegal business and profit from legal business, which cannot be set off against each other. However, fact on record remains that there is only one business of the assessee, part of which is not held to be illegal either by IT department or by any other government agency. Considering the totality of the above facts, in our opinion, the contentions of the learned DR that part of the business by the assessee is an illegal business and there should be separate working of the profit of the legal/illegal, cannot be accepted. 7. Now we come to the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness required it to possess cash balance of sufficient amount of all the material time as the making of timely payment was the essence of business transaction of the assessee. We find that it is not the case of the revenue that the borrowed funds were utilised by the assessee for any other purposes than its business. The assessee may be imprudent in holding large amount of cash but when the case was possessed for business purposes it would constitute business asset of the assessee and the borrowings connected therewith had to be held as for business purposes. We therefore, do not find any error in the order of the ld. CIT(A) in deleting the disallowance of interest of expenditure. Therefore, this ground of appeal of Revenue is dismissed." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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