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TMI Blog2013 (12) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before CIT(A) - Decided against Revenue. Interest free loan given to family members - Held that:- The Tribunal recorded the findings that the assessee in his individual account was having sufficient capital - If he had given the amount as interest free loan to his family members, that by itself could not be put to doubt and on which the interest was disallowed under Section 36 (1) (iii) of the Act – Decided against Revenue. - Income Tax Appeal No. - 333 of 2013 - - - Dated:- 26-11-2013 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash Kesarwani,JJ. For the Appellant : Shambhu Chopra ORDER 1. We have heard Shri Shambhu Chopra for the revenue. Shri Vishwajeet appears for the respondent-assessee. 2. This Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the assessment proceedings. 4. Whether the Hon'ble ITAT was legally correct in deleting the addition on the strength of a non-substantiated document called MOU without affording the revenue an opportunity to test the veracity of such evidence produced for the first time before the Hon'ble Tribunal. 5. Whether the Hon'ble ITAT was legally correct in deleting the addition of Rs.1,34,794/- made by AO u/s 36 (1) (iii) of the Act ignoring the fact that the assessee was compelled to resort to borrowing on interest due to diversion of his own funds for purpose (s) other than his own business." 4. On the first to four questions, we find that the Tribunal, being the final court of fact, has recorded findings accepting the explanation g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was that the business transaction was done with the assessee in this account and a sum of Rs.1,00,00,000/- was received to the assessee against transaction of sale of cold storage of the assessee. The assessee was having cold storage at 91, Mauza Baroli Aheer, Shamsabad Road, Agra known as Bhole Baba Ice Factory Cold Storage. The assessee has furnished the agreement dated 07.01.2008 between the Director of the said cold storage and Director, Bhole Baba Buildcon (P) Ltd. Copy of the said agreement has been placed at Page Nos. 2 3 of the assessee's paper book. The assessee has also furnished the copy of resolution of board meeting dated 05.01.2008. The abstract of the board resolution is reproduced as below:- "RESOLVED THAT, board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case under consideration as stated above, the assessee has demonstrated that the amount was received for the purpose of commercial transaction. As regards, the second objection, which is agreement and MOU as after thought, in this regard, we are of the view that these documents are already on record and the Revenue did not point out any contrary material to these documents. Therefore, merely by stating that this is after thought, such argument of the revenue without supporting material/evidence is not sustainable, therefore, the same is rejected. 21. In the light of above discussions, we find that the amount of Rs.1,00,00,000/- received to the assessee is on account of commercial transaction, therefore, the Section 2 (22) (e) is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 as raised arise for consideration of the Court. 10. On question no.5 we find that the Tribunal recorded the findings that the assessee in his individual account was having sufficient capital of Rs.1,78,85,290/-. Even if he had given the amount as interest free loan of Rs.1,73,38,986/- to his family members, that by itself could not be put to doubt and on which the interest was disallowed under Section 36 (1) (iii) of the Act. 11. The AO added Rs.1,78,85,290/- as interest on the ground that the amount was not advanced by way of any business experience. The Tribunal, however, held that where the amount was not advanced from the business, but was the capital of the assessee, he could have advance to his family members. 12. The quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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