9911796707
TMI Blog2015 (11) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... ther purchase of ₹ 2,29,890/-, the assessee had made payment of ₹ 2,27,590/- retaining outstanding balance of ₹ 2,67,359/-. It was also held not to be for business purposes as the assessee had failed to explain why the purchase made during the year was not adjusted out of the said amount. In the light of the concurrent findings of fact recorded by the Assessing Officer, CIT(A) and the Tribunal, the assessee cannot claim any benefit by urging that no addition under similar circumstances was made by the then Assessing Officer for the assessment year 2005-06, as each year is independent and such addition depends upon facts and circumstances existing at the relevant time. - Decided against assessee. - ITA No. 310 of 2010 (O&M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87,22,254/- on 30.11.2006. The case was processed under Section 143(1) of the Act and on 22.10.2007, notice was issued to the appellant under section 143(2) of the Act. The appellant appeared before the Assessing Officer and filed reply alongwith documents. The Assessing Officer observed that the appellant had given interest free advances to the following concerns:- 1. M/s Chirag Spinnng Mills ₹ 15,00,000/- 2. M/s Dina Nath and Sons ₹ 2,67,359/- The advances were made for commercial expediency as the appellant had to buy the raw material as per particular specifications that raw material was not readily available in the market to maintain its position in the competitive market. There were opening balances which st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vances given to M/s Chirag spinning Mills Limited, Panipat and M/s Dina Nath Sons which was also without charging any interest from them. 5. On the other hand, learned counsel for the revenue supported the order passed by the Assessing Officer which was affirmed by the CIT(A) and upheld by the Tribunal. 6. During the assessment proceedings, it was found that the assessee company had given interest free advances to M/s Chirag spinning Mills and M/s Dina Nath and Sons. No interest had been charged from the said concerns on the advances made to them. The assessee was asked to explain why the proportionate interest should not be disallowed out of the bank interest claimed on account of interest free advance as per the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the case of the assessee, hence the claim that the advance was given for yarn purchase is merely an after thought and therefore, it has not resulted in any business transaction also. Not even any communication/correspondence suggesting that it was a advance for business purposes has been filed, therefore, it is clearly established that the advance was not for business purposes. Similarly, in the case of Dina Nath Sons, the opening balance of ₹ 2,69,659/- was existing and a purchase of only ₹ 2,29,890/- was made against which another payment of ₹ 2,27,590/- was made and therefore balance of ₹ 2,67,359/- remained outstanding which is almost the same amount as was the opening balance, whereas the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the submissions and perused the records. As regards the advance to M/s Chirag Spinning Mills, the advance of ₹ 15 lacs is appearing as opening balance. Learned counsel for the assessee was not in a position to provide any document to show that the same advance was actually trade advance in nature. As regards the present status of the advance, learned counsel claimed that the same is still outstanding and some dispute has risen in this regard. 7.1 As regards the advance to Dina Nath and Sons, we find that an amount almost equal to opening balance has remained outstanding at the end of the year. In this connection, also no evidence has been produced that advance was meant for the business purposes. As regards the present status ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
