9911796707
TMI Blog2016 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... nds. Further, most of the interest free loans /advances, were for the business purposes. Out of total loans and advances as on 31.03.2009 shown at ₹ 2,06,81,372/- only a sum of ₹ 1,18,70,000/- was fresh loan given during the year and further out of ₹ 1,18,70,000/-, a sum of ₹ 91,50,000/- was given for real estate business and only a sum of ₹ 27,20,000/- was given as interest free loans and advances. The assessee has agreed for addition on interest of ₹ 1,30,254/- on the fresh loans of ₹ 27lacs given to M/s. Akshar Info Service (P) Ltd. calculated on the basis of days for which loans were given. Further, after reducing ₹ 1,18,70,000/- on the total loan advance of ₹ 2,06,81,372/-, the rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer. 3. Briefly stated facts are that the assessee filed its return of income for A.Y. 2009-10 on 29.09.2009 declaring total income at ₹ 2,24,688/-. Assessee scase was selected for scrutiny and assessment proceedings were carried out by Assessing Officer for framing the assessment u/s.143(3) of the IT Act (hereinafter referred as the Act ). During course of assessment proceedings, Assessing Officer noticed that in the balance sheet of the assessee loans and advances stood given at ₹ 2,06,81,372/- as on 31.03.2009. Assessing Officer asked the assessee to furnish item wise copies of loans and advances accounts given to various parties along with reason for not charging of interest from these parties. In response, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that for giving advance of Rs,50,00,000/- on 03.12.2008, appellant had received ₹ 75,00,000/- from sale of shares on the same date. In the same way, in other cases also, as reproduced in submissions, appellant has established that he was having sufficient interest free funds for giving interest free loans and advances to different parties.The claim of appellant is supported by documentary evidence in form of bank statements wherein the relevant entries are reflected. 5.1 In view of above facts, it is clear that the disallowance made by AO is wrong and without any basis. The appellant has successfully established that interest free loans and advances have been given by him out of interest free funds available; therefore, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and advances given during the year was ₹ 1,18,70,000/- and ₹ 88,11,372/- were old loans which have been brought forward from previous year. Out of the old loan brought forward at ₹ 88,11,372/-, interest has been charged on ₹ 81,55,873/-. 5.2 Ld. A.R. has also given specific details for the new loans and advances of ₹ 1,18,70,000/- in his letter dated 09.12.2011 at page nos. 25 to 27 in the paper book filed on 16.10.2015. These details support the claim of the assessee that he was having sufficient interest free funds, which were thereafter given as interest free loans and advances. Ld. A.R. further submitted that out of fresh loans given during the year under appeal at ₹ 1,18,70,000/-, loans and adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as ₹ 3,50,473/-). Therefore, the amount mentioned in ground no.1 of the appeal by Reenue mentioned at ₹ 18,51,175/- should be corrected by the correct amount of ₹ 14,92,702/-. The ld. DR has accepted the same and accordingly, the first ground of appeal of Revenue shall be against the CIT(A) s finding who has erred in deleting the addition of ₹ 14,92,702/-. The solitary issue which is to be adjudicated is that whether the assessee has utilized the available funds subject to interest against the interest free loans and advances. Looking to the audited financial statement, it reflects that assessee has debit capital balance of ₹ 5,93,01,244/- which the ld. D.R. has referred to support that assessee was having no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service (P) Ltd. calculated on the basis of days for which loans were given. Further, after reducing ₹ 1,18,70,000/- on the total loan advance of ₹ 2,06,81,372/-, the remaining amount comes to ₹ 88,11,372/- and out of this remaining amount of ₹ 88,11,372/-, assessee has already shown interest income of ₹ 10,40,040/- from old loan of ₹ 81,55,873/-. 6.1 Under these circumstances and from the above transactions, we are of the view that assessee has proved the genuineness of interest payment and also proved that there was no diversion of interest bearing fund to non interest bearing loans and advances. 7. Accordingly,the appeal of Revenue is dismissed.. This Order pronounced in open Court on 5/11/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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