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TMI Blog2016 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... II, Surat has erred in deleting the addition of Rs. 18,51,175/- made on account of disallowances of interest payment without appreciating the fact that the assessee failed to discharge the onus cast on him to prove the genuineness that the interest payment was not diversion of interest bearing funds to non interest bearing loans and advances. [2] On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing 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 Rs. 2,24,688/-. Assessee'scase was selected for scrutiny and assessment proceedings were carried out by Assessing Officer for framing the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the appellant has categorically established the nexus between interest free loans and funds advanced and interest free funds available with him. In the case of M/s. AksharInfo Services Pvt. Ltd, it has been proved by appellant that for giving interest free loan of Rs. 27,20,000/-, appellant was having closing balance of Rs. 55,61,278/-in his bank. Similarly, in the case of ChampaklalSopariwala, it has been submitted that for giving advance of Rs,50,00,000/- on 03.12.2008, appellant had received Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, ld. A.R. has filed a detailed paper book along with copies of letters submitted before the Assessing Officer during the time of assessment proceedings which were not adjudicated on merits. 5.1 Ld. A.R. also submitted that the total loans and advances which were stood given as on 31.03.2009 at Rs. 2,06,81,372/- were not new loans given during the year. Out of Rs. 2,06,81,372/-, fresh loans and advances given during the year was Rs. 1,18,70,000/- and Rs. 88,11,372/- were old loans which have been brought forward from previous year. Out of the old loan brought forward at Rs. 88,11,372/-, interest has been charged on Rs. 81,55,873/-. 5.2 Ld. A.R. has also given specific details for the new loans and advances of Rs. 1,18,70,000/- in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest free loans and advances. Had this deemed interest income been considered by the AO then the addition would have been scaled down from Rs. 18,51,175/- to Rs. 14,92,702/-. Further during the appellate proceedings before the CIT(A), he has also mentioned about the assessee's agreed addition of Rs. 3,58,473/- (wrongly typed as Rs. 3,50,473/-). Therefore, the amount mentioned in ground no.1 of the appeal by Reenue mentioned at Rs. 18,51,175/- should be corrected by the correct amount of Rs. 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 Rs. 14,92,702/-. The solitary issue which is to be adjudicated is that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/-, a sum of Rs. 91,50,000/- was given for real estate business and only a sum of Rs. 27,20,000/- was given as interest free loans and advances. The assessee has agreed for addition on interest of Rs. 1,30,254/- on the fresh loans of Rs. 27lacs given to M/s. Akshar Info Service (P) Ltd. calculated on the basis of days for which loans were given. Further, after reducing Rs. 1,18,70,000/- on the total loan advance of Rs. 2,06,81,372/-, the remaining amount comes to Rs. 88,11,372/- and out of this remaining amount of Rs. 88,11,372/-, assessee has already shown interest income of Rs. 10,40,040/- from old loan of Rs. 81,55,873/-. 6.1 Under these circumstances and from the above transactions, we are of the view that assessee has proved the ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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