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TMI Blog2017 (12) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the assessee has availed the cash credit facility as well as overdraft facility from ICICI Bank on which interest of ₹ 8,24,998/- was paid during the year under consideration however, neither the Assessing Officer nor the ld. CIT(A) has verified this fact that when the assessee is having its own sufficient funds to give advance to the sister concern then without establishing a direct nexus between the borrowed fund and advance no disallowance on account of interest is called for. It is not in dispute that the assessee’s own fund is more sufficient to met the requirement of advance to sister concern. If the assessee’s capital and profit during the year is taken into consideration the same is more than the loan given to the sister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disallowance of ₹ 1,53,469/- on account of interest on the loan of funds given to the sister concern. Hence the disallowance so made by the AO and confirmed by the CIT(A) is being absolutely, contrary to the provisions of law and facts of the case and not in conformity with the law, hence the same may kindly be deleted in full. 4. ₹ 7,518/-: The ld CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of ₹ 7,518/- on account of commission income due to difference in 26AS and shown by the assessee. Hence the disallowance so made by the AO and confirmed by the CIT(A) is being absolutely, contrary to the provisions of law and facts of the case and not in conformity with the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are being maintained by the assessee in this regard though the expenses incurred are in cash payment. Accordingly, the AO asked the assessee as to why these expenses should not be disallowed. The Assessing Officer further observed that the assessee has not submitted any clarification to substantiate his claim and accordingly the AO made disallowance of ₹ 90,000/-. On appeal the ld. CIT(A) deleted the disallowance made by the AO in respect of the expenses on account of insurance, staff welfare, salary expenses and Godown rent etc. however, the ld. CIT(A) has held that the personal element in respect of vehicle expenses cannot be ruled out and accordingly restricted disallowance to 10% of vehicle expenses amounting to ₹ 14,054/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital and ₹ 3,20,000/- interest free loans and balance is current liability as on 31.03.2011. The ld. CIT(A) has not accepted this contention of the assessee and given a finding that the interest bearing funds from overdraft account with ICICI Bank have been utilized by the assessee for giving interest free advance to the sister concern. Therefore, the interest paid on the withdrawal from ICICI Bank to the extent of funds used for advancing the interest free advance would be expenditure not for business purpose. Accordingly, the ld. CIT(A) has upheld the disallowance made by the AO on this account. 6. Before the Tribunal the ld. AR of the assessee has submitted that the authorities below have ignored the fact that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that when the assessee is having its own sufficient funds to give advance to the sister concern then without establishing a direct nexus between the borrowed fund and advance no disallowance on account of interest is called for. It is not in dispute that the assessee s own fund is more sufficient to met the requirement of advance to sister concern. If the assessee s capital and profit during the year is taken into consideration the same is more than the loan given to the sister concern. Therefore, having regard to the fact that the assessee s own capital and profit during the year amounting more than ₹ 25,00,000/- then, a presumption can be raised that the advance given the assessee of ₹ 5,61,000/- is from its own fund and n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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