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TMI Blog2019 (8) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the Ld. Assessing Officer in disallowing a sum of Rs. 15,44,043/- out of interest account by resort to provisions of Section 57(iii). 2. That he was further not justified to arbitrarily uphold the action of the Ld. Assessing Officer in disallowing a sum of Rs. 2,01,874/- out of car expenses, depreciation, telephone and travelling expenses on account of estimated personal use thereof in addition to the disallowance already made by the appellant at Rs. 1,74,371/-. 3. Vide Ground No. 1 the grievance of the assessee relates to the confirmation of disallowance of Rs. 15,44,043/- out of interest account made by the A.O. 4. Facts related to this issue in brief are that the assessee filed his return of income on 19/09/2013 declaring an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of allowability of expenses under section 57 of the Act. The assessee submitted that no fresh loans had been raised during the year rather the loans had been squared up for which the interest was being paid in the past. The assessee filed the reply to the A.O. as under: "Your Honour asked the assessee to justify the claim of interest paid u/s 57 of the act, against interest income, a reply to the same has already been submitted during the course of assessment proceedings on 15.03.2016. Further, it is submitted that the assessee is maintaining books of account both in respect of transaction of his proprietary concerns namely M/s Shakti International and also transactions in his individual capacity. The borrowing in which interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under: This is in continuation to earlier submissions filed on 23.10.2018 against an order under Section 143(3) of the Income-Tax Act, 1961 in the case of Sh. Dharam Pal Aggarwal (herein after referred to as "the appellant") for the above captioned assessment year. At the outset, it is also respectfully submitted that, from the perusal of a chart enclosed, the amount of interest-free funds available with the appellant on the dates of advance more than theamount of interest-free advances, the extract of which is tabulated as below: Date of Advance Interest-Free Funds [ Capital + Interest-Free Loans Received) Interest-Free Loans Given 12.04.2010 7,64, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Mills Limited from Australia. In turn, the appellant earned commission on such orders from M/s Bansal Spinning Mills Limited amounting Rs. 54,51,451/-. However, in order to safeguard the interest of its client i.e. owing to quality specifications in products, the appellant offered them security in the form of advance to directors of M/s Bansal Spinning Mills Limited i.e. Mr. S.P. Bansal and Mr. Sanjay Bansal, so that M/s Bansal Spinning Mills Limited could securely make payments against import purchases, even if M/s Bansal Spinning Mills Limited encountered quality related issues. If such a security was not given to M/s Bansal Spinning Mills Limited or any other client, then the appellant would not able to do its Business successfully i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Vs. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) * Smt. Virmati Ramakrishan Vs. CIT 131ITR 659 (Guj. HC) 8. Now the assessee is in appeal. 9. Ld. Counsel for the Assessee reiterated the submissions made before the authorities below and further submitted that the similar interest paid on the loans was disallowed by the A.O. in the preceding year i.e; 2012-13, however the same was deleted when the matter was taken before the ITAT in ITA No. 315/Chd/2017, vide order dt. 22/04/2019 and that in this year the assessee reduced the interest from the interest income earned under section 57 of the Act. It was submitted that interest bearing loans were raised by the Assessee for the business purposes and had been used for the purposes of earnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view the observations given in the aforesaid order, in accordance with law. 12. Vide Ground No. 2 the grievance of the assessee relates to sustenance of disallowance of Rs. 2,01,874/- out of car expenses, depreciation, telephone and travelling expenses when the assessee himself had disallowed a sum of Rs. 1,74,371/- out of the above said expenses. 13. The facts related to this issue in brief are that the A.O. during the course of assessment proceedings noticed that the expenses incurred by the assessee were mixed in nature, he disallowed 1/5th of the expenses incurred by the assessee on Telephone, Car Repair, Car Insurance, Car Expenses and Depreciation as per following details: Sr. No. Particulars Amount 1/5th addition 1 Te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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