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TMI Blog2019 (9) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... st on the related party loans - We find that the facts and the figures associated with the issue have not been properly examined by the lower authorities - this issue is remitted back to the AO for a fresh examination. The assessee shall place all the material in support of its contention before the AO and shall comply with his requirements in accordance with the law. The AO shall after affording due opportunity to the assessee shall pass an appropriate order. The corresponding grounds of appeal are treated as allowed for statistical purpose. - I.T.A. Nos . 1316 & 1317/CHNY/2019 - - - Dated:- 31-7-2019 - Shri Duvvuru Rl Reddy, Judicial Member And Shri S. Jayaraman, Accountant Member For the Appellant : Shri S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no extraneous reasons preventing the assessee in registering the asset in its name and it has not made any efforts to change the registration in its name. Since the registered and beneficial ownership of the car has not conclusively been proven by the assessee, he refused to allow them. Further, the AO found that the assessee has advanced loans to the related parties. On enquiry about the nature of transaction, the assessee could not offer reasonable explanation. Since the assessee borrowed funds from banks at the interest rate of 10.76% during the financial year, the AO disallowed proportionate interest on the loans to the related parties and completed the assessment. 2.1 In the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other vehicles, other than the high valued BMW car, and accounted them in its books of account, the Ld.AR replied positively. Was there any legal or procedural impediments for the assessee in acquiring the high valued car in its name, the Ld.AR replied that there is no such legal or procedural impediments. Whether the company passed any resolution in connection with the acquisition of high valued car and also on the Director s entitlement etc., the Ld.AR did not answer. 5.1. With regard to the interest disallowance, the Ld.AR submitted that the Ld.CIT(A) failed to note that the assessee was having adequate interest free funds and the AO did not establish the direct nexus between the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. Further, he held that the assessee is in the business of manufacture and sale of beedi and considering the line of business, the high valued BMW car is not required wholly and exclusively for the business of the assessee. While making TDS on the salary payment to the Director, this amount has not been considered as perquisite. Therefore, the ld CIT(A) held , inter alia, that the assessee purposefully had taken over the liability to finance the cost of the car and incurred the expenses relating to running and maintenance of the car. Such liability of ₹ 33,53,821/- has led to an under assessment of income to that extent. Therefore, the assessee erred in claiming the depreciation, interest and maintenan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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