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TMI Blog2018 (5) TMI 1966X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT(A) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case the learned CIT(A) has erred both on facts and in law in confirming the disallowance of interest of Rs. 4,37,2701- u/s 36(1)(iii). 3. (i) On the facts and circumstances of the case the learned CIT(A) has erred- in making disallowance under section 36(1 )(iii), rejecting the contention of the assessee that the loans were given out of business expediency therefore no disallowance of interest can be made. (ii) That the learned CIT(A) has erred in rejecting the contention of the assessee, that in view of the interest expenditure claimed by the assessee having a direct nexus with the other loans directly related to the business of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record. 9. On the facts and circumstances of the case the learned CIT(A) has erred both on facts and in law in making the addition arbitrarily rejecting the explanation and evidences filed by the assessee in this regard." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer made addition of disallowance under section 14A of the Income-tax Act, 1961 (for short 'the Act') to the tune of Rs. 31,870/- and made further addition of Rs. 24,71,261/- under section 36(1)(iii) being the income from profits and gains from business or profession. 3. Assessee carried the matter by way of appeal before the ld. CIT (A) who has deleted the addition made u/s 14A and restricted the addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of gold by the assessee as recorded in the books of account in their tax audit report. It is also not in dispute that the books of account of the assessee have never been rejected nor disputed any transaction recorded in the books of account. It is also not in dispute that the ld. CIT (A) has enhanced the income of the assessee on the ground that the assessee has failed to record detailed address of persons/ purchaser to whom the gold was sold. 8. In the backdrop of the aforesaid facts and circumstances of the case, order passed by ld. Revenue authorities below, arguments advanced by ld. AR for the parties, the sole question arises for determination in this case is :- "as to whether cash sales of gold by the assessee is part of the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the appellant as to whether there was any requirement in law of recording the names of the purchasers of the bullion to whom the cash sales of gold and silver were made. The learned counsel for the revenue stated that there was no such requirement in law at the relevant time. Consequently, no adverse inference could have been drawn by the Assessing Officer on account of the fact that the assessee was not in a position to furnish the names of the persons to whom the cash sales of the bullion were made." 11. Coordinate Bench of the Tribunal in case cited as Kishore Jeram Bhai Khaniya, Prop. M/s. Poonam Enterprises, Mp-83 vs. ITO (supra) decided the identical issue in favour of the assessee by relying upon the decision rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Jindal Dyechem Industries Pvt. Ltd. (supra), the decision of the Hon'ble Bombay High Court in R.B. Jessaram Fetehcahnd (Sugar Dept.) vs. CIT, Bombay City-II (supra) and the decision of the Tribunal in case of Kishore Jeram Bhai Khaniya, Prop. M/s. Poonam Enterprises, Mp-83 vs. ITO (supra), it is apparently clear that the ld. CIT (A) has accepted the trading results and has never rejected the books of account which are duly audited and in para 5.4.2, CIT (A) has categorically mentioned that prima facie there is no dispute as regards recording of transaction in the books of account and quantitative details for the period 01.04.2011 to 31.03.2012 includes inward or outward transactions of gold of 10 Kgs. during the year under assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot attracted, the income has been enhanced by ld. CIT (A) apparently on the basis of surmises which is not sustainable in the eyes of law, hence following the decision rendered by Hon'ble High Courts and Tribunal in CIT-II vs. Jindal Dyechem Industries Pvt. Ltd. (supra), R.B. Jessaram Fetehcahnd (Sugar Dept.) vs. CIT, Bombay City-II (supra) and Kishore Jeram Bhai Khaniya, Prop. M/s. Poonam Enterprises, Mp-83 vs. ITO (supra), addition of Rs. 2,24,99,000/- made by ld. CIT (A) is ordered to be deleted. Consequently, grounds no.5, 6, 7, 8 & 9 are determined in favour of the assessee. 16. Resultantly, the appeal filed by the assessee is partly allowed. 17. In view of the fact that appeal bearing ITA No.5339/Del/2017 in which the present stay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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