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TMI Blog2020 (6) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... inable. Thus, the order of CIT(A) in upholding the view of AO in invoking the section 17(2) r.w.r. 3(7)(i) is not warranted. Thus, the order of CIT(A) is set aside and ground No. 1 raised by the assessee is allowed. Addition on account of capital gains - ingenuine transaction - HELD THAT:- Transaction between Ashok Raghunath Mane and Shri Narendra Bhimsen Agarwal as ingenuine, it was an attempt by the Ashok Raghunath Mane to divert profit to Agarwal and upheld the addition made and confirmed by the AO and CIT(A) therein in the hands of Ashok Raghunath Mane. In order to come to such conclusion this Tribunal examined the Income Tax Return filed by the Agarwal brothers for the year under consideration therein, wherein it was found the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the Income Tax Rules in the facts and circumstances of the case. 4. Heard both parties and perused the materials available on record. According to the AO the assessee is a director employee of Essen Product India Ltd. (hereinafter referred to as EPIL ) and also a proprietor of the firm M/s. S N Enterprises, which is engaged in the business of trading of consumer products. On examination of details filed by the assessee, the AO found that the assessee stated to have received huge interest free advances from EPIL and repaid the same during the year itself. The said advances are not given or taken during the course of normal business and the assessee could not discharge his onus to prove the transactions are in the nature of bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest as per rate charged by the Stage Bank of India. The contention of ld. AR is that it is a current account between M/s. S N Enterprises which is a proprietary concern of assessee having business transactions with the EPIL in which the assessee is a Director. On perusal of ledger accounts as Annexure 2 to the assessment order as rightly pointed by the ld. AR, it reflects the business transactions between EPIL and M/s. S N Enterprises particularly at page No. 5 the closing balance as on 31-03-2009 is ₹ 2,82,18,652/- and page Nos. 3 and 4 of Annexure 2 of the assessment order reflects sales as on 06-10-2008, 07-10-2008, 08-10-2008 and 09-10-2008 which clearly shows the business transactions between EPIL and M/s. S N Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hashcand Co. against a purchase of ₹ 2,26,42,116/- during the year under consideration. Hence just because certain amounts are outstanding against a particular creditor, it cannot be termed as excess period of credit‟. 7. Having considering the facts and circumstances of the case we hold that the assessee being a proprietary of M/s. S N Enterprises having business transactions with EPIL and treating the closing balance as on 31-03-2009 is interest free advances is not maintainable. Thus, the order of CIT(A) in upholding the view of AO in invoking the section 17(2) r.w.r. 3(7)(i) is not warranted. Thus, the order of CIT(A) is set aside and ground No. 1 raised by the assessee is allowed. 8. Additional ground No. 2 rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ert profit to Agarwal and upheld the addition made and confirmed by the AO and CIT(A) therein in the hands of Ashok Raghunath Mane. In order to come to such conclusion this Tribunal examined the Income Tax Return filed by the Agarwal brothers for the year under consideration therein, wherein it was found the business income shown by the Narendra Bhimsen Agarwal at ₹ 3.34 lakhs and opined there is no match to the income of ₹ 1.05 crores. These facts are not disputed by both the parties. Therefore, we find force in the arguments of ld. AR that the addition made in the hands of assessee is not maintainable. Thus, additional ground No. 2 raised by the assessee is allowed. 10. The ground No. 2 in main grounds of appeal is interlin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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