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TMI Blog2021 (3) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... ised a loan it can be presumed that the investments were from the interest-free funds available . The above ratio laid down by the Hon ble Jurisdictional High Court is to be examined in the instant case. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to examine the applicability of the ratio laid down in Reliance Utilities Power Ltd.(supra). We direct the assessee to file the relevant documents/evidence before the AO. Assessee appeal is allowed for statistical purposes. - SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Assessee by : Ms. Radhakant Sarat, AR Revenue by : Mr. Sanjay J. Sethi, DR ORDER PER N. K. PRADHAN , A. M. This is an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting in disallowance of proportionate interest. The assessee has taken interest free loans also which is as under : Sr. No. Name of the concern Sum Advanced 1. C.K. Shah HUF ₹ 62,810/- 2. Saryu Manish Shah ₹ 31,410/- Total ₹ 94,220/- However, the AO was not convinced with the above explanation of the assessee on the ground that it is not supported by documentary evidence. Therefore, he calculated the proportionate interest and accordingly made a disallowance of ₹ 1,93,918/- u/s 36(1)(iii) of the Act. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 31.05.2019, the Ld. CIT(A) affirmed the above disallowance made by the AO on the ground that : 5.2 Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons regarding interest paid on borrowed loan by assessee has not been proven with the necessary documentary evidence. In view of above facts, ground number 2 of the assessee is dismissed and the addition made by A.O. in respect of disallowance of proportionate interest expenses of ₹ 1,93,918/- is upheld. 5. Before us, the Ld. counsel for the assessee submits that the capital of assessee being more than the advances, there is no question of interest bearing funds being given for advances resulting in disallowance of proportionate interest. On the other hand, the Ld. DR submits that the assessee has not established before the AO as well as Ld. CIT(A) that on the date when each interest-free loan was given, there was sufficient non-inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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