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TMI Blog2021 (6) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion that the advances in question were made during the year relevant to the assessment year under consideration and the assessee had utilized the interest-bearing funds for giving interest free loans to the above five parties. Hence, we find merit in the arguments of the Ld. Counsel for the assessee that the impugned order is not sustainable in law. Further, we are of the considered view that the impugned order is contrary to the evidence on record and also against the settled principles of law. Accordingly, we set aside the impugned order passed by the Ld. CIT(A) and direct the AO to delete the addition made on account of disallowance u/s. 36(1)(iii) - Decided in favour of assessee. - ITA No. 596/Chd/2019 - - - Dated:- 8-4-2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of disallowance u/s. 36(1)(iii) of the Act. Still aggrieved, the assessee is in appeal before this Tribunal. 3. The assessee has challenged the impugned order by raising the following grounds:- 1. On the facts and in the circumstances of the case the Ld. Commissioner of Income-tax (Appeals) has erred both on facts and in law in upholding disallowance of interest u/s. 36(1)(iii) amounting to ₹ 39,04,797/- made by the AO on amount advanced, which was computed @15% on the monthly balances. The Ld. CIT(A) has failed to appreciate that the partners of the firm were having sufficient non interest-bearing funds of ₹ 6.58 Crores Approx. out of which non interest bearing loans and advances of ₹ 3.35 Crores w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration. The Ld. Counsel placing reliance on the judgment of the Hon'ble Supreme Court in the case of Hero Cycles P Ltd. vs. CIT (Central) Ludhiana in Civil Appeal No. 514 of 2008, judgment of the Hon'ble Punjab and Haryana High Court in the case of Munjal Sales Corporation vs. Asstt. CIT (2004) 90 TTJ (Chd) 782, judgment of the Hon'ble Bombay High Court in the case of CIT vs. Reliance Utilities Power Ltd. (2009) 178 Taxman 135 (Bom), and various decisions of the ITAT, submitted that the findings of the Ld. CIT(A) are contrary to the law laid down by the courts/Tribunal in the aforesaid cases. The Ld. Counsel invited our attention to the copy of audited account, to point out that the aggregate of opening interest fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances the assessee had sufficient non-interest-bearing funds in the form of capital reserves of the partners. 6. As contended by the Ld. Counsel, the assessee has reflected the outstanding debit balance in respect of Sh. Radhey Sham popli amounting to ₹ 7,13,483/-, M/s. Parvati Textiles amounting to ₹ 29,90,000/-, Sh. Lovish Arora amounting to 9,50,000/- and Sh. Faqir Chand Goyal amounting to 73,00,000/- in Annexure 'H' under the head 'Investment and Deposits' as on 31-03-2013 in its books of account, which is at page 45 of the paper book. Similarly, debit balance in respect of M/s. G.D. Export (India) amounting to ₹ 2,06,48,500/- has been reflected in Annexure 'K' under the head 'Loans and A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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