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TMI Blog2013 (11) TMI 1792X X X X Extracts X X X X X X X X Extracts X X X X ..... e was not a "contractor" and the assessee was not governed by AS-7 of the guidelines of institute of chartered Accountants of India, ignoring the underlying fact that the assessee had performed and undertaken all actions as a contactor and camouflaged the performance as "developer". 2. The CIT(A) erred in law and on facts in deleting interest disallowance of ₹ 13,62,808/- overlooking the fact that the company had diverted the funds for the directors of the company, which caused delayed payment to and charging of interest by the Municipal Corporation." 3. The first ground relates to rejection of books of account and applying of rate of 8 % on the booking advances. 4. Brief facts of the case are that assessee is engaged in the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case i.e. AS-7 cannot be made applicable. Accounting standard AS-9 which has been reproduced by the Ld. CIT(A) and has been discussed at pages 4-8 of his order is applicable in the present circumstances and facts of the case. Moreover, it has not been controverted by the Ld. DR appearing for the Revenue that the assessee had awarded the contractors to various other contractors. Also it has not been controverted that there is no construction activity carried out by the assessee during the year and there was a dispute of the parties who had filed civil suit in Mumbai civil court. The assessee had received the advances which are duly reflected in the balance-sheet of the assessee. There is no certainty of the Revenue recognition at this stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 Deposit Guest House 2. Harsha Bhuta 25,00,000 Deposit Mumbai Office 3. Jayshreeben Bhuta 3,70,000 Mrs. J, P. Bhuta 4 Abhi Builders 5,00,000 For purchase of property 5 Dilip Pandit 1,65,000 Advance 6 Dwarksh Corporation 2,25,125 For purchase of property. 7 Uday Desai 1,35,725 For share trading at Rajkot. 8 Anik Security & finance Ltd. 6,53,572 Advance 9 A.M Investment 23,88,105 For purchase of shares. 10 Arvindbhai 50,000 Advance 11 H.C. Mehta 3,00,000 For purchase of shares 12 Pravinkant 1,00,000 For purchase of shares 13 Shruti Investment 1,97,862 For purchase of shares Total 90,85,389 4.2 It is seen that most of the advances have remained outstanding for the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ori) The Honourable Judicial Authorities in the above cases have held that even in case interest free loans are given to its associate concerns, it shall be presumed that the assessee would have not raised interest bearing loans considering that the amount of interest free loans advanced to associate concerns would have been available with the assessee for its business purpose. Addition Rs.l3.62.808/-" 7. Ld. CIT(A) has deleted this disallowance by observing as under:- "I have given careful consideration to the submissions and to the facts of the case. The appellant has paid ₹ 15,00,000/- to MCGM as interest. It is further seen that it has not paid any interest on advance received on booking and also on unsecured loan. Secured ..... X X X X Extracts X X X X X X X X Extracts X X X X
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