9911796707
TMI Blog2022 (7) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income for the AY 2015-16 admitting a taxable income of Rs. 13,71,500/-. Subsequently, the case was selected for complete scrutiny under CASS and statutory notices U/s. 143(2) and 142(1) were issued and served on the assessee called for certain information. In response to the notices, the assessee submitted the information called for and produced the relevant records before the Assessing Officer. The Assessing Officer considering the submissions made by the assessee assessed the income at Rs. 40,85,220/-. Thereafter, the Ld. Pr. CIT under the powers vested U/s. 263 of the Act issued a show cause notice dated 7/2/2020 considering the order passed by the AO u/s. 143(3) is prima facie erroneous in law and prejudicial to the interests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous and such a finding has no legs to stand. 5. For these and other reasons that are to be urged at the time of hearing of the appeal the appellant prays that the order passed by the Ld. Pr. CIT is erroneous both on facts as well as in law, therefore the same needs to be set aside in the interest of justice." 4. Before us, the assessee has also raised the additional grounds of appeal as follows: "The Ld. Pr. CIT under the facts and circumstances of the case, is not correct in directing the AO to disallow interest of Rs. 33,63,521/- (12% on Rs. 2,80,29,345/-) when the AO in the order passed U/s. 143(3) of the Act has rightly disallowed interest of Rs. 96,616/- calculated at 12% on the net amount of interest free advances given of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find from the submissions made by the Ld. AR that the interest free advance is being utilized in the business which reduced the cost of interest of the assessee arising out of interest bearing advances. We also find merit in the argument of the Ld. AR that there is no "one to one" matching of the interest free advances given and taken and hence it is considered from the own pool of funds available with the assessee. We also find from the order of the Ld. AO that the AO has rightly disallowed the sum of Rs. 96,616/- @ 12% on the difference between the interest free advances taken and given amounting to Rs. 8,05,137/-. In view of the above discussions, we find that prima facie the order of the Ld. AO is not erroneous in law and prejudici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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