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TMI Blog2023 (6) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... to advance/loan, to party. Assessee claimed that the entire amount was utilized from the non-interest-bearing fund. We respectfully relied on the orders which are duly relied by the ld. AR, are ITAT Chandigarh Bench in the case of M/s Gourav Malhotra Co. [Supra] and the order of Hon ble Apex Court in the case of Reliance Utility and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] and Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] . Accordingly, the assessee s payment for advance from non-interest-bearing fund is not attracted any interest. So, the assessee has not contravened the section 36(1)(iii) for payment of interest free advance. The issue was first time explained before the Bench. The appeal is remanded back to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. without passing a speaking order and merely stating that the funds available in the form of sundry creditors are not interest free in nature. As such, addition confirmed is illegal, unjustified and uncalled for. The same be deleted. 3. That the appellant craves to add, amend or alter any ground of appeal on or before the hearing. 3. Brief fact of the case is that the assessment was framed by the ld. AO as per the direction of the order u/s 263 of the Act. The moot point is that the disallowance of expenses u/s 36(1)(iii) amount to Rs. 12,69,700/- on account of non charging of interest on advanced amount to M/s Lala Bhan Chand Memorial ignoring the direction of the ld. CIT(A) as per para 25 of the appeal order dated 29.05.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2019 had set aside the issue to the file of the Assessing Officer to examine the availability of interest free funds. 5.1. The ld. AO vide letter, dated 24.06.2019 asked us to appear before him to prove the availability of funds with the Assessee. The assessee filed a letter, dated 02.07.2019 at APB page 37 , along with balance sheet from pages 38 to 48 of Paper Book and gave the detail of interest free funds available with the assessee. Copy of the letter is very much clear and apparent. 5.2. The ld. AO has not considered the reply filed by the assessee and again made the addition of Rs. 12,69,700/-.Actually, the total interest free funds available with the assessee has been to the tune of Rs. 13,10,99,196/-, which comprises o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Vs Reliance Utilities Power Ltd. [2008] 178 taxman 135 / 313 ITR 340 (Bombay) 10. If there be interest-free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion the Supreme Court in East India Pharmaceutical Works Ltd.'s case (supra) had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd.'s case (supra) where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding of the Tribunal that the interest free funds available to the assessee were sufficient to meet its investment. Hence, it could be presumed that the investments were made from the interest free funds available with the assessee. The Tribunal has also followed its own order for Assessment Year 2002-03. 8. In view of the above findings, we find no reason to interfere with the judgment of the High Court in regard to the first question. Accordingly, the appeals are dismissed in regard to the first question. In view of the above said facts, the additions as made by the Assessing Officer deserves to be deleted. 6. The ld. DR vehemently argued and relied on the order of the revenue authorities. 7. We heard the rival submis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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