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2013 (6) TMI 332 - ITAT MUMBAIAddition in respect of interest payment - disallowance u/s 36(1)(iii) - Held that:- It is an admitted fact that the assessee gave Rs. 9.33 lacs loan / advances to three of his friends namely Sri Kastrichand Pvt. Ltd. (Rs. 3,83,000/-), Mahesh Ahuja (Rs. 4,50,000/-) and Advance Samata Anand (Rs. 1,00,000/-). It is also a fact that out of the interst bearing loans, the assessee received Rs. 11.6 lacs from Tarachand Kashyap, HUF which is used for the purpose of acquiring a business asset. Thus, the interest claim of Rs. 92,912/- directly relates to the said loan of Rs. 11.6 lacs. Thus, the balance of Rs. 38,529/- is an interest paid to the banks which is open to disallowances. The assessee has not demonstrated as to the relatable interest bearing loans and the manner of appropriation of the said loans. In the absence of the same, the only presumption is that the said loans from Kotak Mahendre Bank and DCB are utilized for lending to the said three parties for non business purpose. Ratio of S.A. Builders vs. CIT case (2006 (12) TMI 82 - SUPREME COURT) is relevant here and the advances of Rs. 9.33 lacs were given outside the purview of the established concept of 'commercial expediency'. Thus disapproving the estimation method adopted by the CIT(A) in making disallowance restricting to Rs 93,300/-. Therefore, restricting the disallowance to Rs. 38,529/- should meet both ends of justice - grounds raised by the assessee are partly allowed.
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