TMI Blog2017 (3) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. - INCOME TAX APPEAL No. - 87 of 2008 - - - Dated:- 24-1-2017 - Hon'ble Sudhir Agarwal,J. and Hon'ble Ravindra Nath Mishra-II,J. For the Appellant :- D.D. Chopra For the Respondent :- Namit Sharma JUDGEMENT 1 Heard Sri Alok Mathur, learned counsel for appellant and Sri Namit Sharma, learned counsel for respondent. 2. This appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as the Act, 1961 ) has arisen from judgment and order dated 22.10.2007 passed by Income Tax Appellate Tribunal, Lucknow Bench, Allahabad (hereinafter referred to as the Tribunal ) in ITA No. 626/Luc./2006 for the Assessment Year 2002-03. 3. Appellant framed 5 substantial questions of law and this Court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich interest was disallowed in Asstt. Year 2001-02. As per these details the total of non-interest bearing loans were ₹ 2600.20 lakhs last year. This year the balance of non-interest bearing loans is the same i.e. ₹ 2600.20 lakhs as per details furnished by the assessee. From the scrutiny of details it has been noticed that interest in following were not charged. SL NO. PARTY NAME OPENING BALANCE CLOSING BALANCE NET PAYMENT DURING THE YEAR ADD OPENING BALANCE AMOUNT WHICH INTEREST DISALLO-WED Non-Interest Bearing Advances (Average Interest Rate 12.50%) 1 Friends Construction Corp. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.00 5.00 0.00 0.00 5.00 TOTAL 2,600.20 2,620.20 - - 2,620.20 It is thus clear that on one hand the assessee company is borrowing money from Banks and financial institutions and paying interest during this financial year on other hand it has given interest free advances to the parties without transacting any business whatsoever. Total expenditure incurred on interest payment during the year as per Balance Sheet Schedule-'P' is ₹ 169,42 crores. On total borrowings, average rate of interest paid is 12.5%, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of CIT (A). So long as CIT (A)'s order is not upset, it was not open to A.A. to ignore the same. Therefore, addition made by him was apparently illegal. This is what has been found by CIT (A) and Tribunal in the appeal preferred against assessment order dated 29.03.2005. CIT(A) has dealt with aforesaid issue in paras 7, 8 9 as under: 7. Regarding the addition of ₹ 3,25,03,000/- the Assessing Officer has mentioned in the order that from the examination of the balance sheet of the company for the financial year 2001-02 it was found that the company has advanced interest free loan to various parties with whom it had no business transaction. The details of such loans which are outstanding as on 31.3.2002, have been furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore me by the Ld. Counsels of the appellant. The similar issue has been decided by me in the case of the appellant in assessment year 1999-2000 vide order dated 9.11.2004 in Appeal No. CIT(A)-I/264/CC-III/Lko/02-03-234, in assessment year 2000-01 vide order dated 27.12.2004 in Appeal No. CITt(Appels-I/39/CC-III/Lko/03-04/298 and in assessment year 2001-02 vide order in Appeal No.CIT(A)-I/223/CC-III/Lko/04-05/460 dated 29.3.95. As there is no change in the set of facts, the addition of ₹ 3,25,03,000/- made by the AO is deleted. (emphasis added) 7. Tribunal in appeal preferred by Revenue has also noted that in ITA 187/Luc/04, relating to assessment year 2000-01, decided on 17.11.2006, Tribunal has already upheld the view taken by CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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