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2015 (12) TMI 99 - AT - Income TaxAddition towards notional interest @ 12% on the amounts advanced to Adityam Technoplast Pvt. Ltd. - Held that:- No cogent material on record to establish that the assessee had sufficient/ surplus funds available with him, which could be advanced as interest free loans to the said company. His total capital as on the first day of the financial year was ₹ 18,32,831/- and at the year end was ₹ 17,79,072/-. Secured loan is of ₹ 2,58,375/- and unsecured loan is of ₹ 50,93,062/. The trade creditors and others are of ₹ 1,25,41,822/- and cash credit loan from ICICI Bank is of ₹ 46,63,335/-. The assessee has also issued cheques from cash credit account on different dates. His investment in Fixed Assets is ₹ 78,41,751/-, in Fixed Deposits ₹ 9,98,156/-, in current assets ₹ 1,19,08,899 and in loans and Advance is ₹ 36,86,860/-. From the above, it is clear that the assessee had no surplus funds which could be advanced as interest free loan. It appears that loan has been given to Adityam Polymer (P) Ltd., Roorki for the purpose of purchasing land out of loan fund. The assessee could not be able to substantiate his stand that he had surplus fund which could be advanced as interest free loan to the sister concern so as to make the assessee eligible for deduction of interest. The case laws cited by the assessee, actually deal with the cases where there was surplus fund on account of huge profit or huge reserve or interest free fund. Hence, the same are not applicable to the present case in hand. We, therefore, do not find any good reason or material on record to interfere with the conclusions arrived at by the learned authorities below.- Decided against assessee.
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