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2014 (2) TMI 1357 - ITAT DELHIDisallowance of interest on advances made to sister concern without commercial expediency - CIT (A) deleted the disallowance by holding that the assessee has sufficient interest free funds - HELD THAT:- CIT (appeals) demonstrates that the assessee has sufficient interest free funds. Presumption is that such interest free funds have been utilized for giving interest free advances, unless otherwise proved. For this proposition we draw strength from the judgment of CIT vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] Respectfully following the same we uphold the finding of the Ld. CIT (A). CIT (A) also held that the loans in question taken by the assessee were for specific purposes, namely for export bill discounting, packing credit loans, term loan taken for purchase of property for business use, car loan and overdraft. The Bank when guaranty such specific loans, ensure that the money is used for the purpose for which it is given . The funds are not released to the assessee but are paid to the organization from where the assessee received the asset/ goods etc. directly. They have sufficient cheques and balances in the system. The loan granted by a bank or financial institution for specific purpose has been diverted, without evidence what so ever, for the purpose disallowing interest payment cannot be countenanced. Thus on this ground also the order of the Ld. CIT (A) has to be upheld. In the result this ground of the Revenue is dismissed. Income from house property - Addition as notional income - AO considering the turn over and estimated that only 20% of the premises were used for business and the balance 80% of the property was vacant and he estimated a notional income of ₹ 7 lac under the provisions of section 22 - HELD THAT:- CIT (A) considered (a) the certificate of registration and allotment of TIN by the Department of commercial taxes Govt. of UP. (b) Monthly VAT returns. (c) Details of purchase of furniture. (d) Details of purchase of machinery. (e) Details of purchases of raw material. (f) Copies of the assessment orders of commercial tax officer, and held that the premises in question have been occupied by the assessee for the purpose of business. Further held that AO has no basis what so ever, to estimate that 20% of the factory was only being used for business and for holding that the balance area was lying vacant. DR could not controvert this factual finding of the first appellate authority. Her arguments were on the issue of admission of additional evidence etc. These are devoid of merit. Revenue ground dismissed. Admission of additional evidence - assessee submitted that the only additional evidence that was admittedly an assessment order of the commercial tax department, and that it was filed at on the direction of the CIT (A) u/s 46(a) (iv) - HELD THAT:- In our view nothing turns on this issue. A copy of the order of the commercial tax officer, even if ignored does not effect the allowability of the ground no.2 as other evidences produced suffice to support the order of the Ld. CIT (A).
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