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2018 (5) TMI 1083 - ITAT DELHIAddition u/s. 36(1)(iii) - interest free loans / advances to sister concerns - Held that:- We note that the advance in dispute were given to the sister concerns as on 31.3.2011 and 31.3.2012 and the audited balance sheet for the year ending 31.3.2011 and 31.3.2012 exhibits that the assessee has sufficient interest free funds (own funds / interest free loan/sundry creditors) to provide loan / advance to sister concerns. We note that as on 31.3.2011 the assessee has given interest free advances to sister concern amounting to ₹ 1,98,64,866.85 out of own funds amounting to ₹ 38,01,36,440.98 which is far in excess of advances to sister concerns. We further note that assessee has given fresh advances amounting to ₹ 48,50,000/- to M/s SK Enterprises & ₹ 14,50,000/- to M/s Pride Sales Corporation (Totaling ₹ 63,00,000/-) during the impugned AY 2012-13 out of own funds amounting to ₹ 18,60,06,299.47 (Rs. 18.60 cr.) which too is far in excess of advances to sister concerns and the interest free advances are from own funds as the loan amount as on 31.3.2012 has been reduced by ₹ 11,34,102/-. On going through the AO’s assessment order in assessee’s own case for the preceding year i.e. AY 2011-12 it was noted that no addition u/s. 36(1)(iii) has been made in the assessment passed u/s. 143(3) of the Act and also on perusal of the CIT(A)’s order in AY 2013-14, we note that Ld. CIT(A) Rohtak vide his order dated 11.4.2017 has allowed the assessee’s appeal for the succeeding assessment year i.e. AY 2013-14, on the same issue of Section 36(1)(iii) relating to same parties considering assessee’s submissions. Following the principle of consistency, the addition in dispute is deleted. - Decided in favour of assessee. Addition on account of telephone expense we note that no specific finding has been made to indicate that the expenses incurred could have been of a personal nature, therefore, we delete the same. - Decided in favour of assessee.
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