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2020 (6) TMI 149 - AT - Income TaxDisallowance on account of provisions of section 17(2) of the Act r.w.r. 3(7)(i) - Interest free advance given to Director employee - According to AO said advances are not given or taken during the course of normal business and considering the assessee having employee and employer relationship treated the aforesaid amounts as advances and computed the interest @ 1.02% - HELD THAT:- We hold that the assessee being a proprietary of M/s. S & N Enterprises having business transactions with EPIL and treating the closing balance as on 31-03-2009 is interest free advances is not maintainable. Thus, the order of CIT(A) in upholding the view of AO in invoking the section 17(2) r.w.r. 3(7)(i) is not warranted. Thus, the order of CIT(A) is set aside and ground No. 1 raised by the assessee is allowed. Addition on account of capital gains - ingenuine transaction - HELD THAT:- Transaction between Ashok Raghunath Mane and Shri Narendra Bhimsen Agarwal as ingenuine, it was an attempt by the Ashok Raghunath Mane to divert profit to Agarwal and upheld the addition made and confirmed by the AO and CIT(A) therein in the hands of Ashok Raghunath Mane. In order to come to such conclusion this Tribunal examined the Income Tax Return filed by the Agarwal brothers for the year under consideration therein, wherein it was found the business income shown by the Narendra Bhimsen Agarwal at ₹ 3.34 lakhs and opined there is no match to the income of ₹ 1.05 crores. These facts are not disputed by both the parties. Therefore, we find force in the arguments of ld. AR that the addition made in the hands of assessee is not maintainable. - Decided in favour of assessee.
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