9911796707
TMI Blog2014 (1) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is a company registered under the Indian Companies Act. The assessee is engaged in the business as a builder. For the impugned assessment year, the assessee filed its return on 28-3-2008 declaring a total income of Rs.1,72,09,320/-. During the scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has advanced interest free loan of an amount of Rs.2,45,06,644/- to G.S. Gupta and an amount of Rs.1,99,91,120/- to Vansh Builders Pvt. Limited. Though the assessee contended that the interest free loans were given out of on commercial expediency, the Assessing Officer disallowed an amount of Rs.35,59,820/- from the total interest payment claimed as expenditure deduction by the assessee and accordingly determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - had been paid in respect of property yielding rental income. He further held that had the assessee not given interest free advance to GS Gupta and M/s Vansh Builders Pvt. Ltd., totalling to Rs.4.45 crores, it would not have required to incur interest expenditure in respect of the borrowings to that extent. The CIT (A) further held that the assessee was also not able to prove that the advances were made on account of commercial expediency as the assessee could not establish as to what the said persons did with the interest free loans given by the assessee. The assessee could not prove what advantage it obtained out of advancing such interest free funds to them, though it was itself incurring substantial interest expenditure for earning the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e file of the Assessing Officer for verifying the claim of the assessee. 8. We have heard the submissions of the parties and perused the orders of the lower authorities as well as other material on record. It s a fact on record that the assessee has not shown any income under the head business and profession nor has claimed any expenditure under that head. On the other hand, the assessee has shown income from house property at Rs.110,000,004/- and has claimed deduction u/s 24 of the Act of Rs.54,133,550/- towards interest on term loan availed from SBI. It is also a fact that the assessee during the year had advanced interest free loan to Sri G.S. Gupta and M/s Vansh Builders Pvt. Ltd., who are closely related to the assessee. But the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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