TMI Blog2015 (7) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... ther given a finding that the assessee had no liquid funds for its day to day business transactions and did not make any borrowing during the year nor any new advances were granted by the assessee and the advances, which were granted in earlier years, were in connection with the business of the assessee. The ld. CIT(A) has also noted that no disallowance on account of interest was made by the Assessing Officer in earlier years and after examining the various loans and advances in the light of the ratio laid down by the Hon'ble Apex Court in the case of S.A. Builder Ltd. (2006 (12) TMI 82 - SUPREME COURT ) has given a categorical finding that the loans and advances given by the assessee were for business purposes. Before us, the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts of the case, as culled out from the records for the Assessment Year 2001-02 are as under:- 4. The assessee is a Company stated to be engaged in the business of manufacturing of Ice-cream by the trade name 'Vadilal'. The assesseecompany filed its original Return of Income for Assessment Year 2001-02 declaring loss of ₹ 1,12,77,669/-. The assessment was framed u/s 143(3) vide order dated 26.02.2004 and total income was determined at ₹ 59,56,858/- by inter alia disallowing interest of ₹ 1,54,72,055/-. Aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A) who vide order dated 18.05.2005 upheld the action of the Assessing Officer but on account of calculation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 965/-. 5. Aggrieved by the aforesaid order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A) who vide order dated 20.07.2011 allowed the appeal of the assessee by holding as under:- 3.5 Decision: I have carefully perused the assessment order, the submissions given by the appellant, the order of the ITAT through which the matter was set aside to the file of the A. O. and the remand report submitted by the A. O. Perusal of copies of accounts of the parties to whom the interest free advances has been given by the appellant show that these parties are the one with whom the appellant was having regular business transactions. Some of them are the suppliers of raw material and packing material and the advance h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss making company and had approached BIFR for declaring it as a sick company. The company had no liquid funds for its day to day business transactions. It did not make any borrowing during the year nor any new advance has been given. As discussed above, the loans and advances have been given to suppliers of raw material and packing material, government bodies and other business related purposes. It is also pertinent to note that in earlier years, no disallowance on this ground was made by the A. O. After examining the position of various loans and advances in accordance with the guidelines of Hon'ble Supreme Court given in the case of S. A. Builders, I am of the view that the loans and advances given by the appellant are for business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvances were granted by the assessee and the advances, which were granted in earlier years, were in connection with the business of the assessee. The ld. CIT(A) has also noted that no disallowance on account of interest was made by the Assessing Officer in earlier years and after examining the various loans and advances in the light of the ratio laid down by the Hon'ble Apex Court in the case of S.A. Builder Ltd. (supra) has given a categorical finding that the loans and advances given by the assessee were for business purposes. Before us, the Revenue has not brought any material on record to controvert the findings of the ld. CIT(A). In view of these facts, we find no reason to interfere with the order of the ld. CIT(A) for both the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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