9911796707
TMI Blog2016 (2) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as "the Act"). ii. Addition of Rs. 2,28,345/- on account of notional interest on advances given during the course of business. 2. The facts of the case as emanating from the records are: The assessee is a partnership firm engaged in the business of Builders and Developers, dealing in LPG and retail trading at Jalgaon. The assessee filed its return of income for the assessment year 2009-10 on 30-09-2009 declaring total income as Rs. NIL. The case of the assessee was selected for scrutiny and accordingly notice u/s. 143(2) was issued to the assessee. During the course of scrutiny assessment the Assessing Officer observed that in balance sheet the assessee has shown loans and advances to the tune of Rs. 1,82,57,320/-. All the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the explanation furnished and rejected the same. In so far as notional interest on interest free loans is concerned the assessee challenged the addition on merits and also made an alternate plea that there were some arithmetical errors in determination of interest on debit balances. According to the assessee the party wise interest @ 13% comes to Rs. 2,28,345/-. There is difference of Rs. 1,48,785/- in the interest computed by the Assessing Officer and the assessee. The Commissioner of Income Tax (Appeals) accepted the alternate plea of the assessee and granted relief of Rs. 1,48,785/-. Against the findings of the Commissioner of Income Tax (Appeals) the assessee is in second appeal before the Tribunal. 3. Shri Pramod Shingte appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, the ld. AR of the assessee placed reliance on the decision of Hon'ble Supreme Court of India in the case of Commissioner of Income-tax Vs. Orissa Corporation P. Ltd. reported as 159 ITR 78 (SC) and the decision of Tribunal in the case of Vishnu Jaiswal Vs. Commissioner of Income Tax (Appeals) reported as 137 ITD 259 (TM) (Luck.). The ld. AR further submitted that the assessee has discharged his onus by giving the details, the Department has failed to make enquiries from the concerned persons. 4. In respect of the second addition on account of notional interest on interest free advances given by the assessee. The ld. AR submitted that there is no concept of notional interest under the provisions of Income Tax Act. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived. The Commissioner of Income Tax (Appeals) has recorded a finding that the amount of compensation is much less than the amount of advance paid the agreement value. The assessee has placed on record only photocopy of the documents and the original documents were not produced by the assessee either before the Assessing Officer or before the Commissioner of Income Tax (Appeals) for verification. The assessee has failed to discharge its initial burden of proving the identity and creditworthiness of the creditors and the genuineness of the transaction. In so far as charging of notional interest on loans and advances by the assessee, the ld. DR submitted that the assessee has not been able to show from the records that the assessee was havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments are either registered or notarized. Even the details of the persons who have witnessed the alleged agreements are not given. The agreements are ostensibly executed in the year 2008, but the shops have not been allotted to the said persons till December, 2012 when the impugned order was been passed. The ld. AR has not placed on record a copy of sale agreement in respect of any of the shops even after seven years of the aforesaid agreements to substantiate that the shops were ultimately registered in the name of the persons from whom advances were taken. The Commissioner of Income Tax (Appeals) in his order has given a finding that the details of the brokers through whom the shops were sold or agreed to be sold was not furnished. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals) accepted the alternate submissions and granted relief to the extent of Rs. 1,48,785/-. Before the Commissioner of Income Tax (Appeals), the assessee never raised any plea that the assessee was having sufficient own interest free funds for advancing interest free loans. This plea of sufficient funds was raised by the assessee for the first time before the Tribunal. However, the assessee has not substantiated its plea from the records. In the absence of any such evidence, the reliance on the decision of Hon'ble Bombay High Court in the case of Commissioner of Income-tax Vs. Reliance Utilities and Power Ltd. (supra) is misplaced. The assessee could neither show availability of sufficient interest free funds for advancing su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
