TMI Blog2016 (9) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... advance the interest free loan of Rs. 7.37 crores. As mentioned earlier, the assessee had available with him Rs. 11.78 crores on account of capital itself. Moreover, he also had an interest free loan of Rs. 1.18 crores from his wife. The CIT (Appeals) also observed that the assessee had not rebutted the Assessing Officer’s contention that he had also made investment out of his capital during the year which exceeded the capital of the assessee. However, Mr. Katoch was unable to invite our attention to any part of the record which established this assertion. He merely relied upon the observation. Further, the nature of this investment is also not indicated. Nor is there anything to indicate that such investment was made out of the capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Hon ble ITAT is justified in deleting the addition of ₹ 34,00,000/- made on account of proportionate disallowance of interest expenditure, accepting the submission of the assessee that he was having interest free capital before any interest free advance was made and that there is nothing on record by any of the authorities below that the assessee had used the interest bearing funds for other than business purposes, whereas the assessee had submitted that loan raised by the assessee has been used for the purpose of business, ignoring the specific finding of the AO that the claims of the assessee that interest bearing funds were not diverted as interest free loan and that advances were given during the course of business, were fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed an assessment order under Section 144 of the Income Tax Act, 1961 (in short the Act). The assessee challenged the same before the CIT (Appeals). On 22.01.2009, a search was carried out under Section 132 of the Act at the assessee s premises. On 23.11.2009, the assessee filed a return of income under Section 153 A. There was no difference between the two returns. 6. On 26.02.2010, the CIT (Appeals) passed an order in the assessee s appeal against the assessment order dated 15.12.2008. On 29.12.2010, a further assessment order was passed under Section 153 A of the Act. This was in relation to the return filed under Section 153 A on 23.11.2009. The assessee challenged this order before the CIT (Appeals) by way of an appeal which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt. The Assessing Officer disallowed interest on a proportionate basis. 8. The assessee established that he had capital of Rs. 12.69 crores, received an interest free loan from his wife in the sum of Rs. 1.18 crores and earned profit of Rs. 11.11 crores for the assessment year in question. He had accordingly contended that he had sufficient free reserves from which he advanced the amount of Rs. 7.37 crores to his sister concerns free of interest. If the assessee established the same, he would be entitled to succeed. The CIT (Appeals), however, dismissed the appeal except to the extent of the interest free loans made to certain sister concerns. The assessee succeeded in respect of the loans to certain sister concerns as the CIT (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns. 11. This exercise by the Tribunal was one of appreciation of facts. We are unable to hold that the same was absurd or perverse. 12. The findings of the CIT (Appeals) in the order dated 26.02.2010 were confirmed in the order of the CIT (Appeals) dated 11.08.2011. The order dated 11.08.2011 merely confirmed the findings and the decision in the order dated 26.02.2010. Mr. Katoch, therefore, relied upon the observations and findings of the CIT (Appeals) in the order dated 26.02.2010. The CIT (Appeals) noted the assessee s contention that he had his own capital and interest free loans and profits. It was, however, observed that a perusal of the balance-sheet showed that the capital of the assessee included the profit earned during the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
