TMI Blog2017 (1) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 29/7/2016 and pertains to assessment year 2008 09. The grounds of appeal read as under 1. On the facts and in the circumstances of the case, the Ld. CIT(Appeals) erred in deleting the addition of ₹ 30,87,940/- made by the Assessing Officer u/s 69 of the I.T. Act, 1961. 2. The Ld. CIT(Appeals) has erred in so deleting the addition of ₹ 30,87,940/- without appreciating the fact that despite sufficient opportunities the assessee could not adduce any evidence before the Assessing Officer that the said stock was recorded in the assessee s books of account. 3. On the facts and circumstances sof the cae the Ld. CIT(Appels) has erred in deleing the addition of ₹ 3,02,400/- made by the Assessing Officer u/s 36(1)(iii) of the I.T. Act, 1961. 4. The Ld. CIT(Appeals) has erred in so deleting the addition of ₹ 3,02,400/- without there being any evidence that the interest free advances given by the assessee to Hanuman Tractor and two others were due to business expediency and merely because it was so stated to be by the assessee. 2. Apropos the first issue relating to deleting the addition of ₹ 30,87,940/-. The brief facts on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nally delivered to the buyers, therefore, the storage charges were lying as advance. The AO in para 5.3 has recorded a finding that the assessee has not produced any evidence regarding the ownership of stock and therefore, inferred that the stock submitted by Best Cold Storage Pvt. Ltd. is unaccounted stock of the assessee. The assessee further submitted before the AO the details of opening balance, purchases, sales and closing stock. The assessee pleaded before the AO that the stock lying in Best Cold Storage Pvt. Ltd. is out of the opening stock but the AO has discarded the contention of the assessee by stating that no evidence of opening stock kept with cold storage is furnished by the assessee. The AO therefore, treated the entire stock valued at ₹ 30,87,940/- kept in the Best Cold Storage as unexplained investment in stock purchased during the year and accordingly added the same to the total income of the assessee u/s 69 as unexplained investment in chillies. 3. Upon assessee s appeal learned CIT(Appeals) elaborately considered the submissions and gave the finding that the aforesaid stock of red chillies with the Best Cold Storage were out of opening stock with the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me in his books was much more than the stock shown in the Best Cold Storage. Therefore, the contention raised by the appellant that the stock kept in cold storage was reflected in the opening stock, coupled with the fact that the stock as per books was more than the stock reflected in the stock statement supplied by Best Cold Storage, the AO is not justified to add the value of this stock u/s 69 carried substantial force. 7.3 The ld. AO in para-3 of the assessment order has recorded a finding hat the books of account other relevant documents have been audited as required under the provisions of section 44 of the I.T. Act. The ld. AO in para-4 of the assessment order has further recorded a finding that the assessee has produced all the details called for including the audited books of account during the assessment proceeding and the same were verified. It is thus quite manifest from the above findings that the ld. AO has examined all the material details including the audited books of account of the appellant and accepted the same without finding any infirmity. The appellant has contended before the AO that the stock kept with the Best Cold Storage is out of opening stock. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the appellant has debited interest @ 12% in the P L a/c in respect of secured and unsecured interest bearing borrowed funds but no interest has been charged from the above parties. The AO therefore, disallowed the interest @ 12% p.a. on the borrowed funds in proportion to the interest free loans of ₹ 25.20 lacs./- 8. Upon assessee's appeal Learned CIT(Appeals) deleted the addition by accepting the asseessee s submission that the advances were made out of business expediency. The learned CIT(Appeals) held as under : On careful examination of the material facts as emanated from the submissions of the AR of the appellant, it is seen that AR has mainly contended that the interest free advances to Hanuman Tractors of ₹ 23.20 lacs and ₹ 2 lacs to two other parties are given out of business expediency. The loan advanced to Hanuman Tractors as fee of interest is stated to be for its farm vehicle supply and service business. The appellant has further submitted that Sonal Agro and Venkatesh Traders support the business of the appellant and the interest free loan given to them for short term get compensated by the business with which they support appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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