TMI Blog2017 (2) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent : Rahul Dhawan, Departmental Representative ORDER T. S. Kapoor (Accountant Member) 1. This is an appeal filed by the assessee against the order of the learned Commissioner of Income- tax (Appeals), Amritsar, dated November 3, 2015, for the assessment year 2010-11. 2. The only issue raised in this appeal is the action of the learned Commissioner of Income-tax (Appeals), by which he had upheld the addition of ₹ 5,68,698 which the assessee had paid to the bank on account of interest. 3. The brief facts of case as noted in the assessment order are that the case of the assessee was reopened on the basis that the assessee had not charged any interest on advance made to the partner of the firm, Sh. Ajay Kumar, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Supreme Court that Ajay Mahajan was the petitioner and there was no mention of the firm and, therefore, he held that the property was supposed to be purchased by Mr. Ajay Kumar in his individual capacity and, therefore, he held that ₹ 1,00,00,000 deposited with the court belongs to Sh. Ajay Kumar, the partner of the firm, who had taken loan from the firm for his personal benefit and, therefore, he disallowed an amount of ₹ 5,68,698 which was paid by the assessee as bank interest. 5. Aggrieved the assessee filed an appeal before the learned Commissioner of Income-tax (Appeals) and submitted various submissions and also submitted that the capital of the firm was more than one crore in the financial years 2006-07 to 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, there was no reason for disallowance of interest paid to bank. 8. The learned Departmental representative, on the other hand, relied upon the order of the authorities below. 9. We have heard the rival parties and have gone through the material placed on record. We find that it is fact that the capital of the partners in all the years from 2006-07 to 2009-10 remained more than ₹ 1,00,00,000 against the alleged loan of ₹ 1,00,00,000. The hon'ble Punjab and Haryana High Court in the case of Gurdas Garg v. CIT (Appeals) [2016] 6 ITR-OL 101 (P H) has decided the following question of law in favour of assessee. For the sake of convenience the question framed by the hon'ble court and its adjudication are reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant has not established that it was the interest-free funds that were actually advanced as interest-free advances is without substance. Money has no identity. So long it is established that the interest-free advances are made by an assessee who has adequate free reserves, it is sufficient to establish that the amounts advanced interest-free cannot be added to the assessee's income. It was not contended that the interest-free advances exceeded the interest-free funds available with the appellant. Nor was it established that a particular advance received was in turn advanced by the assessee interest-free. In the circumstances, the order of the Tribunal upholding the addition is also set aside. Therefore, keeping in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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