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TMI Blog2017 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer (AO) which has confirmed by the Ld. CIT(A). Another issue in AY. 2007-08 is with reference to disallowance of amount of purchases to an extent of Rs. 36,09,954/-. This amount was consented by the Assessee, before the AO and as such confirmed by the Ld. CIT(A). Before us also no arguments were placed. Accordingly, ground to that extent is considered not pressed. 2. As stated, the only issue for consideration is the disallowance of 50% of financial charges claimed by assessee. In AY.2006-07, assessee claimed financial charges by way of LC discounting to an extent of Rs. 83,89,594/- under the head 'financial charges'. On the reason that assessee was diverting the funds obtained from this to advance as loans to sister concerns without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2014 is exhaustive and very much relevant and adequate on the issue of financial charges. Hence, I fully agree with the AO regarding the disallowance of 50% of the amount of financial charges debited i.e. Rs. 41,94,797, being interest related to the borrowed funds utilized for the purpose other than business and also agree with the report of the AO dated 15-6-2012. The case-law cited by the appellant are also different from the facts of the appellant and hence, the appellant submission cannot be accepted. Therefore, I confirm the addition". 2.1. Similar order was passed in AY. 2007-08 also. Hence, the present appeals. 3. For the sake of record, the grounds raised by assessee are extracted as under: "1. The learned CIT(A) erred in both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee was contending that LC discounting charges are paid to the banks and was part of the business expenditure and no part of the amount was diverted as advance to sister concerns, the fact of which was not contradicted by the Revenue. It was further submitted that AO in the post search assessments u/s. 153A has allowed similar claims in AYs. 2004-05 & 2005-06. It was submitted that the claim in AY. 2005-06 was to an extent of Rs. 1,30,69,614/- and the same amount was allowed in the post search scrutiny assessments. Further, it is also submitted that in AY. 2008-09, AO has allowed the amount and even though 263 proceedings were initiated in that year also, the Ld. CIT did not take up any issue on disallowance of financial charges. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the grounds pertaining to that, particularly Ground Nos. 6 & 7 does not apply. 5. Ld.DR, however, submitted that there is no resjudicata involved and each year has to be considered on its own. Since the AO and CIT(A) examined and confirmed the disallowance at 50%, the same is to be upheld. 6. We have considered the rival contentions and perused the documents placed on record. As far as the facts are concerned, it was submitted that financial charges arose only on discounting of LC's, which was incurred for the purpose of business. Even though AO has noted that assessee is diverting funds for interest free advances to sister concerns, no such nexus was established nor details of funds utilised for non-business purposes were placed on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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