TMI Blog2016 (4) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer with the direction to decide the limited issue concerning the loans and advances made to M/s Punjab Machinery Works P. Ltd, M/s Vicky Carriers and M/s Rajiv Kapoor Transport afresh, in accordance with law, after affording due and reasonable opportunity of being heard to the assessee. - ITA No. 218/Chd/2011 - - - Dated:- 6-4-2016 - SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER For The Appellant : Sh. S.K. Mittal For The Respondent : Sh. Gagandeep Singh ORDER PER H.L.KARWA, VP This appeal filed by the assessee is directed against the order of CIT(A) II, Ludhiana dated 29.12.2010 relating to assessment year 2007-08. 2. The only effective ground raised by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of CIT Vs. Abhishek Industries Ltd (2006) 286 ITR 1(P H).On appeal, the CIT(A) confirmed the addition and, hence, the assessee is in appeal before the Tribunal. 4. We have heard the rival submissions. Shri Gagandeep Singh, Ld. Counsel for the assessee pointed out that the amount in question was paid by cheques to the aforesaid concerns namely M/s Sonal Fabricators Pvt Ltd and M/s Disk India Pvt Ltd for the fabrication / manufacturing of four LPG Bullet Trucks / LPG Road Tankers for transportation of explosive LPG under proper fabricating licnece from the Ministry of Commerce and Industry, Department of Explosives, Government of India. It is claimed that M/s Sonal Fabrication Pvt Ltd is engaged in the business of manufacturing / fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the parties in the relevant period. As a consequence, the amounts are standing in the name of above two parties and which in effect represented cost of tanks. There is no dispute that the above two amounts represented cost of LPG tanks which were purchased and used for business purposes and do not represent any interest free loans or advances for non business purposes. The assessee has also a submitted copy of the confirmation letter on behalf of M/s Sonal Fabricators Pvt Ltd., wherein the said concern has certified that the assessee on their behalf had paid ₹ 5 lakhs vide cheque No. 533245 dated 3.12.2005 to M/s Disk India Pvt Limited towards payments against new LPG tanks. The copy of the said certificate is available at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Punjab Machinery Works P. Ltd, ₹ 68,33,492/- to M/s Vicky Carriers and ₹ 11,35,051/- to M/s Rajiv Kapoor Transport. It is stated that M/s Punjab Machinery Works P. Ltd a sister concern of the assessee, was engaged in the business of manufacturing of Circular Knitting Machines. The money was given to the sister concern as application money for fresh issue of new shares of that concern. The amount given was called back in the succeeding years for the reason of non-issuance of the new shares. As regards M/s Vicky Carriers and M/s Rajiv Kapoor Transport, it was claimed that these concerns are engaged in the business of plying of trucks as the sub contractors of the assessee. The outstanding balance is an aggregated advance give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts is upheld. However, the disallowance of interest should be worked out for the period such amounts have been outstanding. 8. We have heard the Ld. Representatives of both the parties. Shri Gangandeep Singh, Ld. Counsel for the assessee vehemently argued that the amount in question was advanced by the assessee firm to M/s Punjab Machinery Works P. Ltd being a sister concern as application money for fresh issue of new shares of the said concern. He further pointed out that even otherwise the advances for purchase of shares were given out of interest free advances and deposits lying with the assessee to the extent of ₹ 99,40,376/-. The details are available at page 58 of the paper book. He therefore, submitted that no disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t documents furnished by the assessee. Even, the first appellate authority has passed a cryptic order without considering the submissions made by the assessee in support of its claim. Considering the entire facts and circumstances of the present case, we set aside the findings of the CIT(A) to the above extent and remand the matter to the Assessing officer with the direction to decide the limited issue concerning the loans and advances made to M/s Punjab Machinery Works P. Ltd, M/s Vicky Carriers and M/s Rajiv Kapoor Transport afresh, in accordance with law, after affording due and reasonable opportunity of being heard to the assessee. 9. No other point was raised or argued before us. 10. In the result, the appeal is allowed partly an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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