9911796707
TMI Blog2015 (3) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 passed under section 143(3) of the Income-tax Act, 1961. 2. The assessee has raised the following grounds of appeal: 1. The learned CIT(A) erred on facts and in law in upholding disallowance of notional interest of Rs. 14,43,000/- on advances/share application money of Rs. 1,11,00,000/- to M/s. Shrinivas Machine Crafts P. Ltd. on the ground that the said advance was for acquiring shares. He failed to appreciate that the advance was in furtherance of the business of the assessee. He also failed to appreciate the arguments and contentions advanced in this behalf. 2. The appellant craves leave to add, alter, delete or substitute all or any of the above grounds of appeal. 3. The brief facts of the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, shares were allotted which had not yielded any income, hence, the interest on the same was disallowed under section 36(1)(iii) of the Act and total disallowance of Rs. 22,36,000/- was made. 4. The CIT(A) upheld the interest expenditure relatable to two advances made by the assessee i.e. M/s. Bison India Ltd. and Shri Manoj Ambike. As regards the advance of Rs. 1,11,00,000/- to M/s. Shrinivas Machine Crafts Pvt. Ltd., the CIT(A) noted that the same was given for acquiring shares, which could not be considered as expenditure in the nature of business. Therefore, disallowance of interest expenditure relatable to the same was upheld. The CIT(A) restricted the disallowance to Rs. 15,47,000/-. 5. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the business advances and therefore, no disallowance of interest was called for. However, before us, the learned Authorized Representative for the assessee has raised a new plea that factually, there was no nexus between the borrowed funds and the advances made to the said parties. In support thereof, the assessee has furnished by way of additional evidence the bank statement showing working of bank account on the relevant dates of advances. The said evidences filed by the assessee are by way of additional evidence. However, since the additional evidence goes to the root of the issue, we admit the same and restore the issue back to the file of CIT(A) to adjudicate the issue after verifying the documents furnished b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s given by the assessee calling for information under section 133(6) of the Act, but no response was received. The assessee was asked to produce parties along with books of account for verification and in the absence of any information or production of parties, the creditors to the extent of Rs. 4,56,45,562/- remained unverified and were added as income of the assessee. 12. Before the CIT(A), the assessee did not press the said ground of appeal and the same was dismissed as not pressed. 13. The assessee however, before us has furnished an application for admission of the additional ground of appeal and also a request for admission of additional evidence, in this regard. The plea of the assessee before us wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of bank certificates for payment to the creditors, which were found to be non-genuine. However, in respect of the credits which have brought forward from the preceding year, the plea of the learned Authorized Representative for the assessee was that no addition was warranted. 15. The learned Departmental Representative for the Revenue placed reliance on the order of CIT(A). 16. We have heard the rival contentions and perused the record. The assessee by way of additional ground of appeal has raised an issue against the addition made on account of un-verifiable creditors totaling Rs. 4.56 crores. The assessee had raised the said issue before the CIT(A) vide ground of appeal No.2. From the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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