TMI Blog2016 (8) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... on fixed deposits than the interest paid by him on interest bearing funds. In view of the facts and circumstances, it cannot be said that assessee had deployed interest bearing funds into non interest bearing investments. Assessee is a sole proprietor of M/s Modern Publishers and is also a majority shareholders in the companies in which interest free investments has been made. Paper Book page 12 is the list of companies in which the assessee is a holding a major chunk of shares. The rest of the shares are also held by other family members of the assessee. From the above chart it can be safely concluded that assessee is a major shareholder and therefore the advances/investments made by assessee in these companies cannot be said to be w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 2,39,01,531/- as expenses in its P L Account and therefore, assessee was show caused as to why the disallowance of this amount be not made u/s 36(1)(iii) of the Act. 4. The assessee in reply submitted that the said amount has been invested in the group companies in the larger interest of assessee for business expediency and therefore, the disallowance was not called for. However, the Assessing Officer was not satisfied with the reply and relying on the decision of Hon ble Punjab and Haryana High Court in the case of CIT Vs. Abhishek Industries 286 ITR made the disallowance u/s 36(1)(iii) of the Act. 5. Aggrieved the assessee filed appeal before learned CIT(A) and learned CIT(A) also did not agree with the contentions of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a majority shareholder in all the invest companies and these investments were made keeping in view the commercial expediency. 8. Without prejudice it was submitted that the learned CIT(A)has relied upon the judgment of M/s Bright Enterprises Pvt. Ltd .(supra), which has been reversed by the Hon ble Punjab Haryana High Court reported in 381 ITR 107. The learned AR further submitted that in the case of Group Company M/s MBD Printographics Pvt. Ltd. for Asst. Year 2010-11, similar issue has been decided in favour of assessee and our attention was invited to the order passed by the Amritsar Bench in ITA No.534(Asr)/2014 placed at (PB page 42 to 57). In view of the above facts and circumstances, it was prayed that the addition mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not necessary that the advance results in a positive tangible benefit. So long, as the amount is advanced with that view in mind or with any other commercially expedient view in mind that is sufficient. 11. Further we find that the judgment in the case of Abhishek Industries (supra) relied upon by both the Authorities below has also been the overruled by the Hon ble Supreme Court in the case of Hero Cycles vs. CIT 379 ITR 247 (SC), in favour of the assessee by holding as follows: Company had reverse/surplus to the tune of almost 15 cores and, therefore, assessee company could in any case, utilize those funds for giving advance to its directors-Order of the High Court set aside and order of the ITAT was restored-Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the companies in which interest free investments has been made. Paper Book page 12 is the list of companies in which the assessee is a holding a major chunk of shares. The rest of the shares are also held by other family members of the assessee. For the sake of convenience, the chart showing shareholding of assessee in the companies has been made part of this order. Therefore, from the above chart it can be safely concluded that assessee is a major shareholder and therefore the advances/investments made by assessee in these companies cannot be said to be without commercial expediency. There would be a direct benefit to the assessee if the interest free investments made in these companies results into more profits to these companies an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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