TMI Blog2018 (10) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... y of funds interest free is sufficient to cover up a small interest free loan of ₹ 16 lacs given to sister concern. Additions for the business purpose relating to furniture and fixtures and commercial expediencies - Held that:- Assessing Officer also ignored the loans and advances given to the sister concern. Therefore, this needs to be verified and therefore, we remand back this issue to the file of the Assessing Officer to adjudicate upon it as per the evidence produced before the Assessing Officer by the assessee. Needless to say, the assessee be given opportunity of hearing by following principals of natural justice. AO as well as the CIT(A) has not taken the cognizance of the evidence produced before the Assessing Officer more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of Ld. AO in making disallowance of ₹ 65,250/- on account of pro-rate interest on loan u/s 36(i)(iii) of the Income Tax Act., 1961. 4. That having regard to the facts and circumstances of the case, Ld. C1T(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of ₹ 20,89,100/- on account of short term capital gain arising on sale of land. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment in violation of principles of natural justice and by recording incorrect facts and findings and without providing adequate opportunity of hearing. 3. The assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces to sister concerns. Thus, the Ld. AR submitted that all these amounts were interest free advances and, therefore, the Assessing Officer was incorrect in making disallowance of ₹ 65,250/- on account of pro rata interest on loan u/s 36(i) (iii) of the Act. As regards Ground No. 4, the Ld. AR submitted that the assessee sold its business as slump sale to SPJ Textiles Pvt. Ltd on 2/7/2007 for the consideration of ₹ 3,89,84,198.86/-. The balance sheet of the assessee as on 2/7/2007 containing land measuring 2 acre, 2 karnal, 15 marlas as asset which was duly reflected in Schedule of fixed assets of the balance sheet. The Assessing Officer as well as the CIT (A) has not verified these details. Therefore, the Ld. AR requested that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of money was lying in the capitalof the partners and the profit earned during the relevant assessment year itself was approximately ₹ 1.19 crores. Therefore, such an availability of funds interest free is sufficient to cover up a small interest free loan of ₹ 16 lacs given to sister concern. Accordingly, the disallowance of ₹ 1,14,777/- is deleted. In the result appeal of the assessee is allowed. Since, the issue is identical in present assessment year as well, the same is covered in assessee s own case against the assessee. Therefore, Ground No. 1 2 are dismissed. 8. As regards Ground No.3, the Assessing Officer as well as the CIT(A) has not looked into the aspect of the additions for the business purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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