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TMI Blog2019 (3) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... partly sustained the additions out of Rs. 19,95,638/- of notional interest on advance given for business exigencies and that the appellant is not in the business of money lending, which is contrary to facts and law. 2. The Ld. CIT(A) missed to note that the funds advanced was not given from cash credit account and that the funds are own funds of the appellant. 3. The notional interest disallowed by Ld. CIT(A) was true and legitimate 4. That the impugned order is bad in law and not in consonance with facts, and against the principles of natural justice. 5. Besides the above grounds the appellant craves leave to add, alter, amend, and / or to modify any grounds of appeal, if necessary. 2. The brief facts of the case are that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eto, the assessee Vide his submission dated 10/05/2016 sought reasons for re-opening the case. The same was provided to the assessee vide letter dated 10/05/2016. Thereafter, notice u/s 143(2) of the Act was issued on 16/12/2016 and Notice u/s 142(1) was issued to the assessee on 04/08/2016. In response to the same, the assessee attended the case on 06/12/2016. The case has been discussed in details with respect to disallowance of proportionate interest. The assessee orally explains that the assessee-firm had sufficient capital in its books. Out of which the advance was given to the said firm. However, the assessee-firm could not furnish any documentary evidence in support of its claim. Again, a notice u/s 142(1) of the Act dated 15/12/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages 1-13 in which he has attached the copy of written submission dated 03.1.2018 and copy of financial statements. 4. On the other hand, Ld. DR relied upon the orders of the authorities below and stated that they have passed well reasoned orders, which do not need any interference and needs to be upheld. 5. I have heard both the parties and perused the records especially the impugned order and the rival submissions, I note that the sole issue involved in this appeal is relating to disallowance of notional interest by the AO of Rs. 19,95,638/- on interest free advance given by the Assessee to its sister concern M/s Dashmesh Steel Hypermart during the relevant period. It is further noted that the funds advances to M/s Dashmesh Steel Hyper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion vs. CIT 298 ITR 298(SC). Therefore, considering the above decisions, the contention of the Assessee that no disallowance of interest was called for as it had non-interest bearing funds available in its capital account was not found to be justified by the Ld. CIT(A). However as pointed out by the AO, the Assessee had only funds to the extent of Rs. 1,02,54,062/- as on 31/03/2QJ0 in the partner's Capital account, therefore only to this extent it can be considered that non-interest bearing funds were available, accordingly on balance funds (Rs 3,43,00,000/- less Rs. 1,02,54,062/-) the disallowance of interest was valid. Therefore, the AO was rightly directed to recompute the disallowance of interest by the Ld. CIT(A), which does not need ..... X X X X Extracts X X X X X X X X Extracts X X X X
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