TMI Blog2019 (11) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, a summary sheet reflecting the date of receipt of amount and the date of payment for flat is also submitted by the assessee. From the records it can be seen that the assessee had applied the fees amount towards the purchase of flat as per the terms agreed upon. It can further emerges from the records that the assessee had duly offered such receipt amount to its income on cash basis in accordance with its method of accounting which is also evident from the ledger accounts of such parties. CIT(A) was not right in sustaining the addition in respect of interest incurred on account of amount standing as advance in respect of interest incurred on account of amount standing as advance in respect of such parties. Therefore, the order of the CIT(A) is set aside. Ground No. 2(i) and 2(iii) are allowed. Addition on account of Vehicle Repair and maintenance - AR submitted that it is settled law that if the Assessing Officer has not pointed out any specific defect in the books of the assessee, and has not even pointed out the specific instances where the expenses have been incurred by the assessee for personal purposes, ad-hoc disallowance made by the Assessing Officer without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses have been incurred wholly and exclusively for the purposes of business only. 3. The assessee firm is engaged in the business of providing architectural services for housing and commercial projects. During the year under consideration, the assessee derived income from business or profession. The assessee filed its return of income on 28/09/2013, declaring total income at ₹ 2,37,36,341/-. Subsequently, the case was selected for scrutiny under CASS. Notice u/s 143(2) was issued and served upon the assessee within the stipulated period. Again notice u/s 142(1) along with detailed questionnaire was issued to the assessee. In response to the notices, Chartered Accountant/Authorised Representative of the assessee attended the assessment proceedings from time to time and filed necessary details, information/documents etc as required. Books of accounts and vouchers were produced during the course of assessment proceedings which were examined on test check basis. The income of the assessee is recomputed as under:- S. No. Particulars (Amount in 7) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with ABN Amro Bank which became the Royal Bank of Scotland which are reflected in the ledger accounts. The party wise interest paid listing placed in the paper book also reveals that no interest was paid to such bank. The Ld. AR further submitted that the said bank account is reflecting under the head current assets in the balance sheet. The Ld. AR submitted that it is not a case of the assessee that it had not applied for the flat itself. It is the case of the assessee that the assessee had to apply for the flat as a measure of commercial expediency in order to recover the fees amount. It was mutually agreed between the assessee and the respective parties that the payment for fees will be made subject to the condition that the assessee applies for allotment of flat. Thus, assessee had to apply for allotment of flat as a measure of commercial expediency. The ledger account of such parties where in the receipt of money is reflecting was also placed on record. Further, a summary sheet reflecting the date of receipt of amount and the date of payment for flat is also submitted by the assessee. The Ld. AR submitted that perusal of the same reveals that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. AR submitted that the disallowance made, deserves to be deleted. The Ld. AR further submitted that the balance sheet of the assessee reveals that it has its own funds to the tune of ₹ 56,73,773. Thus, no disallowance can be made to the extent of such amount advanced (Interest of ₹ 6,80,853) in view of the recent judgement of the Hon ble Supreme Court in case of CIT vs. Reliance Industries Ltd. (2019) 410 ITR 466 (SC) wherein it has been held that where the interest free funds are available with the assessee, it could be presumed that the investments were first made from the interest free funds available with the assessee. The Ld. AR relied upon the following decisions: 1. Punjab Stainless Steel Inds. Vs. ACIT (2019) (6) TMI 427 Tri. Del. 2. CIT vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom. HC) 3. CIT vs. Amod Stamping (P.) Ltd. (2014) 223 Taxman 256 (Guj. HC) 4. PCIT vs. Consumer Marketing (India)(P.) Ltd. (ITA No. 646 of 2015 Guj. HC) 5. M/s R. N. Gupta Co. Ltd. vs. Addl.CIT (ITA No. 848/Chd/2015 dated 12.04.2016 Tri. Chandigarh) In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonal purposes, ad-hoc disallowance made by the Assessing Officer without any basis could not be upheld. The Ld. AR relied upon the following decisions: 1. DCIT vs. Grintex India Ltd. (ITA No. 4622/Del/2016 Del. Tri.) 2. ACIT vs. Amtek Auto Ltd. (2006) 112 TTJ 455 3. M/s Nine Dot Nine Mediawork Pvt. Ltd. vs. ITO (ITA No. 1262 863/Del/2016 dated 30.07.2018 Del. Tri.) 4. Dhir Dhir Associates vs. ACIT (ITA No. 2169/Del/2014 dated 16.06.2017 Del. Tri.) 5. Sh. Gagan Goyal vs. JCIT (ITA No. 1514/Del/2015 dated 02.08.2016 Del. Tri.) 6. ACIT vs. Precision Pipes Profiles Co. Ltd. (ITA No. 4257 4258/Del/2012 dated 12.10.2012 Del. Tri.) 7. DCIT vs. FCB Ulka Advertising Pvt. Ltd. (ITA No. 5404/Mum/2007 dated 21.05.2014 Mum. Tri.) Thus, the Ld. AR prayed that the addition deserves to be deleted. 11. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 12. We have heard both the parties and perused all the relevant material available on record. From the perusal of records it can be se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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