TMI Blog2020 (4) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... these are purchase advances have not at all been proved. Furthermore, assessee itself started charging interest on these loans in subsequent years. Hence, order for A.Y. 2010-11 is duly sustained. For A.Y. 2013-14 also position is similar. No evidence whatsoever of subsequent purchases have been produced. Hence, claim that these parties are purchase advances is not at all proved. Furthermore, for a part plea of interest free advances is not sustainable on the same basis as in the earlier year as sundry creditors for goods and expenses cannot be claimed to be interest free funds available with the assessee. More so, as sundry debtors are much more than this. However, the assessee s plea of partner s current capital for A.Y. 2013-14 to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case and in law, the learned C.I.T.(A) erred in confirming the disallowance of interest of ₹ 3,14,075/- u/s. 36(l)(iii) of the Income Tax Act 1961. ii) On the facts and in the circumstances of the case and in law, the learned C.I.T.(A) erred confirming the disallowance on the ground that the Assessing Officer was justified in holding that the appellant had no interest free funds out of which the appellant could give interest free loans of ₹ 25,46,000/-. iii) On the facts and in the circumstances of. the case and in law, the learned C.I.T.(A) erred in confirming the findings of the Assessing Officer that the appellant failed to prove that it had interest free fund of ₹ 2,10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans. However, the Assessing Officer was not satisfied. He asked the assessee to furnish fund-flow statement to show nexus of deployment of interest free funds for extending advances to the following parties :- i) Virendra Sutaria ₹ 16,36,000 ii) Virendra Sutaria (HUF) ₹ 5,00,000 iii) Pratibha Sutaria ₹ 2,50,000 iv) Rajan Gupta ₹ 1,60,000 Assessing Officer observed that the above funds were claimed to be business advances. However, the assessee failed to furnish any evidence in this regard. 6. Assessing Officer rejected the assessee s submission that sundry creditor for goods amounting to ₹ 2,05,06,270/- and sundry creditors for expenses of ₹ 5,20,618/- can be claimed to be int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Partners fixed capital ₹ 50,000 Current capital ₹ 43,97,689 ₹ 6,75,15,353 9. Regarding claim of the assessee that the above said parties were given advances for purchases, the Assessing Officer rejected the claim of purchase advances to Shri Arun Doshi, HUF on the ground that the same is a HUF of the partner of the assessee firm. He further noted that none of the above four parties have supplied goods to the assessee. No other documentary evidence regarding advances being purchase advances were produced. Regarding payment of ₹ 1,31,82,765/- for Shri Kairav A. Doshi, assessee stated that he i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchase advances have not at all been proved. Furthermore, assessee itself started charging interest on these loans in subsequent years. Hence, order for A.Y. 2010-11 is duly sustained. 14. For A.Y. 2013-14 also position is similar. No evidence whatsoever of subsequent purchases have been produced. Hence, claim that these parties are purchase advances is not at all proved. Furthermore, for a part plea of interest free advances is not sustainable on the same basis as in the earlier year as sundry creditors for goods and expenses cannot be claimed to be interest free funds available with the assessee. More so, as sundry debtors are much more than this. However, the assessee s plea of partner s current capital for A.Y. 2013-14 to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X
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