TMI Blog2021 (6) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... ments, it should be considered that investments have been made out of interest free funds. Accordingly, the interest disallowance is not called for in the present case.. Even though the A.O. has observed that the Ld. A.R. has accepted for the addition of interest expenditure, the said observation is being disputed now before us. In any case, the decision rendered by Hon'ble Bombay High Court supports the case of the assessee. - Decided in favour of assessee. Ad hoc disallowance of other expenses - AO made ad hoc disallowance of 25% of the aggregate amount of expenses - HELD THAT:- Admittedly, the assessee did not furnish evidences in support of the claim of various expenses before the A.O. As pointed out by Ld. D.R., we also notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following disallowances made by the A.O. a) Disallowance made out of interest expenses b) Ad hoc disallowance made out of other expenses. 2. The facts relating to the case are stated in brief. The assessee is engaged in the business of manufacturing of alloy steel cast grinding media balls. The assessee filed its return of income for the year under consideration declaring a total income of ₹ 5.09 crores. The AO completed the assessee by making above said disallowances and the same was also upheld by Ld. CIT(A). 3. The first issue relates to disallowance made out of interest expenses. The A.O. noticed that the assessee has advanced a sum of ₹ 87.30 crores to Shri V.P. Yakob and Others for the purpose of purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s having own funds of ₹ 416.53 crores while the interest free advance given to V.P. Yakob and Others was only ₹ 87.30 crores. Accordingly, the Ld. A.R. submitted that the interest disallowance is not called for in the facts of the present case. 5. On the contrary, the Ld. D.R. submitted that the assessee has not proved the nexus between the interest free advances and the business carried on by the assessee. Further, the assessee has accepted the addition before the A.O. and hence, the assessee is precluded from contesting this addition. 6. In the rejoinder, the Ld. A.R. submitted that it is the case of the assessee that it has not accepted for the addition before the A.O. and further, the assessee is willing to furnish an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 96.95 crores under various heads as deduction. The A.O. accordingly made ad hoc disallowance of 25% of the aggregate amount of expenses and the disallowance worked out to ₹ 24.23 crores. The Ld. CIT(A) also confirmed the same. 10. The Ld. A.R. submitted that the assessee could not furnish the details, vouchers, etc., before the A.O., since the operations of the company were almost closed. The Ld. A.R. further submitted that the assessee has furnished details of expenses along with sample vouchers as additional evidences and accordingly she prayed that the additional evidences may be admitted and the issue may be restored to the file of the A.O. for examining it afresh. 11. The ld. D.R., on the contrary, strongly objecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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