9911796707
TMI Blog2019 (2) TMI 2004X X X X Extracts X X X X X X X X Extracts X X X X ..... uently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 24th August, 2011. Further facts of the case are discussed under the two grounds of appeals filed by the assesee as under:- Disallowance of Rs. 16,27,820/- u/s. 36(i)(iii) of the act 3. During the assessment, the assessing officer noticed that assessee has made loan and advances to the amount of Rs. 78,47,5,019/- to various parties. Out of the aforesaid advances an amount of Rs. 19,85,5,747/- was given to the following two parties:- Shraddha Intl. Rs. 29,92,179/- Specific Food Inc. Rs. 1,68,63,587/- ---------------------- Rs. 1,98,55,747/- ---------------------- The assessee has provided advance to the amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fabric Pvt. Ltd. (Sr. No. 10) - Rs. 14,56.000/- > Sainaih Hnterprises (Sr. No. 13) - Rs. 22,00,000/- Total Rs. 3,99,89,321/- Underlying advances are "business advances: * At the outset, the advances in question air related to the business of the assessee and have been made out of commercial expediency. Such fact was categorically pointed out before AO and the same has not been denied by either of the lower authorities. Under such circumstances, no disallowance can be made u/s 36(l)(iii) in respect of such advances. Reliance is placed on "S.A. Builders vs. CIT - 288 ITR 1 (SC)". Major component of interest expenses represents interest on loans taken for specific business purpose: * It is further submitted that major component, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance deserves to be deleted." On the other hand ld. departmental representative has placed reliance on the decision of ld. CIT(A). 5. We have heard both the sides and perused the maternal on record carefully. In respect of outstanding advance of Rs. 3.63 crores to M/s. Bajaj Herbal Pvt. Ltd the sister concern of the assessee, the ld. CIT(A) stated that the assessee had mentioned that advance was given for the property named Sarthik (405) but no details were submitted to substantiate the fact. Therefore the ld. CIT(A) held that claim of interest u/s. 36(i)(iii) of the act was not for the purpose of the business of the assessee. In respect of advance of Rs. 22 lacs to M/s Sarnath Enterprise the ld. CIT (A) stated that it was claimed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer to decide de-novo on the points (i) and (ii) as above after affording adequate opportunity to the assessee. Accordingly this ground of the appeal is restored to the file of the assessing officer for deciding afresh as directed above. Therefore this ground of appeal of the assessee is allowed for statistical purpose. 7. 4th ground of appeal of the assessee of addition of Rs. 2,86,427/- made on account of exchange rate of difference:- We noticed that the assessee had not filed the impugned ground of appeal before the ld. CIT(A). We have also gone through the form No. 35 filed before the ld. CIT(A) and noticed that neither such ground of appeal reflected in the form No. 35 nor such ground of appeal was adjudicated by the Ld.CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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