TMI Blog2011 (12) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that assessee has made interest free advance of borrowed funds in arbitrary, unjust, unwarranted and at any rate very excessive by wrongly observing that books of the assessee are not proper and do not disclose its full and true income and as such are not reliable. (ii) That the sustaining of disallowance of business development expenses of ₹ 2,13,123/- by Ld. Commissioner of Income Tax (Appeals) is arbitrary, unjust, unwarranted and at nay rate very excessive by wrongly observing that books of the assessee are not proper and do not disclose its full and true income and as such are not reliable. (iii) That the sustaining of disallowance of telephone expenses of ₹ 2,05,123/- by Ld. Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red that assessee has no interest free funds available to the firm. He found that assessee has not been charging any interest on the advances given, as per the table below:- Opening balance Debit Credit Closing balance Interest forgone Indian paper and fertilizer (sister concern of the assessee with same address) 2,60,424 1,09,000 2,60,424 1,09,000 21,250 Jagdambay Builders Pvt. Ltd. 1,00,000 Nil Nil 1,00,000 12,500 Moza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee submitted that assessee has adequate interest free funds available with the firm which have been used to make the advances during the year. She claimed that no nexus has been established between the interest bearing fund and advances to sister concerns. We have carefully considered the submissions. We find that for making any disallowance in connection with the interest, it is incumbent upon the authorities below to give a finding with regard to the nexus between the interest bearing funds available with the firm and interest free advances made during the year. In our considered opinion, the interest of justice will be served, if the matter is remitted to the file of the Assessing Officer to consider the issue afresh. Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. 10. We have heard the rival contentions in light of the material produced and precedent relied upon. Ld. counsel of the assessee submitted that the authorities below have made the disallowances on estimate and adhoc basis. She claimed that no specific instances for non-business expenses have been brought on record. We have carefully considered the submissions. We find that Assessing Officer has made the disallowances in this regard on estimate basis and in making the disallowances Assessing Officer has not brought on record any specific instances that the vouchers are not maintained or the expenses are not related to the business of the assessee. Assessing Officer has made the disallowances of lumpsum 80% and 75 and Ld. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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