9911796707
TMI Blog2018 (8) TMI 2116X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Facts of the case, in brief, are that the assessee is a company and filed its return of income on 29.09.2014 declaring Nil income. During the course of assessment proceedings, the Assessing Officer observed from the audited accounts for the year under consideration that the assessee company has debited interest on unsecured loan of Rs.7,69,096/- on the loans and advances received of Rs.7,00,68,520/-. He further observed that the assessee has received interest of Rs.2,30,068/- on loans & advances but not charged interest from others and related parties. He observed from the Balance Sheet that the assessee has shown interest free loans and advances given at Rs.9,03,07,449/-. He, therefore, asked the assessee to justify the huge interest ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans and advances of Rs.9,03,07,449/-, receiving interest of Rs.2,30,068/- on such advances. Ld. AR has sought to justify the same on account of commercial expediency. But Revenue cannot be oblivious to the fact of wholly exclusively laying out of the capital for business. The assessee has to furnish relevant detains which has not been done. In absence of assessee not discharging onus before the A.O. as also this office, the action of the A.O. appears to be correct and in tune with section 37 of the I.T. Act, 1961." 5. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal. 6. The ld. counsel for the assessee, at the outset, drew the attention of the Bench to page 6 of the order of the ld. CIT(A) and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced in the preceding paragraph. It is the submission of the ld. counsel for the assessee that since the net owned funds of the assessee company is much more than the interest free funds advanced to sister concerns and others, therefore, no disallowance is called for u/s 36(1)(iii). I find some force in the above argument of the ld. counsel for the assessee. It is an admitted fact that nothing has been brought on record that any specific interest bearing borrowed funds has been diverted by the assessee to the related parties from whom no interest has been charged. Since the net owned funds of the assessee company in the instant case is much more than the interest free advances given to related parties and since the Revenue has not brought o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
