9911796707
TMI Blog2008 (9) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... rk Credit & (P) Ltd. against which the assessee did not paying interest to the said concern. 3. The facts emerged from the record in respect of ground No. 1, are that while doing the scrutiny assessment the AO has observed that the assessee has debited its interest account worth Rs. 1,79,640. According to the AO, the assessee has not utilised the entire loan for the purpose of business. He was of prima facie opinion that the claim of interest not relating to the business is not allowable as deduction. On query, the assessee has submitted the following submissions: "Regarding interest of Rs. 1,79,640 we have taken loan from M/s UMIL Shares & Stock Broking Services Ltd., out of the total loan taken, Rs. 10 lacs is opening balance and Rs. 15 lacs has been taken during the year. The xerox copy of loan confirmation is enclosed. Further, we want to inform you that our company was engaged in the business of mobile trading and NBFC activity, for both the activities funds are required as working capital. Therefore, the company has taken loan for the purpose of running the business of mobile trading and NBFC activity so interest debited in P&L a/c has been incurred for the purpose of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. 5. At the time of hearing before us, learned Departmental Representative has heavily relied on the order of the AO and read out the observations made by him in the assessment order which was mentioned in the preceding paras. Based on these observations he contended that the action of the AO may be upheld. 6. On the other hand, the learned counsel for the assessee has reiterated the submissions as made before the Revenue authorities and further filed a copy of the account of M/s UMIL Shares & Stock Broking Services Ltd. reflecting the transactions made during the year: --------------------------------------------------------------- "Date Particulars Amount Date Particulars Amount --------------------------------------------------------------- 1-4-04 To balance 10,00,000 brought forward --------------------------------------------------------------- 14-5-04 To cheque No. 15,00,000 22-9-04 By Ch. No. 3,50,000 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 071436/ 041463 dt. 8-12-2004 --------------------------------------------------------------- 31-3-05 By balance 5,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese companies are covered under non-banking companies and the loans/advances have been given in the course of ordinary business. On appeal, the learned CIT(A) has deleted the same by observing that the case of the assessee is protected by the exception of s. 2(22)(e) of the IT Act, 1961. Aggrieved by this the Department is now in appeal before us. 9. At the time of hearing before us the learned Departmental Representative has heavily relied on the order of the AO. 10. On the other hand, the learned counsel for the assessee has brought to the notice of the Bench regarding the transactions entered by the assessee with M/s Perk Credit & Properties (P) Ltd. which are appearing at p. 5 of the impugned order which are as under: ---------------------------------------------------- Perk Credit & Properties (P) Ltd. (Loan account) ---------------------------------------------------- Dr. Cr. ------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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