2004 (6) TMI 303

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....der. So, these are being disposed of by this common order for the sake of convenience. 2. The only point in dispute in both the appeals is with regard to disallowance of interest paid on borrowals were disallowed in view of the interest-free advances made to relatives and friends of the partners of the firm. In asst. yr. 1990-91, the disallowance was Rs. 63,600 and in asst. yr. 1991-92 it was 6....

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....e same plea as it was raised before the learned CIT(A) and has taken only one effective ground of appeal. All other grounds of appeal are in the arguments only. 3. We have heard the rival submissions and have perused the evidence on record. 4. The learned CIT(A) held that it is settled principle that if a firm has non-interest bearing funds in excess of interest-bearing advances, then also n....

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....should exist some nexus between interest-bearing loans and interest-free advances to disallow interest in such cases. 5. The learned CIT(A) has also not decided by passing a speaking order in relation to the claim of the assessee that these loans were not advanced during the period relevant for assessment year under consideration. In the case of one advance and in relation to second advance it ....