2012 (9) TMI 316

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.... circumstances of the case in adding an amount of Rs. 16,91, 537/- as Notional Interest @ 12% on Loans advanced to various parties being in violation of section 36(1)(iii) of Income-tax Act, 1961. The addition be deleted. 3. That the ld. CIT(A) has been unjustified in upholding the disallowance of Rs. 4,52,968/- on account of Non-deduction of tax at source in violation of Section 40(a)(ia) of Income-tax Act, 1961. The addition be deleted." 2. Ground No. 2 - After considering the rival submissions we find that during assessment proceedings the Assessing Officer noted that the assessee had made interest free advances to following six parties:- Name Amount Date of payment Shri Ashok Anand Rs. 25,00,000 27.2.2004 Mrs. Raj Rani Anand Rs. 2....

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....r hand, the ld. DR for the revenue submitted that copy of sale deed filed before the Tribunal regarding purchase of land was never furnished before the Assessing Officer or the ld. CIT(A) and no application for admission of additional evidence has been filed, therefore, same should be ignored. In any case after the insertion of proviso to section 36(1)(iii) of the Act w.e.f. 1.4.2004 by Finance Act, 2003 even interest paid on account of capital borrowed for acquisition of capital asset is not allowable. 6. We have heard the rival submissions carefully and find force in the submissions of the ld. DR for the revenue. Proviso to section 36(1)(iii) which was amended by Finance Act, 2003 reads as under:- "36(1)(iii) - the amount of the int....