2014 (4) TMI 969

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....parkar, Adv. JUDGMENT (Per : Honourable Ms. Justice Sonia Gokani) 1. Both the tax appeals (for A.Y. 2003-2004 and A.Y. 2004-2005) essentially concern identical question of fact and law and hence, are decided by a common order. The facts and other details are taken for the purpose of adjudication from Tax Appeal No.756/2013. 2. Following is the substantial question of law raised for our....

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....assessee had borrowed the amount through out the year under the banner of business necessity and also noted the purchases and the sales patterns of the assessee and held that the funds borrowed were utilised for purposes other than business. It further noted that the assessee had advanced money to close relaives/ sister concerns without charging the interest. Accordingly, the Assessing Officer dis....

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....e pattern of investment, loans and advances as also considering the fixed assets and cash noted that there was no fresh borrowing in the year under consideration and already borrowed funds had reduced from Rs1953 lakhs to Rs.1239 lakhs. This substantial reduction led the tribunal to note that it would not be possible to hold that the borrowed funds were not used for business purpose merely because....

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....ect to the interest free advances made available to the partners, tribunal has rightly held that Rs.97.26 lakhs interest free advance were made whereas the assessee had interest free fund to the tune of Rs.95.80 lakhs available with it and therefore, only for the remaining sum of Rs.1.46 lakhs, it had confirmed the disallowance of the interest. 12. On both the aspects, based on the materials av....