2014 (5) TMI 266

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....ppellant is partnership firm and engaged in cotton ginning & pressing. It had filed its E- return of income for A.Y.2009-10 on 25.9.2009 declaring total income of Rs.9,63,830. 2.2 During the course of asstt. proceedings, the AO noticed that the appellant had made huge borrowings of Rs. 10,24,74,918 from partners, Banks and others on which it had paid interest of Rs. 1,24,21,473 but it had not charged any interest on the loans & advances totaling to Rs, 3,72,11,407. The average rate of interest worked out at 12% so that interest of Rs. 44,65,368 on said loans & advances was worked out. The appellant had explained that since M/S Om Kailash Cotton and appellant firm had interest free sharfi dealings and common partners who were assessed at ....

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....ce of Rs. 3,19,20,625 (see page.25) (ii) there was a huge turnover and gross profit of Rs.2,33,89,836 and net profit of Rs. 33,24,557. (page- 19).(Refer to Woolcomers of India Ltd (134 ITR 219)(Cal) (b) there was a opening balance of Rs. 69,18,863 (seepage-31) and in past no disallowance was made so that it was covered by case of Sridev Enterprise ( 192 ITR 165) Now the interest thereon worked out to Rs. 8,30,263 which was not disallowable. 2.6 The applicant most respectfully submits that Hon'ble Tribunal has not considered at all the above said contentions of the applicant. It has considered the contention raised before the first appellate authority only i.e. tax effect of disallowance in the hands of the appellant and its par....