TaxTMI 
TaxTMI 
2015 (10) TMI 1064
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.... Rs. 33,21,286/- against sale of Rs. 38,10,515/- from Noida Unit (A-63, Sector-5, Noida) is clearly on the higher side, when all the manufacturing takes place at Noida only. (ii) On the facts and in the circumstances of the case, the Ld. CIT (A) had erred in deleting addition of Rs. 4,17,780/- on the account of interest disallowed by the Assessing Officer u/s 36(1) (iii) of the IT Act even when interest free loan of Rs. 32,30,000/- advance to 6 parties as per order of Assessing Officer and no commercial expediency is established in advancing such interest free loan to various parties. (iii) The appellant craves leave to add, allow or amend any or all the ground of appeal before or during the course of hearing of the appeal." 2. Brief fac....
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....en that there is possibility of sale out of the books. 4. CIT (A) found merit in the argument of assessee and deleted the addition by following observations: "8. I have carefully considered the submissions of the appellant, the observations made by the Assessing Officer in the assessment order and the facts of the case. As far as the electricity bills not being in the name of the appellant and being in the name of Sh. Shyamkamal Graphic Ltd. is concerned, it is seen that the appellant had filed a copy of the transfer memorandum before the Assessing Officer to show that the factory premises of the appellant had been purchased from Sh. Shyamkamal Graphic Ltd. in the name of M/s Bhimeshwary Industries, a unit of the appellant. As the factory....
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....made by the Assessing Officer out of power and fuel expenses amounting to Rs. 8,32,821/- is deleted being arbitrary." 5. Apropos second issue, assessee claimed interest and bank charges amounting to Rs. 17,46,377/- on the bank accounts. The Assessing Officer found that assessee had advances interest free loans to related parties amounting to Rs. 32,30,000/-. The Assessing Officer was of the view that the borrowed funds have been diverted to related parties as interest free advances. A proportionate disallowance of Rs. 4,17,780/- was made. In first appeal assessee contended that Assessing Officer had failed to appreciate its explanation that assessee apart from bank loans had also raised interest free loans from various other parties amount....
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....r hand contends that apropos the first issue factually it has been demonstrated that Assessing Officer made a clear mistake in ignoring the head office sales, while disallowing 25% on ad-hoc electricity expenses besides there is no evidence whatsoever on record to suggest any sale order of CIT (A) is relied on. Apropos second issue, Ld. Counsel for the assessee relied on Hon'ble Supreme Court in the case of S.A Builders reported in 288 ITR 01 and Hon'ble High Court in the cases of Bharti Televenture reported in 331 ITR 502 for the proposition that in case when assessee had more interest free fund available to it then no disallowance qua the interest free lending to associated concern can be made. Similarly, the business expediency is to be ....