TaxTMI 
TaxTMI 
2010 (8) TMI 968
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....Learned CIT(A) erred in confirming the addition of Rs. 86,80,915/- on account of interest free loans and advances without considering the facts and circumstances. 1.2 Your appellant submits that your appellant has given the full explanation regarding non-charging of interest on the advances made to various parties. The Assessing Officer ought to have accepted the contention of your appellant regarding non-charging of interest and ought not to have added the sum of Rs. 86,80,915/-. 3. The assessee is a partnership firm. It is engaged in the business of dealing in import licenses. It is also an importer of various commodities. On perusal of the profit and loss account the AO noticed that the assessee had debited a sum of Rs. 86,80....
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....s borrowed were not utilized for the purpose of assessee's business, he therefore held as follows :- "Therefore, considering the above discussion, the material on record and the totality of the circumstances of the case, proportionate interest (calculated @ 12% of the outstanding balance) on the above advances needs to be disallowed from the interest paid by the assessee. This comes to Rs. 1,06,89,202/- .Since, the assessee has debited only an interest of Rs. 86,80,915/- which is less than the disallowable interest, whole of the interest payment of Rs. 86,80,915/- is being disallowed and added back to the total income of the assessee. For the reasons discussed supra, I am satisfied that the assessee has furnished inaccurate particu....
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....sessee were engaged in. Even availability of surplus funds for giving interest free loan has not been examined. With a view to give the assessee an opportunity to prove his case, we set aside the order of learned CIT(A) and remand the issue to the Assessing Officer for fresh consideration. The Assessing Officer will consider if the interest free loan is given out of commercial expediency and also verify if there were enough interest free surplus funds. The assessee will establish both the aforesaid aspects and the Assessing Officer will examine the claim of the assessee in accordance with law. 6. Ground No. 2 raised by the assessee reads as follows :- Addition on account of traveling expenses : Rs. 8,73,192/- 2.1 The le....
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....rned counsel for the assessee reiterated the submissions made by the Assessing Officer. He has not filed any evidence to show that foreign traveling expenses were incurred in connection with the business of the assessee. As rightly held by the Assessing Officer explanation and justification given by the assessee is very vague and it cannot be accepted in the absence of any reliable evidence. The burden lies on the assessee to establish that expenses claimed as deduction is wholly and exclusively incurred for the purpose of business of the Assessee. In these circumstances, we confirm the order of the learned CIT(A) and dismiss ground No. 2 raised by the assessee. 9. Ground No. 3 raised by the assessee reads as follows :- Addition....
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....treat the debt as bad. It is because the issue of recovery has to be seen from assessees' point of view. But, the appellant has to fulfill another requirement of the section i.e. the amount should have been shown as income in some assessment year. The appellant was asked to file details on this. The appellant only filed dates of bills of high seas purchases and sales. The appellant did not give any details to show whether the sales shown were part of income disclosed earlier or not. This is because the appellant is an indenting agent. Since, the appellant did not file any details as to when this amount was shown as income and since the same was also not filed before the Assessing Officer who have given the same as a reason for disallowing t....