TaxTMI 
TaxTMI 
2017 (4) TMI 610
X X X X Extracts X X X X
X X X X Extracts X X X X
.... referred to as "CIT(A)"] erred in confirming the following additions and disallowances made by the Ld. Assessing Officer without appreciating the facts and circumstances of the case: Sr. No. Particulars Amount (Rs.) A Disallowance of interest paid from personal Account for Business purpose. 27,63,587 B Disallowance of Bank charges charged by Bank on O/D. 1,32,259 C Disallowance of 10% of the expenses debited to P&L Account of M/s.M.K.Sons Jewellers. 44,955 D Disallowance of 10% of the expenses debited to P&L Account of M/s.Kush India Commodities. 5,281 A. Disallowance of interest paid of Rs. 27,63,587/- from personal Account The Ld. CIT(A) erred in confirming the addition of Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are reflected in his personal balance sheet. The Assessing Officer held that this not being related to business purposes cannot be allowed and he made addition of Rs. 27,63,587/-. 5. Before the learned CIT(A), the learned counsel for the appellant claimed that it is not easy to get loans for the proprietary concern dealing in commodities on MCX which is the business of Kush India Commodities. Therefore, the proprietor has taken loans in his personal name and transferred the same to the proprietary concern which can be seen from the capital account of the proprietary concern. He further submitted that the bank statement reflects the loan account borrowed by the assessee in individual capacity which were transferred to proprietorship conce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ily why the loans could not be raised directly in the proprietary concern where interest has been claimed. Further, he could not prove that interest bearing funds have not gone into the investments in personal assets. In the absence of any evidence, the claim of the assessee that the loans taken have been used only for business and consequently the interest paid on these loans has to be allowed as business expenditure cannot be accepted. The cases relied upon by the Ld. Counsel for the appellant are not applicable as the facts are different. In the case of Smt. Suman Jain, it was proved that the loan amount borrowed by the assessee in individual capacity for earning profit from M/s. Sandip Enterprises. But in the present case, there is no p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Hence adverse inference drawn by the authorities below is not also sustainable on this issue. It is not the case of the revenue that interest free funds were not sufficient to meet the amount spent on acquisition of other assets. Hence attribution of the authorities below that interest bearing funds were not used for business purpose cannot be sustained. Accordingly, I set aside the order of the authorities below and decide the issue in favour of the assessee. Apropos Ground No. C&D:- 8. On both the issues the Assessing Officer has made 15% disallowance out of various expenses debited in Profit & Loss Account. This was done by the Assessing Officer on the ground that all the expenditures were not supported by complete expenditure bill....