TaxTMI 
TaxTMI 
2017 (5) TMI 352
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....eating the expenditure of Rs. 2,81,000/- in the shape of commission/brokerage, as capital in nature. 2. In respect of the disallowance of Rs. 12,60,378/- made by the Assessing Officer u/s.269SS and 269T, the Ld.CIT(A) has erred, in observing that the transactions amounting to Rs. 12,60,378/- were in the nature of interest free loans and advances paid to the Director, and in further holding that the provisions of Section 269SS and 269T are applicable. 3. The Ld.CIT(A) has erred in dismissing ground No.2 4. The Ld.CIT(A) has erred in not adjudicating the grievances raised in ground No.II of the appeal of the assessee. The said ground is reproduced below : "Ground No.II Disallowance of Current Account Transactions between the Di....
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....ficer is justified. 8. The appellant prays to add, delete or amend any of the above grounds." 3. The Ld. Authorised Representative for the assessee at the outset pointed out that grounds of appeal No. 4, 5 and 6 are not pressed and hence the same are dismissed as 'not pressed'. 4. The issue in ground of appeal No.1 raised by the assessee is against claim of deduction on account of commission/brokerage paid of Rs. 2,81,000/- against hiring of showroom. The Ld. Authorised Representative for the assessee referred to the lease deed placed from page 55 onwards for leasing the showroom by the assessee on monthly rent. He further pointed out that the commission was paid to the agent who had secured the deal. He further pointed out that the c....
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..... . . . . In the present case, it is undisputed fact that the transactions were not towards the business purposes but were in the nature of interest free loan and advances paid to the director. Therefore on consideration of the entire facts and circumstances of the case, it is held that the provision of sections 269SS and 269T are squarely applicable in the present case." 8. We find no merit in the said approach adopted by the CIT(A) upholding the addition in the hands of assessee that the provisions of section 269SS and 269T of the Act are to be applied in making the aforesaid disallowance. As per the provisions of section 271D and 271E of the Act, for any default under section 269SS and 269T of the Act, penalty is leviable. However, suc....
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....hat the assessee had sufficient own funds and reserves and surplus, to take care of the said advances and hence no merit in the said disallowance. 12. The Ld. Departmental Representative for the Revenue on the other hand placed reliance on the order of the CIT(A) with special reference to Para No.7. 13. We have heard the rival contentions and perused the record. The assessee has placed the copy of the balance sheet on record and has also placed the list of advances made by the assessee during the year under consideration which is placed at page 200 of the paper book. The perusal of the said list reflects that the assessee had opening balance against several parties and most of these loans were repaid by the said parties by the end of the ....