TaxTMI 
TaxTMI 
2017 (5) TMI 352
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....d in upholding the action of Assessing Officer in treating 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 : ....
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....". 7. That Ld.CIT(A) erred in holding that the disallowance of Rs. 16,65,055/- made by the Assessing Officer 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 ....
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....d upheld the addition in the hands of assessee by concluding as under : "4.1.4. . . . . . . . . . . . . . . . . . . . . . . . . . . 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 t....
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....arges. The Ld. Authorised Representative for the assessee referred to the details of finance charges at page 16 of the balance sheet to point out that 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....
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....t in the plea of the assessee in this regard and hold that no disallowance is to be made out of the bank charges, loan processing charges and interest on term loan. The assessee admittedly had advanced the said loans to the sister concerns in the earlier years and the term loan which was raised during the year is used for business purposes and hence has no connection to the advances made in the earlier years. The other item is the interest paid on bank loan of Rs. 10,69,222/- and other loan of Rs. 68,000/-. The Ld. Authorised Representative for the assessee in this regard further referred to the position of assets held by the assessee and points out that since the assessee has reserves and surplus to the extent of Rs. 48,55,570/- which was ....