2018 (5) TMI 1083

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....aking a proportionate disallowance of Rs. 37,17,140/- at an arbitrary rate of 13.25% which is defeating the test of nexus, purpose, character as requiring findings while determining the commercial expediency and business exigencies. 2. Because the quantum of disallowance and the rate of interest invoked for the said disallowance are both under challenge alongwith the quantum thereof. 3. Because the action is being under challenge on facts and law, while not taking into consideration the additional evidences of whatsoever kind which are the materials facts containing material particulars to the present case. 4. Because the disallowance of Rs. 13,779/- (1/6th of Rs. 82,673/-) attributable to personal usage is being ....

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....these advance may not be disallowed as no interest had been charged on these advance given to related persons. After considering the assessee's submissions on this issue the AO pointed out that the assessee had himself admitted that these amounts were advances given to related parties to clear the trade debts (outstanding amount) of other parties dealing with these concerns . The AO accordingly held that the assessee had tried to intentionally camouflage the transaction by putting the name of these finn under the head sundry debtors but actually these are loans and advances by the appellant to his sister concerns and that too interest free. The AO held that it was evident that the amounts were advanced by the appellant to its related partie....

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.... 31.3.2011 and 31.3.2012. He further stated that the audited balance sheet for the year ending 31.3.2011 and 31.3.2012 exhibits that the assessee has sufficient interest free funds (own funds / interest free loan/sundry creditors) to provide loan / advance to sister concerns. As on 31.3.2011 the assessee has given interest free advances to sister concern amounting to Rs. 1,98,64,866.85 out of own funds amounting to Rs. 38,01,36,440.98 which is far in excess of advances to sister concerns. He further stated that assessee has given fresh advances amounting to Rs. 48,50,000/- to M/s SK Enterprises & Rs. 14,50,000/- to M/s Pride Sales Corporation (Totaling Rs. 63,00,000/-) during the impugned AY 2012-13 out of own funds amounting to Rs. 18,60,0....

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.... Ld. DR relied upon the orders of the authorities below and relied upon the following case laws, but he could not controvert the contention of the assessee's counsel that as to why in the preceding year the AO has allowed the same relief to the assessee and as to why Ld. CIT(A) in succeeding year has allowed the appeal of the assessee on the similar additions. - Punjab Stainless Steel Inds. Vs. CIT (2011) 186 Taxman 404 (Del) - Thukral Regal Shoes vs. CIT (2016) 72 taxmann.com 192 (Punjab & Haryana High Court) - Abhishek Industires vs. CIT (2006) '156 Taxmann 257 (Punjab & Haryana). - CIT vs. R. Mohan (2011-TIOL-687-HC/MAD-IT) - CIT vs. Cornerstone Exports P Ltd. (2016) 67 taxmann.com 345 (Gujara....