TaxTMI 
TaxTMI 
2019 (5) TMI 1162
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....engaged in manufacturing of switchgears. On going through the Balance sheet of the assessee company, the Assessing Officer (AO) observed that it had given loans and advances to Hekre Developers (advance for property - Rs. 11.00 lakh); Mohit kumar Narang (advance for property - Rs. 5.00 lakh); Shri Ganesh Apartment (flat - Rs. 15,000/-); and Shubhada Ranadive (Company guest house - Rs. 2,50,000). The AO applied notional interest rate of 12% and made addition of Rs. 2,23,800/-. The ld. CIT(A) deleted the addition of interest in respect of advance for property given to Hekre Developers at Rs. 11.00 lakh. For the remaining amounts, he confirmed the addition at Rs. 91,800/-, against which the assessee has come up in appeal before the Tribunal. ....
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....liance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom), has held that where an assessee possessed sufficient interest free funds of its own which were generated in the course of relevant financial year, apart from substantial shareholders' funds, presumption stands established that the investments in sister concerns were made by the assessee out of interest free funds and, therefore, no part of interest on borrowings can be disallowed on the basis that the investments were made out of interest bearing funds. In that case, the AO recorded a finding that a sum of Rs. 213 crore was invested by the assessee out of its own funds and Rs. 1.74 crore out of borrowed funds. Accordingly, disallowance of interest was made to the tune of Rs. 2.40 ....
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....ued as available for investment in sister concern. Repelling this contention, the Hon'ble High Court observed that : "In our opinion, the very basis on which the Revenue had sought to contend or argue their case that the shareholders' fund to the tune of over Rs. 172 crore was utilized for the purpose of fixed assets in terms of the balance-sheet as on March 31, 1999, is fallacious." In upholding the order of the Tribunal, the Hon'ble High Court held that: "If there be interest free funds available to an assessee sufficient to meet its investment and at the same time the assessee had raised a loan, it can be presumed that the investments were from the interest free funds available". Thereafter, the judgment of the Hon'ble Supreme Court i....
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....against the confirmation of addition of Rs. 3,35,159/- towards expenses incurred through credit card. 7. The facts apropos this ground are that the AO observed from the audit report that a sum of Rs. 6,70,318/- was incurred through credit card. The assessee was called upon to explain the nature of expenses incurred through such credit card. The assessee produced ledger extract and credit card bills, monthly statements from which it was shown that the expenses related to hotel, purchase of cloth, travelling, petrol etc. Treating such expenses as personal in nature, the AO made disallowance of Rs. 6,70,318/-. The ld. CIT(A) restricted the addition to 50%. 8. I have heard both the sides and gone through the relevant material on record. I....
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....at Rs. 46,458/-, which disallowance came to be countenanced in the first appeal. 11. Having heard both the sides and gone through the relevant material on record, I find that page 84 of the paper book is a letter from Larsen and Toubro addressed to Mr. Nitish Shastri requesting him to visit the Switchgears plant in Malaysia. It is pursuant to this letter that Mr. Nitish Shastri visited Malaysia. As such, the business purpose is established and there is no reason to make any disallowance on this score. I, therefore, order to delete the addition. 12. Ground No.4 is against the confirmation of addition of Rs. 2,50,000/- u/s.68 of the Income-tax Act, 1961 (hereinafter also called `the Act'). 13. The assessee had shown to have received ....
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....e received this amount from his employee. It was submitted that an advance of Rs. 2-2.5 lakh was given to him, out of which Rs. 1.00 was received in cash. No evidence in respect of giving of the loan to the employee in the past has been tendered before the Tribunal. The ld. AR could not show even the existence of the loan in the assessee's balance sheet. Thus it is held that the assessee has failed to prove the genuineness of the transaction. It is seen that the ld. CIT(A) has restored the matter to the file of the AO, for which he has no power. In the absence of the Revenue having filed any appeal against the impugned order, I cannot put the assessee to a more disadvantageous position than in which it was before the filing of the appeal....