TaxTMI 
TaxTMI 
2019 (7) TMI 1210
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....tive expenses." The revenue, in its cross appeal, raised the following grounds of appeal:- (i) "On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the ad-hoc disallowance of Rs. 5,84,79,680/- on account of total interest paid on incremental working capital loans taken during the year under consideration by holding that the disallowance is based merely on assumption, without taking into consideration the fact that the assessee could not provide any requisite evidences regarding the utilization of working capital loan?" (ii) "On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the disallowance of Rs. 50,96,663/- made u/s 14A r.w rule 18D by holding that the assessee had not made any fresh investment in the year and old investments and that the assessee had not earned any exempt income during the relevant period without taking into consideration that disallowance of expenditure for earning exempt income under section 14A read with Rule 8D would be attracted even if the corresponding exempt income has not been earned during the financial year ?" 1. Brief facts of the case are th....
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....CIT(A) no evidences was filed , accordingly he addition was upheld. The ld. DR prayed to uphold the additions. 4. We have considered the submission of learned DR for the revenue and also gone through the orders of authorities below. The assessing officer while making assessment issued show cause notice as to why the assessee has shown lower GP comparative to preceding assessment year. The assessee was asked to substantiate the lower GP in the current year. The assessee filed its reply wherein the assessee stated that all the documents including bills, vouchers, transport receipts, stock register and other supporting evidence has been lost. The assessee further stated that the documentary is entered in Form 3CD should be accepted. The assessing officer in absence of necessary documentary evidences rejected the books of account. The assessing officer also recorded that a survey was conducted by the investigation wing of the revenue on Tayal group in Mumbai on 10 September 2013, wherein the statement of Shri Praveen Kumar Tayal was recorded. During the course of survey, instances of claim of bogus expenses on account of purchase a capital assets were found. The assessee is stated t....
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....discharge its onus in proving the claim of administrative expenses and disallowed 10% of 20.61 crore. We have noted that while working the disallowances the assessing officer worked out disallowance of Rs. 2.61 crore. Before learned Commissioner (Appeals) the assessee stated that the administrative expenses is only just 2.87% of turnover and that in preceding year it was 2.42% of the total turnover. The assessee also stated that the turnover of assessee was increased about 17% from the proceeding financial year. The learned Commissioner (Appeals) after considering the submission of the assessee concluded that in absence of any corroborative evidence it cannot be said that the assessee has discharged onus. The learned Commissioner (Appeals) confirmed the action of the assessing officer. However, on the working of disallowances the assessing officer was directed to correct the figure of disallowances. Before us the assessee neither furnished any documentary evidence not filed any written submission to substantiate the ground of appeal, therefore, we do not find any justification in interfering the finding of Commissioner (Appeals). In the result this ground of appeal is also rejected....
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.... than per the business does not arise. The learned Commissioner (Appeals) after considering the submission of the assessee observed that though, the assessee could not provide the requisite evidence regarding utilisation of working capital loan before the assessing officer but that alone itself could not be ground for making the disallowance of interest expenses. The disallowances are based on an assumption and presumptions that entire working capital limits availed by assessee was not utilised for the purpose of business. There is nothing on the record that the assessee has diverted interest bearing borrowed funds by granting interest free loans to sister concern. The assessee has shown that against working capital loan of Rs. 208.03 crore, it was having closing inventory of 197.87 crore and directors of Rs. 154.32 crore respectively which is aggregating to Rs. 352 .15 crore. the working capital loan availed from the bank was around 59.07% of the current asset. The turnover of the assessee was increase from Rs. 611 Crore to Rs. 718 Crore i.e 17%. Therefore it cannot be concluded that the assessee used the working capital for other than business purpose and deleted the disallowa....