2018 (6) TMI 1644

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....sment order passed under s.143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") dated 23.12.2016 relevant to Assessment Year (AY) 2014-15. 2. The grounds of appeal raised by the assessee are as under:- "1. That the learned Commissioner of Income Tax(Appeals) has erred in law and facts by confirming the disallowance of interest of Rs. 51,81,558/-, on account of Purchases of Capital asset and therefore the learned AO should be directed to allow the said interest while computing the total income. 2. That the learned Commissioner of Income Tax (Appeals) has erred in law and facts by confirming the disallowance of interest of Rs. 10,65,860/- on account interest free advance and therefore the learned AO....

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....ese items of alleged non business or capital advances. The total advances toward purchase of fixed assets, during the year from time to time is about Rs. 1150 Lacs, Rs. 140 Lacs as on 31/3/2014 as interest free loans and advances and Rs. 9. 85 Lacs Non Business Advances as on 31/3/2014.In this regard reliance is placed on the judgment of the Hon'ble Gujarat High Court in the case of C1T Vs Raghuvir Synthetics Pvt Ltd.(354 1TR 222)(Guj). (c) The ld.AO has not established that borrowed money has been used for the non business purpose. (d) In view of the said the disallowance of interest of Rs. 51,18,558+ Rs. 10,65,860/- and Rs. 74,692/- is bad in law and against the facts and therefore the ld.AO is to be directed to not ....

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..... The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross-examination, right to legal representation, the disclosure of evidence to the party, report of inquiry to be shown to the other party and reasoned decisions or speaking orders. We took this guidance for the right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi v. Union of India in 1978 SCR (2) 621, wherein Hon'ble Supreme Court has laid down that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of the norm of the rule of audi alteram partem. We find that in this instant case, the assessee was not given a proper heari....