TaxTMI 
TaxTMI 
2019 (8) TMI 1205
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....hiana was not justified to arbitrarily uphold the action of the Ld. Assessing Officer in disallowing a sum of Rs. 15,44,043/- out of interest account by resort to provisions of Section 57(iii). 2. That he was further not justified to arbitrarily uphold the action of the Ld. Assessing Officer in disallowing a sum of Rs. 2,01,874/- out of car expenses, depreciation, telephone and travelling expenses on account of estimated personal use thereof in addition to the disallowance already made by the appellant at Rs. 1,74,371/-. 3. Vide Ground No. 1 the grievance of the assessee relates to the confirmation of disallowance of Rs. 15,44,043/- out of interest account made by the A.O. 4. Facts related to this issue in brief are that the ....
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....claimed under section 57 and draw nexus between the interest paid and received for the purpose of allowability of expenses under section 57 of the Act. The assessee submitted that no fresh loans had been raised during the year rather the loans had been squared up for which the interest was being paid in the past. The assessee filed the reply to the A.O. as under: "Your Honour asked the assessee to justify the claim of interest paid u/s 57 of the act, against interest income, a reply to the same has already been submitted during the course of assessment proceedings on 15.03.2016. Further, it is submitted that the assessee is maintaining books of account both in respect of transaction of his proprietary concerns namely M/s Shakti ....
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....ssment order dt. 21/03/2016 for the cost of repetition the same are not reproduced herein. 6. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under: This is in continuation to earlier submissions filed on 23.10.2018 against an order under Section 143(3) of the Income-Tax Act, 1961 in the case of Sh. Dharam Pal Aggarwal (herein after referred to as "the appellant") for the above captioned assessment year. At the outset, it is also respectfully submitted that, from the perusal of a chart enclosed, the amount of interest-free funds available with the appellant on the dates of advance more than theamount of interest-free advances, the extract of which is tabulated as below: Date of Adva....
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....l and Mr. Sanjay Bansal are the directors. Accordingly, the appellant procured huge value of orders [ one Container costs Rs. 1 Crore] for M/s Bansal Spinning Mills Limited from Australia. In turn, the appellant earned commission on such orders from M/s Bansal Spinning Mills Limited amounting Rs. 54,51,451/-. However, in order to safeguard the interest of its client i.e. owing to quality specifications in products, the appellant offered them security in the form of advance to directors of M/s Bansal Spinning Mills Limited i.e. Mr. S.P. Bansal and Mr. Sanjay Bansal, so that M/s Bansal Spinning Mills Limited could securely make payments against import purchases, even if M/s Bansal Spinning Mills Limited encountered quality related issues. If ....
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.... Balkrishna Vs. CIT, Ahmedabad. 177 ITR 275 (SC) * Vijay Laxmi Sugar Mills Ltd. Vs. CIT 191 ITR 647 (SC) * Karnataka Forest Plantations Corpn. Ltd. 156 ITR 275 (Karnataka HC) * CIT Vs. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) * Smt. Virmati Ramakrishan Vs. CIT 131ITR 659 (Guj. HC) 8. Now the assessee is in appeal. 9. Ld. Counsel for the Assessee reiterated the submissions made before the authorities below and further submitted that the similar interest paid on the loans was disallowed by the A.O. in the preceding year i.e; 2012-13, however the same was deleted when the matter was taken before the ITAT in ITA No. 315/Chd/2017, vide order dt. 22/04/2019 and that in this year the assessee reduced ....
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....ich is placed on the record. However the said order was not available either to the A.O. or to the Ld. CIT(A), I therefore deem it appropriate to set aside this limited issue to the file of the A.O. to be adjudicated by keeping in view the observations given in the aforesaid order, in accordance with law. 12. Vide Ground No. 2 the grievance of the assessee relates to sustenance of disallowance of Rs. 2,01,874/- out of car expenses, depreciation, telephone and travelling expenses when the assessee himself had disallowed a sum of Rs. 1,74,371/- out of the above said expenses. 13. The facts related to this issue in brief are that the A.O. during the course of assessment proceedings noticed that the expenses incurred by the assessee we....