2021 (1) TMI 1019

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....an Kumar Gadale, Member (J) The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals)-24, Mumbai, passed u/s. 143(3) and 250 of the Income Tax Act, 1961. The assessee has raised the following grounds of appeal: "1. The Ld. AO erred in incorrectly appreciating the fact that loans taken to meet day to day circulating needs of the business were neither use....

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....ants and no portion of the said amount was advanced towards acquiring of capital asset. 3. The AO erred in taking the figure of Rs. 58,48,970/- as capital advance while computing the disallowance ignoring the fact that in para 4 of the assessment order the capital advance was shown at Rs. 50,64,880/- 4. It is prayed that the ad hoc disallowance of interest incurred by the appella....

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....st on loan funds are debited to profit and loss account. The A.O. has observed that, the assessee has advanced interest free funds to its sister concerns and at the same time paying interest on borrowed funds. Therefore, the A.O. is of the opinion that the proportionate interest amount considering the advances and the interest on the borrowed funds has to be disallowed and accordingly made disallo....

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....tra, the Ld. DR supported the orders of the CIT(A). 4. We have heard the rival submissions and perused the material on record. The sole matrix of the disputed issue is with respect to disallowance of proportionate interest by the A.O. considering the capital advances provided by the assessee. The contentions of the Ld. AR are that, the advances does not pertains to sister concerns but the balan....