2019 (2) TMI 2004

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....,730/- was filed on 3rd Sep, 2010. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 24th August, 2011. Further facts of the case are discussed under the two grounds of appeals filed by the assesee as under:- Disallowance of Rs. 16,27,820/- u/s. 36(i)(iii) of the act 3. During the assessment, the assessing officer noticed that assessee has made loan and advances to the amount of Rs. 78,47,5,019/- to various parties. Out of the aforesaid advances an amount of Rs. 19,85,5,747/- was given to the following two parties:- Shraddha Intl. Rs. 29,92,179/- Specific Food Inc. Rs. 1,68,63,587/-   ----------------------   Rs. 1,98,55,747/-   --------------....

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....r): > Bajaj Herbal Pvt. Ltd. (Sr. No.2) - Rs. 3,63,33,321/- > Sai Krupa Fabric Pvt. Ltd. (Sr. No. 10) - Rs. 14,56.000/- > Sainaih Hnterprises (Sr. No. 13) - Rs. 22,00,000/- Total Rs. 3,99,89,321/- Underlying advances are "business advances: • At the outset, the advances in question air related to the business of the assessee and have been made out of commercial expediency. Such fact was categorically pointed out before AO and the same has not been denied by either of the lower authorities. Under such circumstances, no disallowance can be made u/s 36(l)(iii) in respect of such advances. Reliance is placed on "S.A. Builders vs. CIT - 288 ITR 1 (SC)". Major component of interest expenses r....

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....s. Hitachi Home & Life Solutions (I). Ltd. - (2014) 41 taxmann.com 540 (Guj); • CIT vs. Reliance Utilities & Power I ,<d. - 313 ITR 340 (Bom); • Munjal Sales Corporation vs. CIT - 298 ITR 298 (SC); In light of the above, impugned disallowance deserves to be deleted." On the other hand ld. departmental representative has placed reliance on the decision of ld. CIT(A). 5. We have heard both the sides and perused the maternal on record carefully. In respect of outstanding advance of Rs. 3.63 crores to M/s. Bajaj Herbal Pvt. Ltd the sister concern of the assessee, the ld. CIT(A) stated that the assessee had mentioned that advance was given for the property named Sarthik (405) but no details were submitted....