2012 (8) TMI 1203

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....42,000/- against the sister concerns. This means that the interest bearing funds have been diverted for non-business purposes and interest should have been disallowed in view of the decision of Hon'ble Punjab & Haryana High Court in the case of CIT V. Abhishek Industries, 286 ITR 1. In response to the show cause notice it was mainly submitted that the assessee had surplus funds because from one of the sister concerns the amount payable was ₹ 53,97,047/-, therefore, sufficient funds were available and interest could not have been disallowed. It was also submitted that the decision of Hon'ble Punjab & Haryana High Court in case of CIT V. Abhishek Industries (Supra) stood distinguished by the latter decision of Hon'ble Punjab....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ad filed copies of accounts of the sister concerns which are placed at pages 29 to 33. Page 29 clearly shows that in Mahadev Trading Co. Hathur there was a credit balance of ₹ 53,97,047/- and there was a debit balance amounting to ₹ 6,57,000/-, ₹ 10.00 Lakhs, ₹ 9.85,000 from three sister concerns namely Mahadev Trading Co. Maunke, Mahadev Trading Co. Jagraon, Mahadev Trading Co. Hathur. Thus the assessee had more credits from sister concerns then the debit balances of sister concerns. Therefore, in such a situation the decision of CIT V. Abhishek Industries (supra) is not applicable. In any case there is one of the possible view and the Hon'ble Supreme Court in case of CIT V. Max India Ltd (supra) has clearly hel....