2024 (11) TMI 1312

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....as "the Act"). The said order was passed in connection with the assessment order under Section 143(3) of the Act dated 27-11-2019, passed by the Assessing Officer (hereinafter referred to as "AO"), Circle 4(1)(1), Ahmedabad, for the Assessment Year (AY)2017-18. Facts of the Case: 2. The assessee Siwana Agri Marketing Limited (now merged with "Vital Connections LLP"), filed its return of income for AY 2017-18, declaring a total income of Rs. 31,91,560/-. The case was selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS), and notices under Sections 143(2) and 142(1) of the Act were issued. After examining the submissions and documents, the AO completed the assessment under Section 143(3) of the Act on 27-11-2019, deter....

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....re the learned AO be directed to allow the same while computing Total Income. 3. That the appellant craves liberty to add, amend and alter any ground of appeal before the final hearing. 5. During the course of hearing before us, the Authorised Representative (AR) of the assessee stated that the assessee has sufficient own funds to advance the loan. The AR pointed out from the sufficiency of own funds from the financial statements which are detailed as follows: Particulars   As on 31-3-2017 As on 31-3-2016 Share Capital in Rs. 1,025,000 1,365,400 Reserves and Surplus in Rs. 270,037,683 301,768,032 Total in Rs. 271,062,683 303,133,432 5.1. The AR also stated that, during the year under consideration, the amount o....

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....rities. 6. We have carefully considered the submissions of both parties, the findings of the AO and CIT(A), the judicial precedents relied upon by the assessee and the Revenue, and the material placed on record. The primary issues under consideration are: * The disallowance of Rs. 65,86,200/- under Section 36(1)(iii) on the grounds that interest-free advances were made without establishing a business purpose or demonstrating the nexus between interest-free funds and such advances. * The disallowance of Rs. 8,002/- on account of sundry balances written off, citing non-compliance with Section 36(2) of the Act. 6.1. The CIT(A) observed that the assessee failed to substantiate its claim that interest-free funds were utilized for the inte....