TaxTMI 
TaxTMI 
2025 (8) TMI 118
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....ke of convenience. 2. In both the years, the assessee is challenging the decision rendered by the Ld.CIT(A) in confirming the following additions made by the AO:- (a) Disallowance of interest expenses; (b) Addition of Capital gains declared by the assessee; (c) Addition towards estimated commission expenses. However, we notice that the assessee has committed an error in mentioning the quantum of disallowance in each of the grounds in AY. 2005-06, i.e., the assessee has wrongly mentioned the amounts disallowed in AY.2006-07 in the grounds raised in AY.2005-06 also. The actual disallowance made in AY 2005-06 are Rs. 2,67,480/- Rs. 2,43,303/- and Rs. 12,165/- respectively against the issues (a) to (c) mentioned....
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....Tribunal. However, the same amount of disallowance was made by the AO again in the impugned set aside proceedings. The Ld.CIT(A) also again confirmed the same. 4.1. We heard the parties and perused the record. We notice that the assessee is the proprietor of a business concern named M/s Khandelwal Sheet Processors. The addition relating to interest expense is related to the above said business concern. The Balance Sheet of M/s Khandelwal Sheet processors is placed at page 21 of the paper book. The opening capital and closing balance of capital of the assessee was shown as Rs. 7,53,105/- and Rs. 12,62,047/- respectively as on 01-04-2004 and 31-03-2005. Hence, the average capital balance available with the assessee in the above said concer....
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....s available as own capital has been used to give interest free loans, as per the decision rendered by Hon'ble Bombay High Court in the above said case. Hence, the presumption is that the balance amount of interest free advances of Rs.4.86 lakhs only, has been given out of loan funds. Hence, the addition of interest expenditure should be computed on the balance loan amount of Rs. 4.86 lakhs only. 4.4. We notice that the AO has applied interest rate of 18% for computing the addition towards interest expense. The Ld A.R submitted that the average rate of interest paid on the loans taken by the assessee works out to 9.39% only in this year. Accordingly, he submitted that the AO should have adopted interest rate of 9.39% for computing additio....
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.... Ld A.R submitted that the shares of M/s Stanely Credit Ltd., were purchased and sold through stock exchange platform after paying STT. The payments were made/received through banking channels. The shares have entered the Demat account and exited there from. All the documents evidencing the transactions were furnished before the AO. The ITAT had restored the matter to the file of the AO for examining the veracity of the documents. However, in the impugned set aside proceedings, the AO did not carry out any investigation/examination and further, did not find fault with any of those documents. Accordingly, the Ld A.R contended that there is no reason available with the AO to disbelieve the short term capital gains declared by the assessee. He....
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.... the AO are identical with the additions made in AY. 2005-06 discussed above. This is also second round of proceedings as in the case of AY 2005-06. 7. The first issue relates to the disallowance of interest expenditure. The opening and closing capital (i.e., as on 01-04-2005 and 31-03-2006) available in the business books of the assessee were Rs. 12.62 lakhs and Rs. 16.62 lakhs respectively. The Balance sheet of business concern is placed at page 65 of the paper book. Hence, the average capital balance (own funds) available with the assessee is around Rs. 14.62 lakhs. The interest free advances given by the assessee is Rs. 14.86 lakhs. Hence, the presumption is that the own funds of Rs. 14.62 lakhs was first used to give interest free l....