Prakash Tradelink Pvt. Ltd., Ahmedabad V. The ITO, Ward-3(1)(4)., Ahmedabad

ITA 2119/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6190 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 06-02-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 25-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K P SHAH
• Keywords: Cost of acquisition
• Section: 143(1); 143(2); 145

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT ./ ITA.NO.2119/AHD/2017 / ASSTT. YEAR: 2013-2014 PRAKASH TRADELINK P LTD 264, 2 ND FLOOR GUNJ BAZAR O/S DELHI GATE MADHUPURA, AHMEDABAD. VS ITO, WARD-3(1)(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI K.P. SHAH, AR REVENUE BY : SHRI DILIP KUMAR, SR.DR / DATE OF HEARING : 06/02/2020 / DATE OF PRONOUNCEMENT: 12/02/2020 $%/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-2, AHMEDABAD DATED 3.8.2017 PASSED FOR TH E ASSTT.YEAR 2013-14. 2. IN THE APPEAL MEMO, THE ASSESSEE HAS RAISED FIVE GROUNDS ALONG WITH SUB-GROUNDS. SUB-GROUNDS ARE IN THE FORM OF ARGUME NTS TO THE RESPECTIVE MAIN GROUNDS. GROUND NO.1 BEING GENERAL IN NATURE DOES NOT CALL FOR SEPARATE ADJUDICATION, HENCE DISMISSED AS SUCH. 3. GROUND NO.2(I) TO 2(IV) AND GROUND NO.3(I) TO 3( III) ARE INTERWINED I.E. IN GROUND NO.2(I) TO (IV), ASSESSEE CHALLENGES REJECTI ON OF BOOKS UNDER SECTION 145 OF THE INCOME TAX ACT, AND VIDE GROUND NO.3(I) TO 3(III) ASSESSEE CHALLENGES ADDITION OF RS.21,93,618/- ON ACCOUNT OF ALLEGED UNDER-INVOICING OF SALES MADE. ITA NO.2119/AHD/2017 2 4. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A T RADER IN MILK POWER AND MILK PRODUCTS. DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE HAS FILED RETURN OF INCOME ON 14.10.2013 DECLARING TOTAL INCO ME AT RS.6,92,850/-, WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED AND S ERVED UPON THE ASSESSEE. IN THE ASSESSMENT PROCEEDINGS, ASSESSEE HAS SHOWN T OTAL TURNOVER OF RS.13,80,89,351/- AND GP SHOWN AT RS.19,12,854/-. THE NET PROFIT SHOWN BY THE ASSESSEE WAS OF RS.6,47,583/- INCLUDING OTHER I NCOME OF RS.9,65,002/-. FROM THE DETAILS OF SALES AND PURCHASE AS ALSO STOC K REGISTERED SUBMITTED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING, IT W AS NOTICED BY THE AO THAT ASSESSEE HAS PURCHASED MILK POWER FROM GUJARAT COOP ERATIVE MILK MARKETING FEDERATION, ANAND. ON THE BASIS OF STOCK REGISTER, A SUMMARY OF STOCK POSITION, PURCHASER, SELLER, PURCHASE PRICE, SALE PRICE AND DATE WISE WAS PREPARED IN A TABULAR FORM AND NOTICED IN PAGE NO.4 OF THE ASSESSMENT ORDER. ASSESSEE WAS MAINTAINING STOCK REGISTER ON THE BASI S OF FIFO METHOD. THE LD.AO FURTHER NOTICED FROM THE STOCK REGISTER THAT THE ITEMS AT SR.NO.3, 8, 12 & 13, THE ASSESSEE HAS PURCHASED MILK POWDER FROM G CMMF LTD. AT RS.173.40/- PER KG. AND SOLD THAT VERY GOODS TO JAI DURGA BHADAR AT 135/- PER KG. IT WAS NOTED BY THE AO THAT ASSESSEE HAS SOLD M ILK POWDER AT RS.175/- ON VARIOUS DATES TO OTHER PARTIES. IN OTHER WORDS, AGA INST PURCHASE COST OF RS.173.40/- PER KG ASSESSEE HAS SOLD THE SAME TO TH E SAID JAI DURGA BHANDAR AT RS.135/- BY INCURRING A LOSS OF RS.38.40/- PER KG. TO A SHOW CAUSE NOTICED ISSUED BY THE AO, ASSESSEE EXPLAINED THAT ON ACCOUN T OF ANTICIPATED FALL IN FUTURE IN PRICE OF MILK, THE ASSESSEE HAS COMMITTED TO SELL THE SAME AT RS.135/- PER KG. HOWEVER, PRICE DID NOT FALL, ASSESSEE HAD TO SELL MILK POWDER AT THE COMMITTED PRICE, THOUGH IT HAS SUFFERED LOSS, WHICH WAS CONFIRMED BY THE PARTY. THE LD.AO DID NOT ACCEPT THIS EXPLANATION OF THE ASSESSEE AS THE ITA NO.2119/AHD/2017 3 EXPLANATION WAS NOT SUPPORTED BY ANY DOCUMENTARY EV IDENCE. HE NOTED THAT ASSESSEE HAS SOLD MILK POWDER MUCH LESS THAN THE CO ST PRICE THAT TOO NOT IN AN ISOLATION TRANSACTION BUT SEVERAL TRANSACTIONS MADE DURING THE YEAR. SUMMARY OF LOSS MADE IN RESPECT OF SALES MADE TO M/S.JAI DU RGA BHANDAR WAS EXTRACTED BY THE AO IN HIS IMPUGNED ORDER. IT READS AS UNDER : SR. NO. DATE OF PURCHASE PURCHASE PRICE PER KG. IN DATE OF SALE SALE PRICE PER KG. QUANTIT Y 'IN KG. LOSS PER KG. LOSS FOR ENTIRE SELLING TRANSACTION 3 06.12.12 173.40 06.12.12 . 135.00 13530 -38.40 -579,552/- 8 20.12.12 173.40 20.12.12 735:06 13500 -38.40 -5F8,400/- 12 29.01,13 173.40 29.0.1.13 135.00 13500 -38.40 -578,400/- 13. .30.01.13 173.40 30.01.13 135.00 13500 -38.40 -578,400/- TOTAL 20,74,752/~ 5. AFTER ANALYSIS OF THE BOOKS OF ACCOUNTS AND SUPP ORTING DETAILS, THE LD.AO FOUND THAT WHILE ASSESSEE WAS MAKING PROFIT F ROM THE SALE OF MILK PRODUCTS IN THE CASE OF OTHER PARTIES, IT WAS CONTI NUOUS INCURRING LOSS IN RESPECT OF SALES TO M/S.JAI DURGA BHANDAR ONLY. T HEREFORE, THE LD.AO HELD THAT ACCOUNTS OF THE ASSESSEE DOES NOT REPRESENT CO RRECT PICTURE, AND THEREFORE, BOOK RESULTS OF THE ASSESSEE REJECTED UNDER SECTION 145 OF THE ACT. THEREAFTER, THE LD.AO PROCEEDED TO ESTIMATE UNDER I NVOICING OF SALES MADE TO M/S.JAY DURGA BHANDAR FOR SELLING MILK POWER AT ALL EGED LOSS OF RS.38.40/- PER KG. HE CONSIDERED PRICE OF RS.175.60/-, AT WHI CH RATE ASSESSEE HAD SOLD THE SAME PRODUCT TO OTHER PARTIES INSTEAD OF RS.135 /- PER KG. OF MILK POWDER, AND A MARGIN OF RS.40.60/- PER KG. WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE, WHICH HE WORKED OUT AT RS.21,93,618/- (54 030 KG. X 40.60/-) AS ITA NO.2119/AHD/2017 4 CONCEALED SALE, AND ADDED TO THE TOTAL INCOME OF TH E ASSESSEE. ASSESSEE HAS CHALLENGED THIS ACTION OF THE AO BEFORE THE FIRST A PPELLATE AUTHORITY, BUT DID NOT GET ANY RELIEF. HENCE, ASSESSEE IS BEFORE THE TRIBUNAL. 6. BEFORE ME, THE LD.COUNSEL FOR THE ASSESSEE REITE RATED SUBMISSIONS AS WERE MADE BEFORE THE LD.REVENUE AUTHORITIES. HE FU RTHER SUBMITTED THAT ASSESSEE IS BOUND TO HONOUR ITS BUSINESS COMMITMENT TO SELL THE PRODUCTS TO THE SAID M/S.JAY DURGA BHANDAR AT LESSER RATE, WHEN IT ANTICIPATED PRICE FLUCTUATION. HE SUBMITTED THAT REVENUE SHOULD NOT INTERFERE IN THE BUSINESS DECISIONS OF THE ASSESSEE, AND IT IS FOR BUSINESSMA N TO DETERMINE AT WHICH PRICE IT HAS TO SELL ITS PRODUCTS TO ITS CUSTOMERS. THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON VARIOUS DECISIONS OF HONBLE HIGH COURT S, VIZ. CI T VS. KESHAVLAL CHANDULAL, 59 ITR 120 (GUJ), CIT VS. CALC UTTA DISCOUNT CO. LTD., 91 ITR 8 (SC), A. KHADAR BASHA VS. ACIT, 58 TAXMANN COM 332 (KARN), FLIPKART INDIA P.LTD. VS. ACIT, 92TXMANN.COM 387 (B ANG-TRIB) AND SIR RAMALINGA CHODAMBIKAI MILLS LTD. VS. CIT, 28 ITR952 (MAD). THE LD.DR ON THE OTHER HAND, SUPPORTED THE ORDER OF REVENUE A UTHORITIES. 7. I HAVE CONSIDERED SUBMISSIONS OF BOTH THE PARTIE S AND GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. I ALSO PERUSED DECI SIONS CITED BY THE LD.COUNSEL FOR THE ASSESSEE AT BAR, BUT THEY ARE DISTINGUISHAB LE ON FACTS. IT IS PERTINENT TO TAKE NOTE OF THE FINDINGS RECORDED BY THE LD.CIT(A) IN HIS IMPUGNED ORDER. IT READS AS UNDER: 4.2 I HAVE CAREFULLY CONSIDERED RIVALCONTENTION AN D OBSERVATIONS MADE BY THE A,O, IN THE ASSESSMENT ORDER. IT IS OBS ERVED THAT THE A.O HAS MADE AN ADDITION . OF RS, 21,93,618/-. THE A.O HAS MENTIONED AT PARA-3 OF THE ASSESSMENT ORDER THAT THE APPELLANT P URCHASED MILK POWDER IN BULK FROM GUJARAT COOPERATIVE MILK MARKET ING FEDERATION LTD, (GCMMF), ANAND AND FURTHER SUPP.LY THE SAME TO VARIOUS CUSTOMERS. THE COMMODITY WHICH IS PURCHASED BY THE APPELLANT FROM ITA NO.2119/AHD/2017 5 GCMMF IS A PERISHABLE COMMODITY AND APPELLANT HAS T O PURCHASE THE STOCK AS PER THE REQUIREMENT ON A DAILY OR WEEKLY B ASIS. THE A.O HAS FURTHER ANALYSED THE TRANSACTIONS UNDERTAKEN BY THE APPELLANT WITH VARIOUS CUSTOMERS. THE A.O HAS COMPARED THE PURCHAS E COST WITH THE SALE PRICE AT WHICH THE GOODS WERE SOLD TO DIFFEREN T CUSTOMERS. A.O HAS MENTIONED THAT APPELLANT FOLLOWS FIRST-IN-FIRST-OUT METHOD (FIFO) AND AS SOON AS IT RECEIVED THE STOCK FROM GCMMF, THE ST OCK IS SUPPLIED TO VARIOUS CUSTOMERS AND RARELY THE CLOSING STOCK IS M AINTAINED BY THE APPELLANT. THE A.O HAS OBSERVED THAT THE APPELLANT HAS BEEN BUYING THE MILK POWDER AT AN AVERAGE COST PRICE OF RS. 168 TO 173 PER KG ON VARIOUS DATES FROM GCMMF. IT HAS BEEN SELLING THE S AME AT PRICE OF AROUND RS. 173 TO 175 TO ITS CUSTOMERS EXCEPT FOR M /S. JAI DURGA BHANDAR. THE APPELLANT HAS SOLD MILK POWDER TO M/S. JAI DURGA BHANDAR AT A PRICE OF RS. 135 PER KG RESULTING INTO LOSS OF RS. 38.40 PER KG UNIFORMLY ON ALL ITS TRADES WITH IT. THE SAID LO SS HAS OCCURRED TO THE APPELLANT ONLY IN CASE OF SUPPLIES MADE TO M/S. JAI DURGA BHANDAR. WITH REST OF THE CUSTOMERS THE APPELLANT HAS INCURR ED PROFIT IN THE TRANSACTIONS: ON BEING ASKED WHY THE GOODS WERE SOL D AT A LOWER PRICE TO M/S. JAI DURGA BHANDAR THE APPELLANT INFORMED TH E A.O THAT IT WAS COMMITTED TO SELL THE SAME TO M/S. JAI DURGA BHANDA R AT A PRICE OF RS. 135 PER KG RESULTING INTO LOSS. THE A.O HAS NOT ACC EPTED THE ARGUMENT OF THE APPELLANT AND HAS ALSO WENT DOWN TO VERIFY F ORM-C AND ACKNOWLEDGMENT RECEIPTS OF COMMERCIAL TAX DEPARTMEN T. THE A.O HAS NOT ACCEPTED THE ISOLATED LOSS MAKING TRANSACTIONS WITH M/S. JAI DURGA BHANDAR AND HAS PROCEEDED TO ADD THE DIFFERENCE OF RS. 21,93,618/- .TO THE INCOME OF THE APPELLANT ON ACCOUNT OF UNDER INV OICING OF THE SALE TRANSACTION. DURING THE APPELLATE PROCEEDINGS ALSO THE APPELLANT RELIED UPON THE ARGUMENT OF 'COMMITMENT TO SALE' TO M/S. J AI DURGA BHANDAR AT A PRICE OF RS. 135 PER KG. HOWEVER, IT HAS NOT G IVEN ANY REASON WHY THE SAID COMMITMENT WAS MADE TO SALE AT A LOSS. THE APPELLANT HAS .RELIED UPON THE JUDGMENT OF BANGALORE TRIBUNAL IN THE CASE OF DCIT VS SPHOORTI MACHINE TOOLS 30 TAXMAN.COM 413 (BANGLORE TRIB.). IT IS SEEN FROM THE SAID CASE LAW THAT IN THAT CASE THE A SSESSEE WAS SUPPLYING THE PRODUCTS TO THE SISTER CONCERN AT A PRICE OF LE SSER THAN THE PRICE AT WHICH THE SAME PRODUCT WAS SOLD TO THIRD PARTIES. T HE TRIBUNAL HAS HELD THAT SALE OF THE ASSESSEE TO ITS SISTER CONCER N AT A LESSER PRICE WOULD NOT BE THE SUFFICIENT GROUND TO REJECT THE BO OKS OF ACCOUNTS. IN THE CASE UNDER CONSIDERATION, M/S. JAI DURGA BHANDA R IS NOT A RELATED PARTY. THERE ARE NO OTHER TRANSACTIONS WITH JAI DUR GA BHANDAR ON PAPER TO SHOW ITS CLOSENESS WITH APPELLANT. THE A.O HAS ALSO TRIED TO COLLECT INFORMATION ON BUSINESS CONNECTION WITH APP ELLANT FROM OTHER ITA NO.2119/AHD/2017 6 SUPPLIERS, HOWEVER, HAS FAILED IN GETTING THE INFOR MATION FROM THOSE SUPPLIERS. THE ARGUMENT OF THE APPELLANT THAT IT WA S COMMITTED TO SALE JAI DURGA BHANDAR AT RS. 135 HAS NOT BEEN SUBSTANTI ATED BY THE APPELLANT. THE APPELLANT HAS NOT PRODUCED ANY WRITT EN COMMITMENT OR SALE AT LOSS.OR HAS NOT PRODUCED ANY PROOF WHEREBY THE APPELLANT HAS MADE A TRADE OFF FOR INCURRING LOSSES IN THE SUPPLY OF MILK POWDER TO JAI DURGA BHANDAR AGAINST CERTAIN GAINS IN SOME OTHER B USINESS TRANSACTION. IT IS INCUMBENT ON THE PART OF THE APP ELLANT TO SUBSTANTIATE THOSE COMMITMENTS BEFORE THE A.O OR DURING THE APPE LLATE PROCEEDINGS ESPECIALLY WHEN THAT IS THE REASON GIVEN BY IT. THE APPELLANT HAS FAILED IN DOING SO. THEREFORE, I HOLD THAT THE A.O .IS JUS TIFIED IN MAKING ADDITION OF RS. 21,93,618/- ON ACCOUNT OF UNDER INV OICING OF SALES TO M/S. JAI DURGA BHANDAR. THE GROUND OF APPEAL IS HER EBY DISMISSED. 8. A PERUSAL OF THE ORDER OF THE LD.CIT(A) AND DETA ILS FURNISHED BY THE ASSESSEE WOULD INDICATE THAT ASSESSEE WAS CONTINUOU S MAKING LOSS NOT IN ONE OCCASION BUT ON SEVERAL OCCASIONS, FOR THE SALES MA DE TO A PARTICULAR PARTY VIZ. M/S.JAI DURGA BHANDAR (JDB FOR SHORT) AS NOTICED BY THE LD.CIT(A) IN THE ORDER, WHICH DEMONSTRATES THAT THE ASSESSEE IS UNDE R INVOICING THE SALES MADE TO A PARTICULAR PARTY IN ORDER TO SHOW LOSS. THE P RODUCT IS PERISHABLE IN NATURE, AND THE ASSESSEE FOLLOWS FIFO METHOD, AND RARELY KE EPS CLOSING STOCK. THE ASSESSEE WAS BUYING THE MILK POWDER AT AN AVERAGE C OST PRICE OF RS.168 TO 173/- PER KG. ON VARIOUS DATES FROM GCMMF AND SELLI NG THE SAME AT A PRICE AROUND RS.173/- TO RS.175/- TO CUSTOMERS BARRING JD B TO WHOM ASSESSEE SOLD THE PRODUCT AT RATE OF RS.135/- PER KG. THEREBY SUF FERING A LOSS OF RS.38.40/- PER KG. QUESTION WOULD ARISE, WHY THE ASSESSEE WAS SUFFERING LOSS ONLY IN ONE CASE, WHEREAS IN ALL OTHER CASES IT WAS GETTING PRO FIT. THE EXPLANATION OF THE ASSESSEE OF ALLEGED COMMITMENT TO SELL THE PRODUCTS AT LOWER PRICE WAS NOT SUBSTANTIATED, AND HENCE NOT ACCEPTABLE. THE LD.CI T(A) HAS ALSO OBSERVED THAT THE SAID JDB IS NOT EVEN A RELATED PARTY, AND THERE ARE NO OTHER TRANSACTIONS WITH THEM. THEREFORE, THE REVENUE AUTHORITIES ARE RIGHTLY HELD THAT BOOKS OF ACCOUNTS DID NOT REFLECT TRUE PICTURE, AND ACCORDIN GLY REJECTED UNDER SECTION ITA NO.2119/AHD/2017 7 145 OF THE ACT. AS STATED ABOVE, THERE IS NO EVIDE NCE OR EXPLANATION AS TO WHY IT HAS SOLD THE ITEMS LESS THAN THE PURCHASE PRICE BY MAKING LOSS OF RS.38.40 PER KG WHICH RESULTED IN UNDER INVOICING SALE BY RS .20,74,752/-. EVEN BEFORE ME ALSO, THE ASSESSEE IS UNABLE TO SUBSTANTIATE ITS CLAIM WITH ANY EVIDENCE OR VALID EXPLANATION. THEREFORE, I DO NOT FIND ANY D EFECT IN THE FINDING OF LD.CIT(A), WHICH I CONFIRM, AND THESE TWO GROUNDS O F APPEAL OF THE ASSESSEE ARE REJECTED. 9. IN GROUND NO.4(I) TO 4(IV) OF THE APPEAL, THE GR IEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING DISALLOW ANCE OF INTEREST OF RS.5,58,821/- OUT OF TOTAL BANK INTEREST OF RS.15,2 3,823/-. 10. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. AS IT EMERGES OUT FROM THE RECOR D, THE LD.AO NOTICED THAT THE ASSESSEE HAS PAID BANK INTEREST OF RS.15,23,823 /- AT THE RATE OF 10.72% ON AN OUTSTANDING OF RS.1,42,12,414/- TAKEN FROM THE B ANK. IT WAS FURTHER NOTICED BY THE AO THAT THE ASSESSEE HAS MADE LOAN A DVANCES OF RS.5,39,59,000/- TO M/S.PRAKASH ASSOCIATES, A RELAT ED PARTY AND CHARGED INTEREST RS.9,65,002/- AT THE RATE OF 2%. THE LD.A O CONSTRUED THAT THE ASSESSEE HAS NOT UTILIZED THE BORROWED FUNDS FOR IT S BUSINESS PURPOSE, RATHER DIVERTED TO SISTER CONCERN IN THE FORM OF LOAN AT L OWER RATE OF 2% PER ANNUM. TO THE SHOW CAUSE NOTICE ISSUED BY THE AO, EXPLANAT ION OF THE ASSESSEE FOUND TO BE NOT SATISFACTORY, HENCE THE LD.AO WORKED OUT DIFFERENCE OF INTEREST CHARGED AND RECEIVED AT RS.5,58,821/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. NOT SATISFIED WITH ORDER OF THE AO, THE A SSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE LD.CIT(A) ASSESSEE PLEAD ED THAT BORROWED FUNDS WERE USED FOR THE BUSINESS PURPOSE ONLY, AND THE AD VANCES GIVEN TO PRAKASH ASSOCIATE WAS OUT OF PREVIOUS ACCRUALS OF THE ASSES SEE. THE LD.AO HAS NOT ITA NO.2119/AHD/2017 8 ESTABLISHED ANY NEXUS BETWEEN THE INTEREST PAID ON BANK LOANS AND INTEREST INCOME EARNED FROM PRAKASH ASSOCIATES. THE LD.CIT( A) DID NOT ACCEPT EXPLANATION OF THE ASSESSEE, HE CONFIRMED ORDER OF THE AO. HENCE, THE ASSESSEE IS BEFORE THE TRIBUNAL. 11. ON DUE CONSIDERATION OF THE ABOVE FACTS, I DO N OT FIND ANY INFIRMITY IN THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE , BECAUSE BOTH HAVE CONCURRENTLY FOUND THAT THE ASSESSEE DOES NOT HAVE SUFFICIENT INTEREST FREE FUNDS OF HIS OWN TO ADVANCE THE SISTER CONCERN AT T HE LESSER RATE. THE CLAIM OF THE ASSESSEE WAS THAT LOAN WAS ADVANCED TO THE PART Y FROM SURPLUS AND/OR ACCRUAL DOES NOT CARRY ANY FORCE, BECAUSE NO DOCUME NTARY EVIDENCE OR MATERIAL WAS FURNISHED BY THE ASSESSEE EVEN BEFORE ME. IT IS PERTINENT TO NOTE THAT ON ONE HAND THE ASSESSEE IS OPTING TO SUFFER L OSS DUE TO SALES AT MUCH LESSER RATE AND INCURRING HEAVY INTEREST EXPENDITUR E TO THE EXTENT OF RS.15,23,823/- FOR LOANS TAKEN FROM BANK AT THE RAT E OF 10.72%, ON THE OTHER HAND, THE ASSESSEE IS ADVANCING LOAN TO SISTER CONC ERN AT THE RATE OF 2%. NOTHING HAS BEEN PLACED BEFORE ME BY THE ASSESSEE T O PERSUADE FOR TAKING A DIFFERENT VIEW THAN THE ONE TAKEN BY THE REVENUE AU THORITIES ON THIS ISSUE. THEREFORE THE DISALLOWANCE MADE BY THE ASSESSING OF FICER AND SUSTAINED BY THE LD. CIT(A) IS JUSTIFIED. I DISMISS THIS GROUND OF APPEAL. 12. IN THE RESULTS, APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 12 TH FEBRUARY, 2020 AT AHMEDABAD. SD/- (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 12/02/2020