THE ITO 13(3)(2), MUMBAI V. SHRI HITESH I BHANSALI, MUMBAI

ITA 967/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1292 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 21-04-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 08-02-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOMAGYAN PAL
• Keywords: Business income; Income from undisclosed sources; Opportunity of being heard; Source of fund; Proportionate interest
• Section: 133(6); 68

Judgement Text

ITA NO. 967/MUM/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI R S PADVEKAR, JM & SHRI R K PANDA, AM ITA NO. 967/MUM/2008 ( ASST YEAR 2004-05 ) THE INCOME TAX OFFICE WARD 13(3)(2), MUMBAI VS SHRI HITESH I BHANSALI 102 JYOTI CHAMBERS 372 NARSI NATHA ST MASJID BUNDER(E) MUMBAI 9 (APPELLANT) (RESPONDENT) PAN ADTPB1038P ASSESSEE BY: SHRI VIJAY MEHTA REVENUE BY: SHRI SOMAGYAN PAL O R D E R PER R S PADVEKAR: IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD CIT(A)-XIII, MUMBAI FOR THE ASSESSMENT YEAR 2004 -05 DATED 29.11.2007. 2 THE GROUND NO.1 READS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD CIT(A) HAS ERRED IN DIRECTING THE A.O. TO DELETE TH E ADDITION OF RS. 67,66,421/- MADE ON ACCOUNT OF CREDITORS PAID OTHER WISE WITHOUT APPRECIATING THAT THE ASSESSEE HAS FAILED TO ESTABL ISH THAT THE PAYMENT HAD BEEN MADE BY HIS DEBTORS IS HIS CREDITORS. 2 THE ASSESSEE IS IN THE BUSINESS OF TRADING OF ORG ANICS, INORGANICS, PIGMENTS AND CHEMICALS IN THE NAME AND STYLE OF M/S INDO PIGMENT INDUSTRIES LTD, WHICH IS A PROPRIETARY CONCERN OF T HE ASSESSEE. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING THE TOTAL INCO ME AT RS. 1,46,026/- FOR AY ITA NO. 967/MUM/2008 2 2004-05. THE ASSESSEES CASE WAS SELECTED FOR SCRUT INY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. EXAMINED THE BA LANCE SHEET AND IT WAS NOTICED THAT AS ON 31.3.2004 THE UNSECURED LOANS W ERE OF RS 5,17,775/- AS AGAINST RS. 72,84,196/- AS ON 31.3.2003. THE A.O. SOUGHT THE DETAILS OF THE PARTIES IN RESPECT OF THE UNSECURED LOANS AND ADVAN CES AS ON 31.3.2003 AND 31.3.2004 AS WELL AS THE DETAILS IN RESPECT OF THE REPAYMENTS MADE DURING THE FINANCIAL YEAR 2003-04 OF RS. 67,66,421/- AND A LSO REQUESTED THE ASSESSEE TO EXPLAIN THE SOURCE AND EVIDENCES THERE OF. THE ASSESSEE FILED LIST OF UNSECURED LOANS. THE ASSESSEE ALSO FILED THE LIS T OF SUNDRY DEBTORS WHO HAD MADE THE PAYMENTS ON BEHALF OF THE ASSESSEE TO THE LOAN CREDITORS. THE A.O. HAS GIVEN THE DETAILS IN RESPECT OF THE CREDIT ORS AS WELL AS THE DETAILS OF THE PARTIES WHO HAD MADE THE PAYMENTS TO THOSE SEVE N CREDITORS AT PAGE 2 & 3 OF THE ASSESSMENT ORDER. 2.1 THE ASSESSEE EXPLAINED TO THE A.O. THAT HE HAS SOLD GOODS TO VARIOUS PARTIES AND ALL THE SALES ARE RECORDED IN THE BOOKS OF ACCOUNT. THE DEBTORS WERE INSTRUCTED TO MAKE THE PAYMENT DIRECTLY TO THE LOAN CREDITORS AND NECESSARY CREDIT WAS GIVEN TO THE DEBTORS ACCOUNT. THE ASSESSEE ALSO EXPLAINED THAT HE IS TRYING TO OBTAIN THE CONFIRMAT ION LETTERS FROM THE DEBTORS BUT HE HAS NO FURTHER TRANSACTIONS WITH THE M HENCE, HE IS FINDING IT DIFFICULT TO OBTAIN THE CONFIRMATION LETTERS FROM T HEM. THE ASSESSEE ALSO EXPLAINED THAT THE ACCOUNT ENTRIES HAVE NO TAX IMPL ICATION AS THE RESULT OF THE P & L A/C IS NOT AFFECTED. 2.2 THE A.O. DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND IN HIS VIEW; THE TRANSACTIONS WERE NON-GENUINE AS THE ASSE SSEE HAS NOT PROVED THAT THOSE DEBTORS HAVE DIRECTLY MADE THE PAYMENTS TO TH E LOAN CREDITORS AS PER THE INSTRUCTIONS OF THE ASSESSEE. THE A.O., FURTHE R RECORDED THAT IN THE AY 2001-02, THOSE CREDITORS WERE TREATED AS NON-GENUIN E AND THE ADDITIONS WERE MADE U/S 68 OF THE ACT AND HENCE, THE ASSESSEE IS TRYING TO GIVE COLOUR OF GENUINENESS TO THE SAID CREDITORS BY SHOWING RE PAYMENT. THE A.O. MADE ADDITION OF RS. 67,66,421/- IN RESPECT OF THE AMOUN T CLAIMED TO HAVE BEEN PAID BY THE DEBTORS DIRECTLY TO THE LOAN CREDITORS DURING THE F.Y. 2003-04. ITA NO. 967/MUM/2008 3 THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE TH E LD CIT(A), WHO DELETED THE ADDITION. THE OPERATIVE PART OF THE ORDER OF THE LD CIT(A) ARE GIVEN IN PARA 3.5 AS UNDER: 3.5 I HAVE CONSIDERED THE CONTENTION OF THE APPELL ANT. THE A.O.S OBSERVATIONS WHILE MAKING THE ADDITION ARE CONTRADI CTORY. THE A.O. IS SAYING SUNDRY DEBTORS AND SUNDRY CREDITORS ARE BOTH GENUINE AND BOGUS. ASSESSMENT ORDER IS PASSED TO ASSESS THE INC OME OF ASSESSEE. IN THAT SENSE IT IS NOT CLEAR HOW APPELLANTS ATTEM PT TO REDUCE SUNDRY DEBTORS WILL LEAD TO ADDITION OF SAME AS INCOME. AD DITION IS POSSIBLE ON ACCOUNT OF SUPPRESSED SALES. THE A.O DID NOT DETECT ANY SUPPRESSED SALES. WHEN SALES ARE ACCEPTED I CANNOT UNDERSTAND HOW THERE CAN BE SOME SUPPRESSED DEBTORS. THE A.O. WHILE MAKING THE ADDITION DID NOT MENTION UNDER WHICH PROVISIONS OF THE ACT THE ADDIT ION IS BEING MADE. WHEN THE APPELLANTS SALES FIGURE IS ACCEPTED THERE CANNOT BE AN ADDITION OF SAME FIGURE WHICH IS REFLECTED IN SUNDR Y DEBTORS LIST. THE ADDITION MADE BY THE A.O. IS BASELESS AND THERE IS NO PROVISION IN THE ACT WHERE ADDITION ON ACCOUNT OF SUPPRESSED DEBTOR CAN BE MADE FURTHER THE DEBTOR APPEAR IN THE BOOKS OF A/C OF TH E APPELLANT. HENCE, IT IS NOT CLEAR HOW THE DEBTORS APPEARING IN BOOKS OF A/C CAN BE TREATED AS SUPPRESSED DEBTORS. THE ADDITION OF RS. 67,66,42 1/- MADE BY THE A.O. IS THEREFORE BASELESS AND UNSUSTAINABLE. THE A .O IS THEREFORE DIRECTED TO DELETE THE SAME. THE GROUND SUCCEEDS. NOW THE REVENUE IS IN APPEAL HERE BEFORE US. 3 WE HAVE HEARD THE PARTIES. THE LD DR ARGUED THAT THE LD CIT(A) HAS NOT AT ALL DEALT WITH THE REASONS GIVEN BY THE A.O. FOR REJECTING THE CLAIM OF THE ASSESSEE. IT IS ARGUED THAT THE ASSESSEE HAS NO T PRODUCED A SINGLE CONFIRMATION LETTER FROM THE DEBTORS WHO HAVE ALLEG EDLY MADE PAYMENT TO THE LOAN CREDITORS AT THE INSTRUCTIONS OF THE ASSES SEE . HE FURTHER SUBMITS THAT IN THE AY 2001-02 ADDITIONS ARE MADE IN RESPEC T OF THE SAID LOAN ITA NO. 967/MUM/2008 4 CREDITORS TREATING AS NON-GENUINE CASH CREDITS U/S 68 AND THIS ASPECT HAS BEEN CONSIDERED BY THE A.O. HE FURTHER SUBMITS THA T THE ASSESSEE DID NOT EVEN PROVIDE THE ADDRESSES OF THE DEBTORS AND THAT SUPPORT THE CASE OF THE A.O. 3.1 PER CONTRA, THE LD COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE A.O. WAS NOT PROHIBITED FROM MAKING ENQUIRY. IT IS ARGUE D THAT THERE IS NO REVENUE IMPLICATION AND THE ADJUSTMENTS ARE ONLY MA DE IN THE BALANCE SHEET AND ALL THE SALES ARE RECORDED IN THE BOOKS OF ACCO UNT AND HENCE, THE A.O. MADE THE ADDITIONS ONLY SUSPICION. LD COUNSEL PLEAD ED THAT THE ORDER OF THE LD. CIT(A) MAY BE CONFIRMED. 4 WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIE S AND ALSO PERUSED THE RELEVANT MATERIAL BEFORE US. AS PER THE DETAIL S AVAILABLE IN THE ASSESSMENT ORDER, IT IS SEEN THAT THERE WERE TOTAL SEVEN LOAN CREDITORS TO WHOM THE 13 DEBTORS HAVE MADE THE PAYMENTS AS PER T HE INSTRUCTIONS OF THE ASSESSEE. THE LD CIT(A) HAS DELETED THE ADDITION O N THE REASONS THAT SALES ARE RECORDED IN THE BOOKS OF ACCOUNT AND THE GENUIN ENESS OF THE SALES ARE NOT DISPUTED. WE DO NOT AGREE WITH THE REASONS GI VEN BY THE LD CIT(A) FOR ACCEPTING THE PLEA OF THE ASSESSEE. 4.1 AS PER THE ASSESSMENT ORDER, THE ASSESSEE DID N OT PRODUCE EVEN A SINGLE EVIDENCE OR A CONFIRMATION LETTER IN RESPECT OF THE ALLEGED PAYMENTS MADE BY THE DEBTORS DIRECTLY TO THE LOAN CREDITORS. IF THOSE PARTIES HAVE MADE THE PAYMENTS ON BEHALF OF THE ASSESSEE IN RESP ECT OF THE SALES MADE TO THEM, IT WAS NOT DIFFICULT FOR THE ASSESSEE TO GET CONFIRMATION. MOREOVER, ANOTHER ASPECT WE FIND THAT THE ADDITION IS MADE U/ S 68 IN RESPECT OF THE SAME CREDITORS FOR AY 2001-02. IN OUR OPINION, TH E DOUBT EXPRESSED BY THE A.O. IS CORRECT; PROBABLY, THE ASSESSEE TRIED TO MA KE OUT THE CASE THAT THOSE WERE GENUINE LOANS CREDITORS. MOREOVER, THE ASSESSE E DID NOT PRODUCE EVEN SINGLE CONFIRMATION LETTER FROM ANY OF THE DEBTORS WHICH IS ALSO SURPRISING. IN OUR OPINION, THIS ISSUE NEED RECONSIDERATION BY THE A.O; THEREFORE, WE SET ITA NO. 967/MUM/2008 5 ASIDE THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE SAME DE-NOVO. THE ASSESSEE IS DIRECTED TO FILE THE CONFIRMATION LETTE RS AS WELL AS THE DETAILS AND THE ADDRESSES OF THE DEBTORS, WHO HAVE MADE THE PAY MENTS ON BEHALF OF THE ASSESSEE TO THE A.O.. IF IT IS FOUND THAT THE DEBT ORS HAVE MADE THE PAYMENTS ON BEHALF OF THE ASSESSEE THEN, NO ADDITION SHOULD BE MADE. THE A.O. IS DIRECTED TO VERIFY THE DETAILS ACCORDINGLY AND DECI DE THE ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUND NO.1 IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 5 GROUND NO.2 READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES F THE CASE, AND IN LAW, THE LD CIT(A) HAS ERRED IN DIRECTING THE A.O. TO DELETE TH E ADDITION OF RS. 5,97,064/- MADE ON THE GROUND THAT IT IS PAID BY TH E ASSESSEE OUT OF HIS UNDISCLOSED SOURCES OF INCOME WITHOUT APPRECIATING THAT THE CLAIM OF PAYMENT BY DEBTOR M/S CHEMICAL TRADING CO TO THE CR EDITOR M/S INDO PIGMENT INDUSTRIES WAS NOT PROVED. 5.1 THE ASSESSEE MADE PURCHASES OF RS. 5,97,064/- F ROM ONE M/S CHIRAG CORPORATION AND IT IS CLAIMED THAT AMOUNT WAS PAID BY M/S CHEMICAL TRADING CO ON BEHALF OF THE ASSESSEE. THE ASSESSEE PRODUCED LEDGER COPY, WHICH WAS REPRODUCED AT PAGE 4 OF THE ASSESSMENT BY THE A.O. THE A.O. HAS OBSERVED THAT THE ASSESSEE ONLY MADE A PAYMENT OF RS. 25,000/- BY CHEQUE AND THE OUTSTANDING AMOUNT WAS MADE BY M/S C HEMICAL TRADING CO ON BEHALF OF THE ASSESSEE. THE ASSESSEE DID NOT PR ODUCE ANY DETAILS IN RESPECT OF THE CHEQUE, DATE OF PAYMENT AND OTHER EV IDENCES TO PROVE THAT IN FACT THE PAYMENT IS MADE BY M/S CHEMICAL TRADING CO . THEREFORE, THE A.O. PROCEEDED TO MAKE THE ADDITION TO THE EXTENT OF RS. 5,97,064/. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD CIT(A), WHO D ELETED THE ADDITION MADE BY THE A.O. THE LD CIT(A) WAS OF THE OPINION THAT THE A.O. HAS NOT BROUGHT ANYTHING ON RECORD TO ESTABLISH THAT THE PAYMENT OF RS.5,97,064/- WAS OUT OF UNDISCLOSED SOURCES; ACCORDINGLY, HE GAVE THE RE LIEF TO THE ASSESSEE. NOW, THE REVENUE IS IN APPEAL HERE BEFORE US. ITA NO. 967/MUM/2008 6 6 WE HAVE HEARD THE PARTIES AND ALSO PERUSED THE RE LEVANT MATERIAL BEFORE US. THE ASSESSEE HAD PASSED A JOURNAL ENTRY DEBITING THE ACCOUNT OF M/S CHEMICAL TRADING CO. IT IS CLAIMED THAT THE SAI D AMOUNT WAS MADE BY M/S CHEMICAL TRADING CO.. IT IS SEEN THAT THE TRANS ACTIONS WITH M/S CHEMICAL TRADING CO ARE MADE DURING THE FINANCIAL Y EAR 2003-04 ONLY. IN OUR OPINION, THE REASONS GIVEN BY THE LD CIT(A) ON THIS ISSUE ARE CORRECT AND NO INTERFERE IS CALLED FOR; ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD CIT(A) ON THIS ISSUE. 7 GROUND NO.3 READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES F THE CASE, AND IN LAW, THE LD CIT(A) HAS ERRED IN DIRECTING THE A.O. TO DELETE TH E ADDITION OF RS.1,25,984/- MADE ON ACCOUNT OF BOGUS SALES RETURN S WITHOUT APPRECIATING THAT EXCESS SALES RETURNS OF RS. 1,25, 984/- HAVE BEEN REDUCED FROM THE SALES DURING THE YEAR AND THEREFOR E, THE PROFIT IS UNDERSTATED. 8 WE HAVE HEARD THE PARTIES. THE A.O. EXAMINED THE DETAILS FURNISHED BY THE ASSESSEE IN RESPECT OF THE SALE AS WELL AS S ALES RETURN. THE A.O. HAS OBSERVED THAT IN THE CASE OF LIBERTY SHOES LTD, TH E SALES ARE SHOWN AT RS.7,07,200/- AND THE SALES RETURN ARE SHOWN AT RS. 8,33,184/-. THE A.O. ISSUED NOTICE U/S 133(6) TO THE SAID PARTY FOR VERI FICATION WHETHER THE TRANSACTION WAS GENUINE. AS PER THE REPLY FURNISHE D BY THE SAID PARTY, THE TOTAL SALES WERE TO THE EXTENT OF RS. 7,07,200/- AN D NOT RS. 8,33,184/-. THE A.O. MADE THE ADDITION OF RS. 1,25,984/- THAT WAS IN RESPECT OF THE DIFFERENCE IN THE FIGURE OF SALES AND SALES RETURN M/S LIBERTY SHOES LTD. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD CIT( A), WHO DELETED THE SAME. 9 THE ASSESSEE CONTENDED BEFORE THE LD CIT(A) THAT THERE WAS A MISTAKE IN THE DETAILS OF THE SALES RETURN. THE ENTIRE AMOU NT WAS RECEIVED BACK AS REJECTED GOODS AND THE SALES RETURN CANNOT BE MORE THE SALES. THE LD CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE. THE LD CIT(A) HA S OBSERVED THAT SALES AND THE SALES RETURN WERE RECORDED IN THE BOOKS OF ACCO UNT AND RESPECTIVE ITA NO. 967/MUM/2008 7 FIGURES WERE TALLIED WITH THE FIGURES FURNISHED BY M/S LIBERTY SHOE LTD. ACCORDINGLY, THE LD CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE SALES RETURN CANNOT BE MORE THAN THE TOTAL SALES. 10 ON THE PERUSAL OF THE ASSESSMENT ORDER, THE A.O. HAS ONLY MENTIONED THAT THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPTA BLE BUT THE EXPLANATION GIVEN BY THE ASSESSEE IS NOWHERE QUOTED. IN OUR OPI NION, AS THE LD CIT(A) VERIFIED THE BOOKS OF ACCOUNT AND THE FACTS NO INTE RFERE IS CALLED FOR IN THE ORDER OF THE LD CIT(A) ON THIS ISSUE; ACCORDINGLY, WE CONFIRM THE SAME. 11 GROUND NO.4 READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES F THE CASE, A ND IN LAW, THE LD CIT(A) HAS ERRED IN DIRECTING THE A.O. TO DELETE TH E DISALLOWANCE OF RS. 3,07,351/- MADE ON THE GROUND OF INTEREST BEARING F UNDS UTILIZED IN GIVING INTEREST FREE LOANS WITHOUT APPRECIATING THA T THE ASSESSEES CLAIM OF GIVING PURELY BECAUSE ADVANCES WAS NOT SUBSTANT IATED AND THAT THE ASSESSEES CLAIM BEFORE THE CIT(A) THAT THE INTERES T BEARING FUNDS REVIVED WERE UTILIZED FOR GIVING INTEREST FREE ADVA NCES WAS NOT RAISED BEFORE THE AO. 11.1 THE A.O. HAS OBSERVED THAT THE ASSESSEE HAS GI VEN LOANS AND ADVANCES OF RS. 28,92,650/- TO THE FOLLOWING THREE PARTIES: I) SHEBAWADS PVT LTD RS. 8,00,00 0/- II) SUSHILA SONAWANT RS. 1,35,000/- III) CHEMICAL DE ENTERPRISE RS. 29 ,92,650/- 11.2 THE A.O ISSUED NOTICES TO THE ABOVE PARTIES U/ S 133(6) IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTIONS. THE NO TICE ISSUED TO M/S SHEBAWADA PVT LTD WAS RETURNED UN-SERVED. APART FR OM THIS FACT THE A.O. HAS NOT STATED ANYTHING IN THE ASSESSMENT ORDER. T HE ASSESSEE WAS ASKED TO STATE AS TO WHY THE PROPORTIONATE INTEREST SHOU LD NOT BE DISALLOWED ON ITA NO. 967/MUM/2008 8 THE SAID AMOUNT WHEN THE ASSESSEE HAS PAID RS 3,07 ,351/- AND CLAIMED THE SAME BY DEBITED TO THE P&L ACCOUNT. THE A.O. S TATED THAT THE ASSESSEE HAS USED THE INTEREST BORROWED FUNDS FOR ADVANCING THE SAME AMOUNT TO THE ABOVE THREE PARTIES. THE A.O. WAS OF THE OPINION TH AT THE INTEREST @ 12% ON THE SAID AMOUNT IS TO BE REQUIRED TO BE DISALLOWED BUT HE DISALLOWED RS. 3,07,351/- WHICH WAS THE TOTAL INTEREST EXPENDI TURE CLAIMED BY THE ASSESSEE WHICH WAS LOWER THAN THE FIGURE WORKED OUT @ 12%. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD CIT(A) AND FO UND FAVOUR. 11.3 THE CIT(A) HAS ACCEPTED THAT THE ADVANCES WERE MADE IN THE COURSE OF BUSINESS AND MOREOVER, THE PARTIES WERE ITS SISTER CONCERNS. THE LD CIT(A) HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE INTE REST WAS PAID TO SBI FOR THE LOAN TAKEN FOR INVESTMENT IN STOCK-IN-TRADE AN D THE SAME WAS NOT UTILISED FOR MAKING ADVANCES TO THE ABOVE PARTIES. 12 WE HAVE HEARD THE PARTIES AND ALSO PERUSED THE R ELEVANT MATERIAL BEFORE US. WE HAVE ALSO CONSIDERED THE REASONS GIV EN BY THE LD CIT(A). THE A.O. HAS NOWHERE STATED THAT THE ABOVE PARTIES ARE NEITHER THE SISTER CONCERNS OF THE ASSESSEE OR HAVING ANY INTEREST IN THE BUSINESS OF THE ASSESSEE. MOREOVER, THE A.O. HAS NOT REJECTED THE P LEA OF THE ASSESSEE THAT THE ADVANCES ARE MADE IN THE COURSE OF ITS BUSINESS . IN OUR OPINION, THE ADVANCES ARE MADE IN THE COURSE OF THE BUSINESS; NO DISALLOWANCE CAN BE MADE IRRESPECTIVE OF THE FACT THAT THE ADVANCES ARE MADE BY USING THE INTEREST BEARING FUNDS. WE DO NOT SEE ANY REASON T O INTERFERE WITH THE FINDINGS OF THE LD CIT(A); ACCORDINGLY, THE ORDER O F THE LD CIT(A) IS CONFIRMED ON THIS ISSUE ALSO. ACCORDINGLY RELEVANT GROUND IS DISMISSED. ITA NO. 967/MUM/2008 9 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 25 TH , DAY OF JUNE 2010. SD/- SD/- ( R K PANDA) ACCOUNTANT MEMBER (R S PADVEKAR ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 25 TH , JUNE 2010 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI