THE ITO, WARD-8(1),, AHMEDABAD vs. M/S. S.A.L. STEEL LTD.,, AHMEDABAD

The Revenue has challenged the action of the CIT(A) in deleting the disallowance of Rs. 92,04,000/- made by the AO with the aid of section 36(1)(iii) of the Act.

With the assistance of the Ld. Authorised Representative for the assessee and Ld. Departmental Representative for the Revenue we find that the assessee has given certain advances to six parties as named in the orders of the authorities below aggregating to above Rs. 767.00 lakhs. All the aforestated advances were given in earlier years thus have been brought forward from the earlier years. It is inter alia the case of the assessee that its holds own funds by way of share capital combined with with reserve and surplus aggregating to about Rs. 12564.00 lakhs which far exceeds, the corresponding interest free advances.

On these facts, we take note of the decision of the Co-ordinate bench of Tribunal in assessee’s own case concerning 2009-10 & 2010-11 in ITA No. 2013/Ahd/2013 and ors order dated 18.01.2017 where in the similar facts, the relief was granted to the assessee and no justification was found in resorting to disallowance under section 36(1)(iii) of the Act.

Accordingly, the appeal of the Revenue is dismissed.

The cross objection of the assessee merely supports the action of the CIT(A). In the absence of any substantive objection of the assessee emanating from the order of the CIT(A), the cross objection of the assessee is also dismissed as infructuous.

In the result, appeal of the Revenue and cross objection of the assessee are dismissed.