1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1075 OF 2009 The Commissioner of Income Tax – 8, Mumbai ..Appellant. Versus M/s.S.M. Dyechem Limited ..Respondent. Mr.J.S. Saluja for the appellant. None for the respondent. CORAM : V.C. DAGA & J.P. DEVADHAR, JJ. DATE : 6TH AUGUST 2009 P.C. : 1. Heard. The revenue has filed this appeal raising following questions of law : i) Whether in the facts and circumstances of the case and in law, the Tribunal erred in deleting the disallowance of Rs.3,40,050/- made on account of interest attributable to interest free advances with out appreciating the fact that the assessee failed to substantiate his claim of capital advances with evidence ? ii) Whether in the facts and circumstances of the case and in law, the Tribunal erred in restricting the disallowance to Rs.45,175/- as against Rs.3,89,306/- made under Section 37(2A) of the Act ? iii) Whether in the facts and circumstances of the case and in law, the Tribunal erred in deleting the addition of Rs.30,64,044/- made by the AO regarding the purchase made by the assessee ? 2 2. The first question raised is, whether the Tribunal is justified in deleting the disallowance on account of interest attributable to interest free advances. The Tribunal had recorded a finding that the amount was advanced for supply of capital goods and in fact the assessee has received plant and machinery in lieu of the amount advanced. This fact being not contested by the revenue, the first question raised by the revenue cannot be said to be substantial question of law arising out of the order of the tribunal. 3. So far as the second question is concerned, the tribunal has recorded a finding of fact that out of claim of Rs.3,89,306/-, only a sum of Rs.45,175/- represented entertainment expenses which was disallowable. As regards the balance amount, the tribunal has recorded a finding that the said amount consists of salary package such as reimbursement of medical and L.T.A., leave encashment allowance, reimbursement of outdoor expenses which are all permissible deductions in law. In this view of the matter, the second question raised by the revenue cannot be said to be a substantial question of law. 4. As regards third question is concerned, the tribunal has recorded a finding of fact that the addition of Rs.30,64,044/- made by the assessing officer on account of bogus purchases was based on conjectures and surmises and really there was no business done by the assessee. This finding being a finding of fact, the third question raised by the revenue cannot be said to be a substantial question of law. 5. In this view of the matter, the appeal is dismissed in limine with no order as to costs. (J.P. Devadhar, J.) (V.C. Daga, J.)