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TMI Blog2013 (10) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... ands effected by him. It is well-settled that no prejudice could be caused to the subject (assessee) by any action or non action on the part of the court (A.O.). - The assessee's claim admitted and the matter restored back to the file of the A.O. to allow relief qua interest disallowed u/s.36(1)(iii) as exigible to the assessee on the basis of the material on record – Decided in favour of Assessee. Disallowance of Rent u/s 40A(2)(a) – Held that:- The assessee was required to justify its claim during the assessment proceedings by the A.O., to which it responded - The disallowance has been effected upon due consideration of the assessee's explanation - No case of any 'mistake', much less one apparent from the record, has been made out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion against bad debt 1,25,393 - Disallowance of interest relatable to interest free loans to directors 15,96,499 - Disallowance of rent under sec. 40A(2)(a) 1,20,000 19,12,581/- The taxable income, however, was computed at nil, i.e., after adjustment of claim qua brought forward depreciation. The business loss for the year was barred for carried forward u/s.72 in view of the return filed having been filed belatedly. The assessee did not appeal against the said assessment. It though moved an application u/s. 154 of the Act on 16.06.2008, claiming a mistake in respect of the last two disallowances listed supra, i.e., interest u/s.36(1)(iii) and of rent u/s. 40A(2)(a). The same stood rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts, therefore, the assessee's case for rectification u/s.154, the premise of which is to rectify a mistake apparent from the record, admitting of no debate, is not maintainable. The rejection of its rectification being confirmed, the assessee is in second appeal. 3. We have heard the parties, and perused the material on record. We shall proceed issue-wise. 3.1 Qua the first issue, a similar disallowance for A.Y. 2001-02 made in assessment (at Rs.8,86,925/-) stood deleted, i.e., for most part, by the first appellate authority, on the basis that the assessing authority had not considered, correspondingly, the interest-free loans to the assessee-company from the directors. As against the interest free loans to the directors for Rs.64.91 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch relief is warranted to the assessee, and which (verification) would normally exclude rectification inasmuch as the same is only with reference to a mistake/s apparent from the record, the A.O. has clearly and unmistakably committed a mistake in overlooking a vital fact of nearly the same sum, as it appears, having been availed of by the assessee on interest-free basis from its directors, to whom, as a class, interest-free loans had been given, and qua which the disallowance stands effected by him. It is well-settled that no prejudice could be caused to the subject (assessee) by any action or non action on the part of the court (A.O.). Under the circumstances, therefore, we admit the assessee's claim and restore the matter back to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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