9911796707
TMI Blog2014 (1) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... ef facts as emerged from the relevant orders are that the assessee is engaged in the business of trading yarn and are mostly purchased through imports. The assessment under section 43(3) of the IT Act was completed determining total income at Rs.19,04,050/-. In the assessment so finalised, the AO made various additions, which were deleted by the learned CIT(A). With regard to first ground, the learned DR submitted that the assessee has made payment of transport expenses to a single transport contractor directly and no TDS was deducted therefrom as per law. However, the finding of the CIT(A) that there is no contract between the assessee and the transporter, and the impugned payment is for purchases as well as services, which is not tenable, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and trading thereon, and receive the goods from transporters, through clearing and forwarding agents. The AO has made the impugned addition on the assumption that the assessee was having agreement with the transporter for transportation of its goods, was not based on any evidence on record. Therefore, in the absence of any documentary proof to establish that there is an agreement between the assessee and the transporter for carriage of goods, we are not inclined to interfere with the order of the CIT(A) on this issue, which is confirmed and this ground no.1 of the Revenue is dismissed. 5. The ground no.2 of the Revenue's appeal is as under: "2. On the facts and in the circumstances of the case and in law, the ld.CIT(A) has e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) on this issue, and dismiss the ground no.2 of the Revenue. 7. The ground no.3 of the Revenue reads as under: "3. On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of Rs.1,11,813/- made on account of disallowance of bad debts expenses." 8. We have heard both the parties on the issue, and perused the orders of the Revenue authorities. As the facts emerge from the record, the assessee claimed bad debts of Rs.1,11,813/- for the money advanced to Vector Divisas for import of goods and claimed as deduction. The AO denied the same on the ground that the same was not incurred in the previous year and was incurred fully and exclusively for the purpose of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the assessee was not reasonable and excessive, and that instead of exhausting the credit facility from the banks, the assessee borrowed the funds from the persons specified under section 40A(2)(b) of the Act. It was the contention of the assessee before the learned CIT(A) that since the assessee is a trader and most of the goods are being purchased through imports from other countries, and the payments were to be made either by opening LC or by TT/DP, which has to be made 100% immediately to release the documents otherwise heavy charges have to be paid. It was further submitted that payment to the importers/suppliers have to be made within the time contracted otherwise the deal would be cancelled. Besides this, the assessee has to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a prudent businessman does normal course of business. These submissions of the assessee were not disputed by the Revenue. The Revenue has mainly disputed the rate of interest and payment of interest made to some 'specific persons'. In the circumstances narrated hereinabove, we do not find that the rate of interest @12% claimed by the assessee was too excessive or unreasonable, so as to prohibit the assessee from claiming the deduction in respect of loan taken from the relatives or for that matter, 'specified persons.' The Assessing Officer had made general observations without pointing out any specific instance where an interest bearing borrowing utilised for non-business purpose by the assessee. Therefore, in our view, the CIT(A) has ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear to year, and that the additions seems to be made only on assumption and hurried generalization. The learned counsel for the assessee has drawn our attention to page no.10 of the paper book, containing reply of the assessee dated 14.11.2008 to the show cause notice of the AO dated 7.11.2008, wherein the assessee has clarified on the issue of claim of brokerage raised by the AO in the assessment proceedings. With regard to necessity of engaging brokers for the sale goods, it was clarified by the assessee in the reply that in the earlier year total sales were not made through brokers, but during the year the entire sales were made through brokers, looking to the market situations and to avoid possibilities of bad debts. The assessee has al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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