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TMI Blog2014 (1) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ter for special audit - the AO did not examine the books of account in detail before arriving at the finding of charging of lower interest and also did not refer the matter for special audit - If the AO was of the view that the assessee has suppressed the interest, he should have given specific finding of fact and should have brought some material on record to justify his findings - even the book results of the assessee have not been rejected u/s.145(3) of the IT Act - the AO has merely estimated notional interest, which was not due or received by the assessee – Decided against Revenue. - ITA No. 62/Agra/2013 - - - Dated:- 28-6-2013 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri Waseem Arshad, Sr. D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. The assessee has given consolidated amount of interest on the advance. The AO while making his own calculation found that the assessee did not justify the position as rate of interest charged on loans. The AO, therefore, as per own calculation found that the assessee has suppressed interest income from advance by Rs.2,96,22,000/- and accordingly made the same addition by estimating the interest income on advances. The addition was challenged before the ld. CIT(A) and same submissions were made and it was submitted that the assessee furnished details of 63 branches and furnished their accounts and balance sheets as per schedule-III of Banking Regulation Act. The assessee has provided all the details and the AO without any basis estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that estimated by A.O. on average basis. Therefore the estimated addition made by the A.O. is held untenable. 6. In the result, appeal is allowed." 3. The ld. DR relied upon the order of the AO and submitted that the assessee has not furnished desired details before the AO. Therefore, the AO shall have to make estimate of income on account of interest earned, which should not have been deleted by the ld. CIT(A). On the other hand, the ld. counsel for the assessee reiterated the submissions made before the authorities below and submitted that all the accounts of the assessee have been audited as per banking regulations in which no defects have been pointed out by the AO and addition has been made without any basis. He has relied upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest. In case, there would have been any complication in the matter or the AO could not have examined the books of account, the proper course is provided in the Act for referring the matter for special audit. In this case, the AO did not examine the books of account in detail before arriving at the finding of charging of lower interest and also did not refer the matter for special audit. If the AO was of the view that the assessee has suppressed the interest, he should have given specific finding of fact and should have brought some material on record to justify his findings. We may also note here that even the book results of the assessee have not been rejected u/s.145(3) of the IT Act. It, therefore, appears that the AO has merely esti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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