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TMI Blog2014 (7) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... – Failure to furnish explanation – Held that:- The assessee has made advance to the party and has made purchases - advance made was subsequently adjusted also - CIT(A) right in holding that no notional interest was liable to be charged - it is not the case of the AO that the advance made by the assessee was not trade advance but loan advanced - it is the real income that is taxable and not notional income – Decided against Revenue. Deferred revenue expenses disallowed – Held that:- CIT(A) has deleted the addition and gave a finding that disallowance on account of deferred revenue expenditure was already added back by the assessee in the computation of income - the disallowance made by the AO has resulted in double disallowance, which ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to verify the genuineness of the claim by the assessee during the assessment stage. 4 .That the appellant craves leave to add, delete or modify any of the grounds of appeal before or at the time of hearing. 3. Apropos ground No.1 Disallowance of interest : On this issue the AO observed that on verification of point No.B-5 of Notes on the A/c attached with the Balance Sheet and P/L A/c. it had gathered that during the year the assessee debited a sum of ₹ 34,18,026/- to its P/L A/c. As per requisition point no.27 the assessee was asked to submit From the notes on a/cs. (B-5) it had gathered that he has debited ₹ 34,18,026/- as interest from his P/L A/c in the regard furnish (i) what was the basis of this calculation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est was claimed by the appellant on account of debentures and term loans which was also claimed and allowed to the appellant in the earlier assessment years. In view of above, I find no reason for disallowance of entire amount of interest. The AO is directed to delete the disallowance made by him. The ground no.1 is allowed. Against the above order the Revenue is in appeal before us. 5. We have heard both the counsel and perused the records. We find that the above addition was made by the AO on the ground that the assessee has not furnished any information. However, the ld. CIT(A) has granted relief to the assessee on the plea that letter dated 03.03.2004 was given to the AO giving necessary detail. The ld. CIT(A) has mentioned the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 8. We have heard both the counsel and perused the records. We find that the assessee has made advance to the said party and has made purchases from the same. The advance made was subsequently adjusted also. In these circumstances we agree with the ld. CIT(A) in holding that no notional interest was liable to be charged. We note that it is not the case of the AO that the advance made by the assessee was not trade advance but loan advanced. It is also a settled law that it is the real income that is taxable and not notional income. In these circumstances we uphold the order of the ld. CIT(A) on this issue. 9. Apropos ground no.3 addition on account of deferred revenue expenditure : In this case the AO has made a disallowance of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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