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TMI Blog2015 (10) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... s furnished before the Assessing Officer during the course of such fresh proceedings. First letter of the assessee in the fresh proceedings is dated 05.09.2006 by which it furnished Fund flow statement, Balance sheet and profit and loss account for the year in question and for the earlier year,details of discount charges paid,statement of account, parties in support of receipt payment of discounting charges, copies of account of parties tracing the original funds, user of funds and repayment of charges with discounting charges etc. Another letter was filed before the Assessing Officer on 24.11.2006 producing complete books of account, details of finance charges paid with bifurcation of parties and rate of interest and a copy of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing Grounds of Appeal: 1.On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in deleting the addition of ₹ 1,32,08,738/-on account of discount charges made by A.O. 2.On the facts and in the circumstances of the case and in law, the learned CIT(A) failed to appreciate that the assessee firm had not been able to prove that the discounting charges have been paid wholly and exclusively for the purpose of the business of the assessee. 3.On the facts and in the circumstances of the case and in law, the learned CIT(A) failed to appreciate that the assessee was given opportunity to produce the copies of bills of discounting/finance charges which were not produced at the time of original assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e preferred an appeal before the First Appellate Authority (FAA).Before him it was contented that the finding of the AO were in contradiction with the directions of the Tribunal,that the it had actually incurred finance charges and other expenses,that bill discounting transactions were in the nature of financial transactions,that all the transactions were routed through banking channels,that it had repaid the principle amount of funds borrowed from time to time,that it had produced the necessary documentary evidences in support of the claim,that the discounting charges were in nature of interest paid on monies borrowed,that same had to be allowed as a deduction u/s.36(1)(iii)of the Act, that the facts in the present appea1 were identical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of discounting charges/ interest of ₹ 46, 32, 752.Briefly stated the facts of the case are that the original assessment in this case was completed, making addition, inter-alia, of ₹ 46,32,752/- on account of discounting charges/interest.When the matter finally came up before the Tribunal, the Tribunal vide order dated 28.11.2006 passed in ITA No.639/M12004 restored the issue to the file of A.O. with a direction to examine as to whether such discount/interest was incurred by the assessee in carrying on of its business. This order was passed by the Tribunal by following another order by the Tribunal in the case of another group concern of the assessee the Fellowship corporation vs.JCIT[ITA No.4352/MumI2001]. Pursuant to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal funds, user of funds and repayment of charges with discounting charges etc. Another letter was filed before the Assessing Officer on 24.11.2006 producing complete books of account, details of finance charges paid with bifurcation of parties and rate of interest and a copy of assessment order passed by the A.O. for the preceding year in which similar deduction was allowed.The present assessment order was passed by the AO on 18.12.2006 after filing of the above referred documents by the assessee.It is surprising that the Assessing Officer did not make a whisper, in the assessment order of such details having been filed by the assessee What to talk of adversely commenting ,the A.0.even did not bother to incorporate or discuss such facts in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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