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TMI Blog2015 (10) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... nting 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 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion that the borrowing were not made for the purpose of appellant's business. The appellant submits that the CIT (A) failed to take into consideration the submission and the fund flow statement filed before him which would establish that the borrowed funds were utilized by the appellant for the purpose of its business activity. 3. The CIT (A) erred in arriving at the conclusion that there was no business activity carried out by the appellant and therefore the appellant was not entitled to claim deduction on account of said discounting charges I interest under section 36(1)(iii) of the Act. 4. The CIT (A) failed to take into consideration the fact that the borrowing were made in the earlier year for the purpose of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um/2004 dated 16. 8. 2007, the Tribunal restored the matter back to the file of the AO with following directions: In view of the facts and circumstances we restore the issue involved interest he appeal here before us to the file of the AO to decide the same afresh in the light of the decision of the Tribunal in assessment year 1998-99. The Assessing Officer is directed to allow reasonable opportunity of being heard to the assessee. We order accordingly. During the reassessment proceedings the AO again disallowed the interest charges of ₹ 96. 94 lacs. He held that during the set aside proceedings the assessee had not filed any evidence to claim that those were genuine bill discounting charges on interest paid, that they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emical -(Rs. 3. 89 crores); Synchem Chemicals (I) P. Rs. (1. 45 crores); and Sanoja Investment (P. ) Ltd. (Rs. 22. 90 lacs). It was also found that there was debit balance in account of the partners current account to the extent of ₹ 1. 54 crores. From the above the FAA held that the assessee had obtained loan from LPL and made interest free advances to sister concerns, that no interest income was admitted from the group entities, that the purpose of borrowing was not made for business activities but to give interest free advances to the sister concerns, that order of CIT(A)-19, Mumbai cannot be followed in a routine manner, that the perusal of the balance sheet as on 31/3/1997 showed that the loans were utilized only for making loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) and it reads as under: Ground Nos. I to 3 relate to disallowance 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/M/2004 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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