9911796707
TMI Blog2016 (3) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) came to the conclusion that no evidence whatsoever has been produced before him by the assessee in support of the claim made. In this regard the stand of the assessee has been that he has submitted a paper book duly indexed containing total 89 pages and has categorically submitted that in the normal provisions of the Act, so there was no justification of making impugned addition on account of old credit balance of the creditor concerned for the year under consideration. CIT(A) was not justified in upholding the impugned addition made by the Assessing Officer - Decided in favour of assessee Disallowance on account of interest - Held that:- In the present case, the assessee has paid interest only to three parties as stated abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) has grossly erred in confirming disallowance of ₹ 3,22,037/- on account of sundry creditors, when there is no justification for making impugned disallowance. The same deserves to be deleted. 2. On the facts and law as well as in the circumstances of the case of the appellant, the Ld. CIT(Appeals) has grossly erred in confirming disallowance of ₹ 83,673/- on account of interest, when there is no justification for making impugned disallowance. The same deserves to be deleted. 3. The first issue is with regard to the disallowance of ₹ 3,22,037/- on account of sundry creditors. During the course of assessment proceeding, the Assessing Officer noticed that in the assessee s books of accounts, there appeared an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 2011-12. Therefore, as per the normal provisions of the Act there is no justification for making impugned addition on account of old credit balance of the creditor for the year under consideration. During the course of appellate proceedings, the assessee submitted a written submission dated 28.05.2015. According to Authorized Representative for the assessee, the Ld. CIT (A) has also noted that there being no further transaction on account of internal dispute and settlement of claim of the party, the very same amount is appearing in the party's ledger account as closing credit balance as on 31/03/2011. Thus, this being an old account showing opening credit balance in the previous year and there being no other transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f expense of ₹ 83,673/- in the Profit Loss Account. Therefore, he disallowed the entire interest expense claimed by the assessee, holding that the assessee has neither charged nor received interest on loan and advance of ₹ 2 lakh. However, according to the assessee he has shown interest income of ₹ 79,637/- as appearing under the head indirect income in the Profit Loss Account. Further, the assessee claimed to have submitted the details of the same before the Assessing Officer, which reads as under:- 4.1 Thus, the interest liability in regards of the above parties was claimed to be genuine and incurred during the course of business and there was no element of borrowing money for nonbusiness purposes. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heet of the assessee under the head current liabilities which are trading liabilities whom the assessee has paid interest in the previous year and has paid in the past as well. Such claim in the past has been accepted as genuine in the past completed assessments. In this background, it was submitted that the assessee was already having sufficient interest free funds to the extent of ₹ 2,86,73,849/-, in the form of Sundry Creditors'. The entire interest free funds when considered, the interest free amount of ₹ 2 lakh allegedly treated as investment with M/s Sukun Business doesn't exceed the total of interest free funds as stated above. Therefore, the Authorized Representative for the assessee contended that no disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
