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TMI Blog2010 (1) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals of the assessees are directed against two independent orders of the Commissioner of Income-tax (Appeals) III, Hyderabad, for asst. year 2003-04, both dated 15-2-2007. Since common issues arise for consideration in both these appeals, we heard the appeals together and we dispose of the same by this common order. 2. The first ground of appeal is with regard to disallowance of interest on outstanding loan. Shri S.Rama Rao, learned counsel for the assessee, submitted that in the case of Smt. K.Geetha, the disallowance of interest of ₹ 22,051 on the outstanding loan was made without considering the fact that the loan was obtained for the purpose of earning income. Likewise, in the case of Shri K.Narasimha Rao, interest of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Apex Court in the case of V.P. Gopinathan (supra). Therefore, we do not find any reason to interfere with the orders of the lower authority. Accordingly, we confirm the same. 5. The next ground of appeal is with regard to addition of ₹ 6,39,220 in the case of K.Geetha and ₹ 9,72,990 in the case of K.Narasimha Rao as deemed dividend. Shri Rama Rao, learned counsel for the assessee, submitted that for the purpose of treating the payment to the beneficial shareholders as deemed dividend, the Assessing Officer has to compute the accumulated profit. Referring to the order of the CIT (A), the learned counsel submitted that though the CIT (A) found that the accumulated profit at the end of the year was ₹ 9,72,990, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es also have not brought on record any material for computing the accumulated profit on the date of payment of the money by the company. In that factual situation, in our opinion, the accumulated profit on the date of payment of money by the company to the beneficial shareholders has to be computed. In the absence of any material to compute the accumulated profit, the matter needs to be re-examined by the AO. Accordingly, we set aside the orders of the lower authorities on this issue and remit the matter back to the file of the AO. The AO shall re-consider the issue of deemed dividend and compute the accumulated profit on the date on which the money was paid to the assessees and thereafter decide the issue afresh in accordance with law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the assessee produced confirmation letters. The AO appears to have rejected the confirmation letters filed by the assessee on the ground that all the confirmation letters were in similar form. The AO has also found that the confirmation letters do not contain details of identity and source of income of the creditors. The assessee now claims that she is ready to file the necessary details before the AO. When the assessee is ready and willing to establish the identity and creditworthiness of the creditors and the genuineness of the transaction, in our opinion, remitting the matter back would not cause prejudice to the interests of the Revenue in any way. The intention of the Parliament is to compute the right taxable income. When the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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