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TMI Blog2016 (9) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... s annexure-III depicting comparative chart of the two payees. DR raises a very strong objection that the assessee has not deliberately placed on record Annexures-I 5 crores in lieu of reserving 50000 sq. mtr. plot in its project submitted in correspondence with the payee dated 04.08.2008. It accepted MPSEZ’s booking withdrawal on 01.04.2009 sought vide letter dated 17.03.2009 with interest stipulation @ 18% till actual payment. Assessee’s ledger maintained disclosing payment of 5 crores and interest in question made between 18.02.2010 to 26.03.2010. All this followed the regular assessment dated 28.05.2012 not making any interest disallowance. These facts indicates that the Assessing Officer had made all due enquiries, examined the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in question take into account assessee’s interest expenses difference i.e. 18% and 10% (supra) for directing AO to frame a fresh assessment. These two interest sums arise in totally different backgrounds not having any similarity. We are further of the opinion that the CIT has erred in directing the Assessing Officer to frame a fresh assessment in these peculiar facts and circumstances. We accept assessee’s arguments to reverse the CIT’s order under challenge in view of our discussions hereinabove. No other point was argued in the course of hearing except those specifically dealt in our instant adjudication. Assessee’s appeal is allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... company 36,03,288 It was further observed that the assessee company had paid interest @ 18 percent to Mundra Port & Special Economic Zone (MPSEZ) amounting to ₹ 81,07,398/- wherein relative of the Director is Director in the company. The payment made to MPSEZ falls within the ambit of provisions of section 40(a)(2)(b) of the Act. However, Shri Vasant S Adani, Director, was paid interest @ 10 percent. The assessee has paid interest @ 10 percent to Shri Vasant S Adani, which was at par to the percentage of interest on loans available in the open market. Hence the payment of interest made to MPSEZ was required to be restricted to that extent as against @18 percent claimed by the assessee. 2.2. The Assessing Officer failed to examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to examine the issue with regard to interest paid to the person covered u/s. 40A(2)(b) of the Act, in the light of correct facts as available in the assessment record and/or by making relevant inquiry and calling for details in this regard and thereby accepted claim of the assessee without proper verification. Therefore, the assessment order has been passed by the assessing officer on wrong assumption of facts and without applying proper provisions of Income Tax Act and without due application of mind. Hence the above assessment order is erroneous in so far as it is prejudicial to the interest of revenue. In this regard reliance is placed on the judgement of the Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (SC) 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has not deliberately placed on record Annexures-I & II filed before the CIT. We put up a special query as to whether there is any attempt to mislead the bench or contents of the relevant paper book are not correct. The reply received is in negative. The Revenue's objection is accordingly overruled. 6. We proceed further to notice that the assessee had acquired the sum in question of ₹ 5 crores in lieu of reserving 50000 sq. mtr. plot in its project submitted in correspondence with the payee dated 04.08.2008. It accepted MPSEZ's booking withdrawal on 01.04.2009 sought vide letter dated 17.03.2009 with interest stipulation @ 18% till actual payment. Page 38 of the paper book is assessee's ledger maintained disclosing pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at section 263 is not to be invoked for making further enquiries in case the Assessing Officer had access to all records and he framed assessment after making the relevant enquiries. We accept assessee's argument challenging the CIT's view that the Assessing Officer ought to have made further enquiries as narrated hereinabove accordingly. 8. Next argument of the assessee is that it is payee M/s MPSEZ has already been assessed at maximum marginal rate. It quotes board's circular dated 06.07.1968 clarifying that an interest expenditure is not to be disallowed in case there is no tax saving at payee's behalf. Learned authorised representative places on record M/s MPSEZ's return filed for the impugned assessment year itself stating net total i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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