9911796707
TMI Blog2017 (9) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not apply. Therefore, we reiterate the view taken by the coordinate bench in REI Agro Industries Ltd. Vs. DCIT [2013 (9) TMI 156 - ITAT KOLKATA] and so, we do not find any merit in the ground of appeal raised by the revenue and hence, it stands dismissed. Addition u/s. 41(1) - remission of liability - Held that:- In the present case, there is nothing on record to suggest that there was remission or cessation of liability in the AY 2010-11. On the contrary, as per the statement of the Director of M/s. MCL recorded by AO on that u/s. 131 of the Act suggests that when he joined as a Director only in 2003 the same balance was lying with no movement which suggests that the remission of ₹ 33,98,930/- has taken place between 01.04.2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de for the earning the exempt income. The AO observes that pursuant to the said notice, the assessee had filed certain computation before him which was not acceptable for the AO, so he proceeded to compute the expenses incurred for earning exempt income as per Rule 8D of the Income Tax Rules, 1962 (hereinafter referred to as the Rules ). Thereafter, the assessee preferred an appeal before the Ld. CIT(A), who gave partial relief to the assessee by holding as under: After going through the facts and circumstances of the case and submission of the appellant, I find merit in their argument that so far Rule 8D(2)(ii) is concerned, since, there was no borrowed fund utilized in acquiring shares, the said rule is not applicable. Further, in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in REI Agro Industries Ltd. Vs. DCIT 144 ITD 141 and so, we do not find any merit in the ground of appeal raised by the revenue and hence, it stands dismissed. 5. Ground no.2 of appeal of revenue and the sole ground of appeal of the assessee emanates from the action of the Ld. CIT(A) in reducing the amount of addition made by the AO u/s. 41(1) of the Act from ₹ 4,15,00,000/- to ₹ 33,98,930/-. 6. Brief facts of the case are that the AO while going through the Balance Sheet of the assessee found that an amount of ₹ 15,22,03,728/- has been shown as unsecured loans for which the assessee was paying interest of ₹ 1,34,60,414/-. The AO also noted that an amount of ₹ 9,13,36,769/- was shown against M/s. Metals C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45,62,519/-. During the year ended 31.03.1994, the assessee had borrowed a loan of ₹ 3,50,00,000/- from M/s. Salasar Industrial Services Ltd. ( M/s. SISL) through banking channel from M/s. India Foils Ltd. and such principal amount of loan as on 31.03.2002 together with interest amounting to ₹ 8,02,74,250/- which comprised of principal amount of loan of ₹ 3,50,00,000/- and interest amount of ₹ 4,52,74,250/-. The aforesaid two loan creditor companies under an order of the Hon ble Calcutta High Court got amalgamated with M/s. MCL and as per the amalgamation order all the aforesaid principal amount of loan and outstanding, amount of interest were transferred to the books of M/s. MCL w.e.f. 01.04.2002 which is evident fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding interest amounting to ₹ 4,98,36,769/- is shown in the liability side to the tune of ₹ 9,13,36,769/- as against M/s. MCL and this amount had been carried forward in the books of the assessee. We note that the loan creditor has not waived either the principal amount or the outstanding interest amount or any such amount has been written back by the assessee in their books of account or such amount or any part of such amount has been credited in the P L Account of the assessee. M/s. MCL vide letter dated 25.03.2013 has confirmed that principal amount of ₹ 4,15,00,000/- receivable from the assessee and the interest receivable has been shown as ₹ 4,64,37,839/-. 9. We note that the Director of M/s. MCL in his sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we can safely infer that the amount of ₹ 9,13,36,769/- was lying with M/s. MCL as on 01.04.2002. The Ld. CIT(A) has noted from the letter dated 25.03.2013, which was the confirmation from M/s. MCL to the AO that there is a difference of ₹ 33,98,930/- which he confirmed and against which the assessee is before us. We note that as per section 41(1) of the Act, the remission or cessation of liability has to take place during the year under consideration. In the present case, there is nothing on record to suggest that there was remission or cessation of liability in the AY 2010-11. On the contrary, as per the statement of the Director of M/s. MCL recorded by AO on that u/s. 131 of the Act suggests that when he joined as a Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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