9911796707
TMI Blog2018 (12) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A). If we remit the issue to the file to assessing officer in subsequent years by holding that income is to be recognized on accrual basis and thereafter, it is to be claimed as bad debt whether allowable or not, then, to our mind, it will be an academic and futile exercise because in reality assessee has not received any interest income from its sister concern. It is to be recognized that in all the aforesaid three years the income from interest on accrual basis remained unrecoverable which was allowed as a bad debt. Thus, in order to avoid multiplicity of the proceedings, we allow the appeal of the assessee on this issue accordingly. Claim of brought forward and set off of unabsorbed business losses and depreciation - Held that:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbed business losses and depreciation for the A.Y. 2008-09 without considering the facts of the appellate orders for the said year. 3.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has initiated penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 for the alleged concealment and/or furnishing of inaccurate particulars of income. 4.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in charging interest under section 234B and 234C of the Income Tax Act, 1961. 3. At the time of hearing, we note that there is a mismatch in the figure of the ground raised by the assessee and the amount of disallowance made by the Assessing Officer in the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer worked out the interest on such loans for ₹ 1,53,992/- only being 12% of ₹ 12,83,267/-. Thus, the amount of interest was disallowed and added to the total income of the assessee. 6. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the ld. CIT(A) who has confirmed the order of the Assessing Officer by observing as under:- 5.1 The Assessing Officer has made this addition on the basis of the assessment years in appellant's own case for the AYs 2008-09, 2009-10 2010-11. The Assessing Officer has also stated that such additions were confirmed by the CIT(A) in the earlier years. Hence, on the basis of appellate order for earlier assessment years, the addition made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of ₹ 1,33,33,689/- as on 31st March, 2007 but not charged any interest. Therefore, the assessing officer has charged notional interest @ 12% of ₹ 16,00,763 on the balance of outstanding loan on the ground that interest bearing funds were advanced to its sister concerns. 7. Aggrieved assessee preferred appeal before the ld. CIT(A). The ld. CIT(A) has sustained the addition to the extent of ₹ 12,04,742/- after excluding the interest charged of ₹ 1,56,262 on the customer balance representing sale made earlier year of ₹ 13,02,182/-.The ld. CIT(A) has sustained the part of the addition on the ground that assessee had given interest bearing funds to its sister concerns on which it was paying interest to the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income as bad debt of the assessee of those interest incomes has been allowed by the ld. CIT(A) and not disputed by the revenue in further appeal. In assessment year and subsequent years, assessee has stopped charging interest and accounting it in the income on accrual basis. This is not a sound accounting policy as at outset it should have been recognized the same as income on accrual basis and thereafter would have given the deduction of claim of bad debt which the assessee failed in these years. Further, when we visualize this situation as a whole traveling from three assessment years, then, it is observed that interest income was recognized on accrual basis and thereafter claimed as a bad debt of its non-realization, this has been allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.10.2012. Accordingly, the Assessing Officer denied the set off of losses carried forward from the AY 2008-09 for ₹ 26,50,757/- only against the profit for the year under consideration. 13. Aggrieved, the assessee preferred an appeal before the ld. CIT(A) who has directed to allow such losses after verification by observing as under:- 6.3 The Assessing Officer is directed to verify the contentions of the appellant on the basis of assessment records for AY 2008-09, 2009-10 2010-11. After such verification and considering the appellant s submissions, the AO will allow the set off of business loss and unabsorbed depreciation as per law. 14. Being aggrieved by the order of the ld. CIT(A), the assessee is in second appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
