9911796707
TMI Blog2018 (12) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 (hereinafter referred to as "the Act") dated 29.11.2013 relevant to Assessment Year 2011-12. 2. Assessee has raised following grounds of appeal:- "1.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming additions of Rs. 7,42,233/- on account of the deemed interest on the loans and advances given to the associate concerns. 2.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts by not allowing the claim of brought forward and set off of unabsorbed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee during the year has advanced loans to the firms, in which Directors were partners, amounting to Rs. 12,83,267/-. The assessee has not charged any interest on the amount/loan advanced to the sister concerns. As per the Assessing Officer, the firms were covered as specified persons under Section 40A(2)(b) of the Act. 5.1 The Assessing Officer also observed that the disallowance of interest was made by his predecessor in the Assessment Year 2008-09, 2009-10 and 2010-11. Accordingly, the Assessing Officer worked out the interest on such loans for Rs. 1,53,992/- only being 12% of Rs. 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, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussed above deleted the addition made by the lower authorities on account of interest on the diversion of interest bearing funds to interest free loans and advances. The relevant extract of the order is reproduced below:- "Disallowance on account of interest on loans to Associate Concern of Rs. 12,04,742/-. 6. During the course of assessment proceedings the assessing officer noticed that assessee had given loan and advances to its sister concerns to the tune of Rs. 1,33,33,689/- as on 31st March, 2007 but not charged any interest. Therefore, the assessing officer has charged notional interest @ 12% of Rs. 16,00,763 on the balance of outstanding loan on the ground that interest bearing funds were advanced to its sister concerns. 7. Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wable deduction or not in the present scenario? We further find that assessee has been following mercantile system of accounting and agreed that system while recognizing the interest income on accrual basis. In the past, it has been recognized interest income, however, on account of its nonrealization, assessee has claimed bad debt of those interest incomes which have been recognized on accrual basis and included in the taxable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee during the year under consideration has carried forward loss of Rs. 26,50,757/- pertaining to AY 2008-09 and the same was set off against the business income for the year under consideration. However, the Assessing Officer observed that the assessee has already claimed set off of the loss of Rs. 26,50,757/- pertaining to AY 2008-09 in the AY 2010-11 which was assessed under Section 143(3) of the Act dated 17.10.2012. Accordingly, the Assessing Officer denied the set off of losses carried forward from the AY 2008-09 for Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2008-09 after giving effect to the appellate order. We restore this matter to the file of assessing officer to decide it afresh after examination of the claim of the assessee as per law." 16.1 The present issue also depends upon the outcome of the decision of the Assessing Officer pertaining to the ASSESSMENT YEAR 2010-11 which needs to be decided afresh in pursuance to the direction of ITAT in ITA No. 562/Ahd/2014 vide order dated 27-11-2017. Accordingly in the interest of justice & fair play and in line of the direction of ITAT as discussed above, we restore the impugned issue to the file of the Assessing Officer for fresh adjudication in accordance with the provisions of law. Thus, this ground of appeal of the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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