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TMI Blog2018 (12) TMI 1565X X X X Extracts X X X X X X X X Extracts X X X X ..... rily dismissed the assessee’s alternate ground that interest may be levied @ 6.75%. Therefore we deem it appropriate to restore the issue to the office of the Assessing Officer to adjudicate the issue afresh in accordance with law after duly considering the contents of the original loan agreement as well as the loan restructuring agreement. The assessee will be at liberty to file evidences before the AO in support of its claim. The Assessing Officer shall also duly consider the alternate argument of the assessee that an interest rate of 6.75% may be applied - Appeal of the assessee stands partly allowed for statistical purposes. - ITA No. 264/Del/2014 - - - Dated:- 27-12-2018 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned CIT (A) ought to have allowed this expense u/s 37 of the Act. 2.2 That this amount has been subsequently recovered and taxed in AY 2013-14 . 3. That the learned CIT (A ) has erred in law and on facts of the case in sustaining the disallowance of ₹ 23,331/- of Prior Period Expenses . 2. Brief facts of the case are that the assessee is a non-banking finance company (NBFC) engaged in the business of banking, investment and broking in commodity exchange. The return for the captioned year was filed declaring a loss of ₹ 16,62,388/-. The assessee s case was selected for scrutiny. The assessment was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter called 'the Act') at ₹ 31,88,890/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at on 8.11.2015, the assessee had given an interest bearing loan of ₹ 321 lakh to M/s Sietz Technologies India Pvt. Ltd. with the stipulation of monthly interest and the borrower had followed the stipulated terms in the initial year but, thereafter, from January 2008, the interest payments were stopped and the borrowers had approached the assessee for restructuring the loan in view of their adverse liquidity position. It was further submitted that the assessee immediately recalled the loan amount but in view of the financial position of the borrower, loan recovery was not possible. Thereafter, the assessee agreed to restructure the loan with fresh stipulation that interest was to be charged on the loan amount up to 31.03.2008 and out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premise that the arrangement between the borrower and the assessee may be an afterthought to avoid charging of interest and reducing its taxable income. Similarly, the Ld. Commissioner of Income Tax (Appeals) also did not accept the assessee s pleadings regarding restructuring of loan on the premise that the restructuring did not appear to be a genuine transaction. The Ld. Commissioner of Income Tax (Appeals) has also observed that the assessee should have opted for invoking the arbitration clause as specified in the original loan agreement rather than restructuring the loan. Thus, it is very much apparent that both the lower authorities have rejected the assessee s contention on mere surmises and suspicion of the impugned agreement being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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