9911796707
TMI Blog2020 (5) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. The grounds raised by the assessee are as under: "1. That the Learned Commissioner of Income Tax (Appeals)-1, Ludhiana has erred in confirming the addition of Rs. 53,57,352/- made u/s 36(1)(iii) of the Income Tax Act, 1961 by the learned Assessing Officer on account of Less interest charged from the partners, without any basis and without giving any reasons in his order. Therefore, addition confirmed by the Learned Commissioner of Income Tax (Appeals)-1, Ludhiana is illegal, uncalled for unwarranted and needs to be deleted. 2. That the Learned Commissioner of Income Tax (Appeals)-1, Ludhiana has erred in confirming the addition of Rs. 1,24,954/- made u/s 36(1)(iii) of the Income Tax Act, 1961 by the Learned Assessing Officer on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission paid at Rs. 42,840/-, without any basis and without giving any reasons in his order, whereas identity, creditworthiness and genuineness of the creditors proved by the assessee before the learned Commissioner of Income Tax (Appeals)- 1, Ludhiana as well as before the learned Assessing Officer. Therefore, addition of Rs. 1,00,83,240/- made by the learned Assessing Officer and confirmed by the learned Commissioner of Income Tax (Appeals)-1, Ludhiana is illegal, uncalled for unwarranted and needs to be deleted. 5. That the appellant craves to leave or to amend the ground of appeals before or at the time of hearing." 2. Ld.Counsel for the assessee took up Grounds No. 1 and 2 of the appeal together, pointing out that they related to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while making the disallowance since the assessee, in fact, had paid interest on its unsecured loans at an average rate of 10% and not 15% as computed by the A.O. and therefore, having charged interest at a higher rate @ 12% on the impugned debit balance in the partners capital account and advances made, there was no reason for making any disallowance of interest in the present case. The ld. counsel for the assessee drew our attention to the audited financial statements of the assessee firm for the impugned year placed at paper book page Nos. 59 to 73 and pointed out from the balance sheet for the impugned year placed at paper book page No. 59 that the total unsecured loans taken by the assessee during the year amounted to Rs. 10,35,05,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, the assessee we find has paid interest on unsecured loans during the impugned year at an average rate of 10% which is demonstrated from the facts and figures of unsecured loan and interest paid thereon reflected in the financial statements of the assessee which are duly audited. This fact ,the revenue has been unable to controvert before us. Since the basic premise with the revenue for making disallowance in the present case U/s 36(1)(iii) of the Act was that the assessee had charged less interest on the advances made to its partners and others as opposed to that paid on borrowings made by it, the same does not survive since the assessee has demonstrated that it had actually paid less interest on borrowings and charged more fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bindu Khemka 5,00,000/- 84,000/- 6,000/- 5,90,000/- The ld. counsel for the assessee drew our attention to the assessment order and pointed out that the A.O. had made the impugned addition for the reason that the summons issued to the said party had remained unserved and the assessee had not been able to produce them before the A.O. and in some cases, the assessee had not submitted even the copy of income tax returns or the PAN details and the bank details of these parties. The A.O., therefore, had held that the assessee had not been able to prove the identity of the givers of unsecured loans and also the genuineness and creditworthiness of the givers and accordingly had made the addition U/s 68 of the Act. The ld. Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditors holding them to be ingenuine primarily for the reason that the bank statements submitted of these parties showing transactions were either unreadable or incomplete or were not submitted at all. The revenue, therefore, was of the view that the explanation of the assessee that the transactions had had taken place through banking channels remained unsubstantiated. Since the assessee has demonstrated before us that the bank statements of all the loan givers was filed to the revenue authorities and is therefore, available, we consider it fit to restore the issue back to the A.O. to consider the bank statements of all the loan depositors alongwith other evidences filed and adjudicate the issue afresh thereafter in accordance with law. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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