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TMI Blog2021 (2) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... -bearing fund - we hereby remit the matter back to the file of the ld. AO to compute the proportionate interest with respect to the interest-bearing fund extended to the assessee s sister concern and thereafter pass appropriate order in accordance with law and merit based on our observations mentioned herein above. Disallowance of interest paid on late payment of TDS - penalty levied invoking the provisions of section 37(1) of the Act - HELD THAT:- Any expenditure incurred by the assessee for any purpose which is an offence or which is prohibited by law shall not be allowed to be claimed as deduction. In the case of the assessee, the late payment of TDS and the penalty levied towards the late payment of TDS cannot be treated as an offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the penalty levied thereon amounting to ₹ 1,54,016/- invoking the provisions of section 37(1) of the Act. 3. The brief facts of the case are that the assessee is a Private Limited Company engaged in the business of manufacturing and selling the products of Bread Stalk, filed its return of income for the AY 2013-14 on 28/09/2013 admitting total loss of ₹ 1,39,15,934/- under normal provisions and book loss of ₹ 1,72,74,712/- U/s. 115JB of the Act. Initially the return was processed U/s. 143(3) of the Act and thereafter, the case was selected for scrutiny under CASS and the assessment was completed on 24/3/2016 U/s. 143(3) of the Act wherein the Ld. AO made addition of ₹ 15,61,749/- being the disallowance of propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister concerns. It was therefore pleaded that the addition made may be deleted. The Ld. DR on the other hand vehemently argued in support of the orders of the Ld. Revenue Authorities and prayed for confirming the same. 7. We have heard the rival submissions and carefully perused the materials on record. On perusing the balance sheet of the assessee, we find that assessee company s paid-up equity share is ₹ 4 Crs and total net reserves and surplus is Rs. (-) 1,57,10,956/- as on 31/3/2013 (paper book page no.43). Thus, the capital of the assessee company has eroded to ₹ 2,42,89,044/- (400,00,000 1,57,10,956). Hence, the interest free fund owned by the assessee as on 31/3/2013 is only ₹ 2,42,89,044/-. Therefore, the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of business or profession . [(Explanation-1)] For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.] 10. From the above it is apparent, that any expenditure incurred by the assessee for any purpose which is an offence or which is prohibited by law shall not be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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