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TMI Blog2017 (3) TMI 1838X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of the case has thereby erred sustaining the following additions:- a. Addition on account of interest to Mahindra and Mahindra financial services Ltd u/s 40 (a) (ia) Rs. 13,17,961/ b. Advertisement and publicity expenses u/s 40 (a) (ia) Rs. 1,14, 958/- c. Renovation expenses Rs. 4,50,000/- The above additions have been made just for addition sake without appreciating the legal position and facts of the case. 3. At the outset it may be stated that ground raised with respect to the addition made on account of renovation expenses amounting to Rs. 4,50,000/- in ground No.1(c) was not pressed before us and the same is therefore treated as dismissed. 4. As for the rest of the additions made, taken up in ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch payments. Accordingly the expenditure of Rs. 13,17,961/-was disallowed u/s 40 (a) (ia) of the Act and added back the income of the assessee. 7. During appellate proceedings, the CIT (Appeals) after considering the assessee submissions held that the so-called "holding charges" were nothing but in the nature of interest, as defined under section 2(28A) of the Income Tax Act, 1961, since they were paid as financial charges to M/S MMFSL, a group company of M/S Mahindra and Mahindra Ltd and these payments had been shown in the profit and loss account under the head financial charges and subhead Interest and Bank charges. The Ld. CIT(appeal) held that as per the provisions of section 2(28A) the payment towards any services or other charges i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which emerge in the present case are that the assessee is a dealer of Mahindra vehicles and as per the mode of its operations which was explained to the authorities below and even before us and which has remained uncontroverted and unrebutted is that M/s Mahindra and Mahindra Ltd billed vehicles to the assessee at the month end to meet their sales target. The payment on account of the vehicles billed was made by Mahindra and Mahindra Financial Services, which is the group company of Mahindra and Mahindra Ltd. and till the vehicles were actually sold by the assessee and money collected from the buyers of the vehicles and repaid to Mahindra and Mahindra Financial Services Ltd, the servicing charges were collected by Mahindra and Mahindra Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was not a fee or charge in respect of credit facility availed by it from MMFSL. In view of the same the amount paid to MMFSL, we hold, was in nature of interest as defined under section 2 (28A) of the Act, which clearly states that interest includes any service, fee or other charge in respect of monies borrowed or debt incurred or in respect of any credit facility which has not been utilised. The assessee having not deducted tax at source on the same has contravened the provisions of section 194A of the Act and therefore the expenditure did not qualify for deduction as per the provisions of section 40(a)(ia) of the Act. We have therefore no hesitation in upholding the order of the Ld. CIT(Appeals) and confirming the disallowance made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He also found that the amount of the XYLO kits was different ,i.e Rs. 54,808/-. He therefore held that the assessee had failed to substantiate its new claim without proper evidence and therefore confirmed the addition of Rs. 47,808/-. For the balance disallowance made the assessee submitted that the payment made to one M/s Sample Enterprise of Rs. 44,270/- and to M/s Ad Vintage Communication of Rs. 22,880/- ,was below Rs. 50,000/- during the year and was not hit by the provisions of section 194C of the Act. Ld. CIT(Appeals) held that the payment credited at one time in the account of the above parties exceeded Rs. 20,000 and therefore the aggregate amount of Rs. 50,000/- during the year had not to be considered. He therefore upheld the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. The fact that the payment was made on account of purchase of XYLO kits is not disputed. Merely because the bill date and date of making payment is different or for the reason that the figure mentioned in the bill and the amount of actual payment made do not tally the contention of the assessee cannot be rejected. Nor can it be said that the assessee has failed to substantiate its claim. There is nothing untoward or unusual in making payments after the bills are raised or for that matter payments made not tallying actually with the amount raised in the bills. The fact remains that the assessee had make payments on account of purchase of XYLO kits, which has remained unrebutted before us. On account of this fact are we find merit in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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