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TMI Blog2018 (5) TMI 2062X X X X Extracts X X X X X X X X Extracts X X X X ..... peal - HELD THAT:- . A perusal of the Assessment Order clearly shows that the assessee did not have adequate opportunity to substantiate its claim before the AO. This being so, the issue in respect of the addition is restored to the file of the AO for re-adjudication. Here, it is to be kept in mind that an addition cannot be made merely on the basis of a statement recorded or a unsupported disclosure made by an assessee in the statement recorded in the course of a survey. Assessment is to be made on the basis of evidences. In regard to the issue of the disallowance of the interest expenditure u/s.57, it is noticed that the issue is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the case of the sister concern company M/s.Arohi Infrastructure Pvt. Ltd., and M/s.Aparti Constructions Pvt. Ltd., referred to supra, which is also been extracted earlier. In these circumstances, on identical findings, the issue in this appeal is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case. Consequently, the appeal filed by the assessee is partly allowed for statistical purposes - ITA Nos. 2389 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of earning interest income therefore is allowable under section 57(iii) of the Income Tax Act. 5. The learned CIT(A) erred in law in not adjudicating the ground raised by the appellant with regard to Tax credit of ₹ 2,03,95,000/- which is duly reflected in Form 26AS and Annual tax Statement under section 203AA of the Income Tax Act. 6. The learned CIT(A) erred in law in not directing the Assessing Officer to give credit to taxes which are duly reflected in Form 26AS and Annual tax Statement under section 203AA of the Income Tax Act. 7. The learned CIT(A) erred in law in levying interest under section 234B, 234D and 244A of the Income Tax Act. For these and other grounds that may be rendered at the time of hearing it is most humbly prayed that the Hon ble Tribunal may be pleased to allow the appellants appeal and thus render justice. 6. It was submitted by the Ld.AR that in regard to Ground No. 2 the assessee is in the business of civil contract and other related works. The assessee had during the relevant Assessment Year been awarded a contract work by its holding company M/s.Marg Ltd., for the development work at the site of M/s.Dishman Infrastru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and as the funds were not immediately required, the same had been advanced to sister concerns and the interest received was set off as against the interest expenditure and the surplus offered to tax. It was a submission that the AO did not allow the assessee the benefit of the claim of expenditure u/s.57 of the Act. 7. In reply, the Ld.DR vehemently supported the order of the AO the Ld.CIT(A). 8. The Ld.DR drew our attention to Para Nos.7.1 to 7.3 of the order of the Ld.CIT(A). It was a submission that the order of the AO and the Ld.CIT(A) are liable to be sustained. 9. We have considered the rival submissions. 10. A perusal of the Assessment Order as also the order of the Ld.CIT(A) shows that the allegation is that the assessee has subcontracted the work taken from M/s.Marg Ltd., to M/s.Coastal Projects Pvt. Ltd. and the area of the contract work sub-contracted was higher than the area which has been taken on contract by the assessee from M/s.Marg Ltd. A perusal of the Work Order dated 02.02.2010 tallies with that of the Assessment Order but a copy of the Invoice raised by M/s.Coastal Projects Pvt. Ltd., clearly shows that the area to be approximately 9 lakhs S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessees have paid interest on such loans taken clearly, if the assessees have used such loans for the purpose of giving further loans then the interest paid is liable to be allowed and it is only the net of the interest which is liable to be assessed as the income of the assessees. The AO shall also verify as to whether the Memorandum and Articles of Association of the assessees company permit the assessees company to give loans. The AO shall, after verifying the same, re-adjudicate the issue in accordance with law. 12. Respectfully following the decision of the Co-ordinate Bench of this Tribunal, the issue is restored to the file of the AO for re-adjudication on identical lines as decided in ITA No. 2391/Chny/2017 ITA No. 2392/Chny/2017 dated 03.05.2018. Consequently, the appeal filed by the assessee is partly allowed for statistical purposes. ITA No. 2390/Chny/2017 AY 2011-12 13. In the assessee s appeal, the assessee has raised the following grounds: 1. The order of the learned Commissioner of Income (Appeals)-3, is wrong, illegal and is opposed to law. 2. The learned CIT(A) erred in disallowing the Cost of Operation of ₹ 9,00,00,000/- against wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did not have adequate opportunity to substantiate its claim before the AO. This being so, the issue in respect of the addition of ₹ 9.00 Crs. is restored to the file of the AO for re-adjudication. Here, it is to be kept in mind that an addition cannot be made merely on the basis of a statement recorded or a unsupported disclosure made by an assessee in the statement recorded in the course of a survey. Assessment is to be made on the basis of evidences. In regard to the issue of the disallowance of the interest expenditure u/s.57, it is noticed that the issue is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the case of the sister concern company M/s.Arohi Infrastructure Pvt. Ltd., and M/s.Aparti Constructions Pvt. Ltd., referred to supra, which is also been extracted earlier. In these circumstances, on identical findings, the issue in this appeal is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case. Consequently, the appeal filed by the assessee is partly allowed for statistical purposes. 19. In the result, the appeals filed by the assessee in ITA Nos. 238 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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