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TMI Blog2021 (9) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned addition which was wrongly sustained by the Ld. CIT(A). In the absence of any nexus proved between the interest bearing funds and the debtors the impugned addition deserves to be deleted, accordingly the same is deleted. Addition on account of loss in bardana - HELD THAT:- AO framed the assessment ex parte and the assessee furnished the documentary evidence in the form of purchase and sale bills of bardana before the Ld. CIT(A). In such type of business the bardana is used to store goods like paddy, rice and rice bran etc. and again reused, the value of bardana deteriorate with passage of time and there is also wear and tear, therefore, the purchase price and the sale price of bardana cannot be the same. Moreover nothing is brought on record that he assessee inflated the purchases or suppressed the sales, therefore, the addition made by the A.O. and sustained by the Ld. CIT(A) on account of loss in bardana was not justified, accordingly the same is deleted. Appeal of the Assessee is allowed. - ITA No. 1053/Chd/2019 - - - Dated:- 20-9-2021 - N. K. Saini, Vice President And R.L. Negi, Member (J) For the Appellant : S.K. Mukhi, Advocate For the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1,55,28,019/-. She worked out the proportionate interest to ₹ 4,41,065/- and considered the same as not permissible in terms of Section 36(1)(iii) of the Act. She made the addition of the said amount. She also observed that the assessee claimed bardana loss of ₹ 2,82,444/- without furnishing any documentary evidence, it was also added to the income of the assessee. The A.O. passed the assessment order ex parte under section 144 of the Act on 16/03/2015 by making the aforesaid additions. 5. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and as regards to the addition made on account of interest u/s. 36(1)(iii) of the Act, submitted as under: In the assessment proceeding before respected JCIT, Kurukshetra, this fact was barely and lengthily discussed and explained with all documents, copy of a/cs vice-versa of debtors, who were rice purchasers of the trade in the year of big-loss it is not possible in any circumstance to collect interest when the payments of rice are at risk. To charge the interest as they are only traders who sells and purchases rice in the routine. This is custom of the trade to secure the business payments for the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and perused the material available on the record. In the present case, nothing is brought on record to substantiate that there was any agreement between the assessee and the debtors for charging of interest on the trade debits which were on account of purchases of the Rice made from the assessee. In the present case, the assessee furnished the copies of the accounts from the debtors in the said accounts also no interest was charged and moreover the A.O. had not established any nexus between the interest bearing funds with the interest free advances. On the contrary the debtors were on account of purchases made from the assessee, therefore, the A.O. was not justified in invoking the provision of Section 36(1)(iii) of the Act and making the impugned addition which was wrongly sustained by the Ld. CIT(A). In the absence of any nexus proved between the interest bearing funds and the debtors the impugned addition deserves to be deleted, accordingly the same is deleted. 10. The next grievance of the assessee vide ground No. 4 relates to the sustenance of addition of ₹ 2,82,442/- made by the A.O. on account of loss in bardana. 11. The facts related to this issue in brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.10.2008/163 6.08/- 5.11.2008/1036 10.19/- 17.10.2008/ 10.60/- 6.11.2008/1038 10.19/- 8.11.2008161 6.00/- 26.11.2008/1128 25.74/- 21.11.2008/173 6.00/- From the above it can be inferred that as to how a prudence business man will buy the things on the higher price and sold the same on the lesser price within the same period. Further, before the undersigned despite allowing the assessee an opportunity for explaining the said loss, he totally failed to submit any explanation to justify his loss on account of Bardana. Moreover, books of accounts as required have not been produced despite the service of letter through affixture. From the above comments and the appellant's replies, it is clear that the latter has not been able to rebut the A.O.'s logical reasoning on this account. The appellant has given vague explanations on this issue which are not substantiated by evidence. Therefore, the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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