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TMI Blog2022 (3) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... ys Investment and Loan (India) Ltd. Accordingly, the AO is directed to conduct a proper inquiry in that regard including giving opportunity to the assessee. Consequently ground no. 1 is determined in favour of the assessee for statistical purpose. Disallowance of interest on the advances made by the assessee - HELD THAT:- There is no reason to differ. All the machinery for which the advance was given were part of the replacement machinery and said machineries for which the advance was given was not for extension of existing business. The Bench is thus inclined to decided this ground in favour of the assessee. Addition u/s 37(1) of difference in the rate of interest - HELD THAT:- It can be observed that the assessee has paid bill d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the order u/s 250(6) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 23.02.2017 in appeal no. 263/15-16 passed by Commissioner of Income Tax (Appeals), Faridabad (hereinafter referred to as the First Appellate Authority or FAA) in appeal preferred against order dated 26.02.2016 u/s 143(3) of the Act passed by Income Tax Officer, Ward-1(3), Faridabad (hereinafter referred to as the Ld. AO). 2. In brief, the facts of the case are that the appellant is engaged in the business of manufacturing and trading of auto parts components. It had e-filed its return declaring income of ₹ 28,83,670/- on 29.09.2013 and the same was processed u/s 143(1) of the Income Tax Act. The appellant had also declared deemed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as CIT (A) ), grossly erred in confirming the addition of ₹ 2,47,363/- made u/s 40(a)(ia) of the income tax act, 1961 which is bad in law and not called for (Ground No-1) 2. That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (hereinafter referred to as CIT (A) ), erred in confirming the addition of ₹ 1,50,808/- made u/s 36(1)(iii) of the income tax act,1961 which is bad in law and not called for (Ground No-2) 3. That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (hereinafter referred to as CIT (A) ), erred in confirming the addition of ₹ 1,25,821/- made u/s 37(1) of the income tax act, 1961 of diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sandhar technologies Ltd. Appellant company claimed interest on discounting charges of bills amounting to ₹ 17,34,336/- which were disallowed by Ld. AO and Ld. FAA has restricted the disallowance to an amount of ₹ 1,25,821/- being difference on account of rate of difference as paid to Sandhar Automotaves (Dhumspur) and M/s. Sandhar Enterprises. It was submitted that expenditure interest is based on commercial expediency and to cover up temporary cash flow mismatch. It was submitted that Bill Discounting expenses cannot be restricted on account of difference in the rate of interest between two entities. 7. In regard to Ground no. 5 it was submitted that the process charges of ₹ 78,652/- were paid to SIDBI for sanction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other sources of information or documents to establish if certificate was issued by Barclays Investment and Loan (India) Ltd. Accordingly, the AO is directed to conduct a proper inquiry in that regard including giving opportunity to the assessee. Consequently ground no. 1 is determined in favour of the assessee for statistical purpose. Ground no. 2 10. As with regard to ground no. 2 in assessee s own case for the assessment year 2012-13, the Co-ordinate Bench of the Tribunal has examined the issues based on the basis of relevant statutory provisions and judicial pronouncements while determining the controversies of disallowance of interest on the advances made by the assessee. There is no reason to differ. All the machinery fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus inclined to decided this ground in favour of the assessee. GROUND NO. 5 13. In regard to this ground no 5 it can be observed that the sanction letter placed on record by the assessee makes it apparent the loan of the 70,00,000/- , taken from SIDBI was to meet margin money for working capital requirement of the company. The interest on this loan stands allowed by the Ld. AO as revenue expenditure that being so there could be no justification to disallow the process charges made for procuring the loan as capital expenditure. Thus, only to the extent of ₹ 78,652/- impugned addition of total ₹ 2,42,136/- is liable to be set aside. Accordingly this ground is allowed partly. 14. Resultantly, the appeal filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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