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TMI Blog2022 (9) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the order of A.O, assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 20.07.2016 granted substantial relief to the assessee. 3. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal and has raised the following grounds : 1. "Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in deleting the addition of Rs.2,43,90,691/- made on account of accrued interest by ignoring that the assessee was following the mercantile system of accounting and the assessee did not actually written off or reversed the interest credit entry in its accounts? 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in deleting the addition of Rs.2,43,90,691/- made on account of accrued interest, ignoring the facts that this deduction was not claimed in the original return of income or by way of revised return of income and accordingly the claim made during the assessment proceedings was not in line with the decision of Hon'ble Supreme Court in the case of Toetze India Limited vs. CIT reported in 284 ITR 323 (SC)? 3. Whether on the facts and circumstances of the case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is following the mercantile system of accounting and that no claim of deduction on account of accrued interest has been made in the return of income nor assessee has filed any revised return under section 139(5) of the I.T. Act, 1961 and the deduction has been claimed during the course of assessment proceedings which was not in line with the ratio of decision of Hon'ble Supreme Court in the case of Goetze India Ltd., vs., CIT reported in 284 ITR 323 (SC). He accordingly denied the claim of deduction and made the addition. 5. Aggrieved by the order of A.O. assessee carried the matter in appeal before the Ld. CIT(A) who deleted the addition made by the A.O. While deleting the addition, the Ld. CIT(A) has given a finding that since accrued interest on delayed payment of outstanding sales was not accepted by the concerned party viz., M/s. Polyplastics Automotive (India) Pvt. Ltd., the assessee has rightly deducted the alleged income from its computation of income and the assessee was justified in not offering the income to tax in view of real income theory for taxation according to which no tax can be charged on hypothetical and unilateral income. He has further given a finding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment proceedings A.O. noticed that the Director of the Company Mr. Pawan Goyal deposited a sum of Rs.2,74,42,000/- as share capital. The assessee was asked to prove the identity, creditworthiness and genuineness of the transaction and identity of the deposits as per the provisions of Section 68 of the I.T. Act, 1961. The assessee, inter alia, filed copy of return of income of Mr. Pawan Goyal, copy of his bank statements. The A.O. on perusing the details furnished by the assessee noted that Mr. Pawan Goyal had introduced his income from undisclosed sources by depositing cash in his own bank account. The assessee was, therefore, asked to prove genuineness of the cash deposits, to which, assessee, inter alia, submitted that Mr. Pawan Goyal is Proprietor M/s. Goyal Polymers engaged in Trading of Plastic Granules. It was submitted that a search operation under section 132 of the I.T. Act, 1961 was conducted on 22.10.2009 on residential and business premises of Mr. Pawan Goyal. Thereafter, consequent to the notice issued under section 153A of the I.T. Act, 1961, Mr. Pawan Goyal had filed his return of income disclosing aggregated income of Rs.4,20,00,000/- as unaccounted sales sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w in appeal before the Tribunal. 14. The Ld. D.R. took us through the findings of A.O. and supported the order of A.O. 15. The Learned Authorised Representative for the Assessee reiterated the submissions made before the authorities below and supported the order of Ld. CIT(A). 16. We have heard the Learned Representative of both the parties and perused the material available on record. The issue in the present ground is with respect to deletion of addition of Rs.2,74,42,000/- under section 68 of the I.T. Act, 1961. We find that before both the authorities the assessee had explained the source of cash deposits in the bank account of Mr. Pawan Goyal, from whom the assessee had received the share application money, to be out of the income surrendered on account of unaccounted sale during the course of search. Before us, the Revenue has not placed any material on record to demonstrate that the income surrendered in the case of share application money has not been accepted by the Revenue. Considering the totality of the facts and circumstances of the case and in absence of any fallacy pointed to in the findings of the Ld. CIT(A), we find no reason to interfere with the order of Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) restricted the disallowance on account of business promotion expenses to 10% i.e., Rs.4,28,878/- and granted relief to the extent of Rs.38,59,909/- and disallowed Diwali expenses to the extent of Rs.30,53,758/- and allowed the Diwali expenses to the extent of Rs.26,09,082/-. 20. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 21. Before us, the Ld. D.R. supported the order of the A.O. 22. On the other hand, the Learned Authorised Representative for the assessee reiterated the submissions made before the authorities below and further submitted that no evidence has been placed on record by the Revenue to demonstrate that the purchase of gold was for personal purpose and that the donated amounts was for purposes other than business purposes and the aforesaid conclusion of the A.O. is without any evidence on record. He, thus, supported the order of the Ld. CIT(A). 23. We have heard the Learned Representative of both the parties and perused the material available on record. We find that the Ld. CIT(A) after considering the detailed submissions made by the assessee before him has given a finding that there is no doubt about the g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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