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TMI Blog2022 (10) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of Rs.98,53,078. 5. In course of assessment proceedings, the assessing officer, after examining the details available on record, noticed that assessee had claimed deduction on account of payment of interest to bank, partners and others, whereas, assessee had given interest free advances/loan to various persons amounting to Rs.35,02,720. Therefore, he called upon the assessee to explain why a part of his interest expenditure should not be disallowed as the borrowed funds were advanced for nonbusiness purposes. Though, the assessee made his submission against the proposed disallowance, however, being dissatisfied with the submission of assessee, the assessing officer computed interest @ 12% on the alleged interest free advances of Rs.35,02,720 and disallowed an amount of Rs.4,20,326, being proportionate interest chargeable on the interest free advances. Assessee contested the aforesaid disallowance before learned Commissioner (Appeals). 6. Before the first appellate authority, assessee could furnish the details of the so called advances to different persons and explain that they are not in the nature of interest free advances/loans. The evidences furnished and submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the audited financial statement of the assessee, the assessing officer found that a total credit balance of Rs.19,67,12,224 has been shown in the balance sheet. After calling for and examining the necessary details, the assessing officer observed that assessee could furnish details and confirmation in respect of sundry creditors of Rs.1,19,48,831. Further, he observed, sundry creditors of Rs.3,95,30,742 related to the preceding year i.e. assessment year 2010-11. Thus, treating the balance sundry creditors of Rs.14,52,33,651 as unexplained cash credit under Section 68 of the Act, he added back to the income of the assessee. Assessee challenged the aforesaid addition before learned Commissioner (Appeals). 14. Before first appellate authority, assessee furnished various details to explain the genuineness of sundry creditors. The evidences furnished by the assessee were forwarded to the assessing officer for examination and necessary reports. 15. After considering the factual position as well as the submission made by the assessee and the report of the assessing officer, learned Commissioner (Appeals) was convinced that the sundry creditors appearing in the books of account of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the deduction claimed. Assessee contested the disallowance before learned Commissioner (Appeals). 22. After considering the submission of the assessee in the context of facts and material on record, learned Commissioner (Appeals) held that considering the nature of expenditure, it may not be possible for the assessee to fully substantiate its claim through supporting evidence. Therefore, he restricted the disallowance to 10% of the amount claimed as deduction. 23. We have considered rival submissions and perused material on record. 24. Undisputedly, the assessee is a sports goods manufacturer to promote its products, the assessee has to supply free samples to both senior and junior level players, coaches etc. on personal contact basis. Therefore, it may not be always possible for the assessee to keep supporting evidence, considering the fact that at times, assessee is providing free samples to national/international level players of repute and considered as celebrity. Therefore, it may not be always possible to obtain receipt from such players qua the free samples. Therefore, assessee's claim that the expenditure cannot be fully substantiated through supporting evidence, to so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the assessing officer, in course of remand has not found anything adverse in the evidences furnished by the assessee. Thus, once the discrepancy pointed out by the assessing officer stands reconciled, no addition can be made on account of unsecured loan. Accordingly, we uphold the decision of the learned Commissioner (Appeals) by dismissing the ground raised. 30. In ground no. 5, Revenue has challenged deletion of addition of Rs.7,68,305 representing disallowance made under Section 40(a)(ia) of the Act. In course of assessment proceedings, the assessing officer noticed that the assessee has paid commission of Rs.24,69,362 to various parties without deducting tax at source. Accordingly, he disallowed the amount under Section 40(a)(ia) of the Act. 31. Assessee contested the aforesaid disallowance before learned Commissioner (Appeals). 32. Being convinced with the submission of the assessee, learned Commissioner (Appeals) deleted the disallowance. 33. We have considered rival submissions and perused material on record. 34. On perusal of remand report of the assessing officer furnished in course of first appellate proceedings, it is observed that the amount of Rs.24,69,362 co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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