9911796707
TMI Blog2023 (3) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is having substantial interest free funds at its disposal amounting to ₹ 9 crores as against an advance of 19.7 lakhs approximately advanced to sister concerns, we are of the view that addition on this count cannot be sustained. Disallowance u/s 40(a)(ia) - assessee claimed rent expenses and the AO discovered that the assessee had not deducted TDS on rent - HELD THAT:- We observe that the assessee had filed a detailed chart giving details of rent before the assessing Officer vide submission dated 07-10-2014, however, evidently the same was not taken cognizance by the Revenue Authorities. Before us, assessee submitted that the assessee has correctly deducted TDS on rent as per law. TDS was not deducted only in cases where either the payment of rent was below the threshold limit or the recipient of rental income had furnished a lower tax withholding the certificate furnishing the rate at which taxes were to be deducted by the assessee. Accordingly, evidently the detailed chart filed by the assessee regarding TDS on rent payments, furnished during the course of assessment proceedings was not properly examined by the AO, we are hereby restoring the matter to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest u/s. 234A, 2348 and 234C is unwarranted, unjustified and bad in law. 6. The learned Commissioner of Income Tax, (Appeals)-11, Ahmedabad has erred in dismissing the appeal and whereby upholding the initiating penalty u/s. 271(1)(c) of the IT Act, 1961 is unwarranted, unjustified and bad in law. Your applicant reserves the right in addition or alteration in the grounds of appeal at the time of hearing. Ground number 1: disallowance of interest expense of ₹ 2,36 855/- 3. The brief facts relating to this ground of appeal are that assessee had given interest free advances of ₹ 19,73,788/- to certain parties and as per the AO, the assessee on one hand had paid interest on borrowed funds, whereas on the other hand, the assessee had given interest free loans to its sister concerns and promoters. Accordingly, the AO disallowed proportionate interest amounting to ₹ 2,36, 855/-. 4. The assessee filed appeal before Ld. CIT(Appeals) wherein it was contended that the loans were given prior to the year 1996-97 and also enclosed copy of assessment order for assessment year 1999-2000. However, CIT(Appeals) dismissed the appeal of the assessee with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had substantial interest free funds to the tune of ₹ 9 crores as own funds at its disposal. Further, the assessee submitted before us copy of the ledger account of the parties to whom the aforesaid advances were made and it is evident that the said advances were made in the earlier assessment years. In the case of CIT v. Reliance Industries Ltd. 410 ITR 466 (SC) , the Hon'ble Supreme Court held that where Assessing Officer rejected assessee's claim under section 36(1)(iii) taking a view that interest would not have been payable to banks if funds were not provided to subsidiaries, in view of fact that interest free funds were available to assessee which were sufficient to meet its investment in subsidiaries, appellate authorities were justified in allowing assessee's claim for deduction. Accordingly, keeping in view the instant facts, since the assessee is having substantial interest free funds at its disposal amounting to ₹ 9 crores as against an advance of 19.7 lakhs approximately advanced to sister concerns, we are of the view that addition on this count cannot be sustained. 7. In the result, ground number 1 of the assessee s appeal is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as Ld. CIT(Appeals) failed to appreciate the same. According to assessee, the AO has clearly made contradictory statements that assessee failed to file details, wherein apparently all details were filed by the assessee during the course of assessment proceedings. In response, DR relied upon the observations made by the AO and Ld. CIT(Appeals) in their respective orders and submitted that evidently as per the remand report of the AO furnished during the course of appellate proceedings before Ld. CIT(Appeals), no details were furnished by the assessee. 10. We have heard the rival contentions and perused the material on record. We observe that the assessee had filed a detailed chart giving details of rent before the assessing Officer vide submission dated 07-10-2014, however, evidently the same was not taken cognizance by the Revenue Authorities. Before us, the counsel for the assessee submitted that the assessee has correctly deducted TDS on rent as per law. The TDS was not deducted only in cases where either the payment of rent was below the threshold limit or the recipient of rental income had furnished a lower tax withholding the certificate furnishing the rate at whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
