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TMI Blog2023 (10) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of penalty/expenses for any purpose being an offence or which is prohibited by law, not allowed in terms of Explanation to section 37(1) - that we completely agree with assessee that narration of these expenses, as noted by the AO/CIT(A) does not reveal any such nature of the expenses as far as interest on margin trading facility or TDS is concerned. And as for the late payment and penal charges also, the nomenclature mentioning late payment also, there was no basis to arrive at a conclusion that all referred to penalty paid by the assessee, that too infringement of any law. The books of accounts admittedly were all produced before the AO, and the ledger account of these expenses also did not reveal any such fact so as to arrive at a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O and confirmed by NFAC is bad in law and required to be quashed. ii) Ld. NFAC erred in law and on facts in confirming addition of Rs. 159058/-on account of interest and late fees of IDS. iii) Ld. NFAC erred in law and on facts in confirming late payment and penalty charges of Rs. 3092199/-. iv) Ld. NFAC erred in law and on facts in confirming addition of Rs. 1571902/-on account of interest on margin trading facility. v) Ld.NFAC ought to have adjudicated the appeal on merits rather than dismissing it in limine. 3. As transpires from the grounds raised before us, the assessee is aggrieved by order of the ld.CIT(A) in confirming disallowance made by the AO of the following expenses: i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts was also filed before us explaining the same. He therefore contended that in the light of all the records, the evidences/documents before the AO, there was no reason or the AO to reject the contentions of the assessee that these expenses were incurred wholly and exclusively for the purpose of business of the assessee. He contended that neither narration of the expenses nor copy of the ledger account of these expenses revealed any fact leading to the conclusion or finding that these expenses were pertained to penalty for infringement of any law which is not allowed in terms of provisions of section 37(1) of the Act. He therefore pleaded that the disallowance made be deleted. The ld.DR however supported order of the ld.CIT(A) stating th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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