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2012 (5) TMI 632 - ITAT DELHIAddition u/s 92CA(i) - Held that:- We find that learned TPO while working out the alleged excess amount of interest paid by the assessee has considered the average LIBOR (London Inter-Bank Offered Rate) between the period of April 2001 to March 2002 plus arithmetic mean of the interest rate paid by the comparables in addition to LIBOR. Learned TPO has committed two errors. He considered the arithmetic mean of LIBOR between April 2001 to March 2002. The assessee entered into an agreement for the loan on 25.12.2000. What was the rate of LIBOR at that particular time has not been considered. Similarly, we concur with the finding of the Learned CIT(Appeals) that the comparables selected by the learned TPO are not comparables with the assessee in terms of their size quantitatively. Learned TPO also not compared the terms and conditions enumerated in the assessee’s agreement for the loan vis-à-vis the terms and conditions of the five comparables. Thus, to some extent, learned TPO has compared the incomparable with the assessee. In view of the above discussion, we do not find any merit in this ground of appeal. It is rejected. Cessation of liability - Held that:- Once it is factually established by the assessee that liability has not ceased, no addition can be made. Learned CIT(Appeals) has considered this aspect and we do not see any reason to interfere in his order. With regard to the two other creditors, we find that the Learned CIT(Appeals) has deleted the addition on the ground that these amounts have been written off by the assessee in the subsequent years and offered for tax. Assessing Officer has made the addition of these amounts in the present years on the ground that assessee failed to file the confirmation from these two entities. The case of the assessee was that a dispute was pending between the assessee and these parties and it was not possible for it to ask for a confirmation. The assessee has not written off these amounts in its books of account. Assessing Officer has not brought any positive evidence on the record indicating the liability to pay these amounts has ceased. On due consideration of the order of the Learned CIT(Appeals), we do not find any merit in the ground of appeal raised by the revenue. Hence, it is rejected. Addition on employees contribution towards EPF - amount paid after the expiry of the due date provided in the EPF Act - Held that:- As the amount was paid before the due date of the filing of the return and the issue is squarely covered in favour of the assessee Disallowance of expenditure - Low GP - Held that:- Since the assessee failed to submit the requisite details at the time of assessment proceedings, therefore, learned Assessing Officer has rightly made ad hoc disallowance out of expenses on the ground that genuineness of such expenses could not be verified. But we agree with the submissions made by the learned counsel for the assessee that out of certain expenses, there cannot be any disallowance. The nature of the expenses is such that no doubt on their quantification can be raised. Now, as far as difference in foreign exchange is concerned, it is to be computed based on straight formula. Similarly, depreciation could also be verified from details available on the record. Considering all these aspects, we set aside this issue to the file of the Assessing Officer for readjudication.
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