Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 1287 - ITAT DELHIAddition u/s 40(a)(ia) - assessee contended that during appellate proceedings, assessee failed to get the certificate u/s 201 - HELD THAT:- We are of the considered view that when the assessee has obtained the certificate from M/s. Bajaj Auto Finance Ltd. u/s 201 of the Act after first appellate proceedings, the AO is to allow the same after due verification. So far as interest disallowed in case of Barclays Investment & Loan is concerned, assessee’s contention is that it has closed its operation in India. AO is directed to conduct the proper enquiry from the available sources if certificate issued by Barclays Investment & Loan finds corroboration from some other record and the issue may be decided accordingly after providing an opportunity of being heard to the assessee. Consequently, ground no.1 is determined in favour of the assessee for statistical purposes. Disallowance of interest @ 12% per annum on the advance made as the plant and machinery was not put to use - CIT(A) confirmed the addition - HELD THAT:- We are of the considered view that when expenditure/advances paid in question for purchase of plant and machinery by the assessee during the year under assessment was not for extension of any existing business, the same is allowable u/s 36(1)(iii) of the Act. So, the addition made by the AO and confirmed by the ld. CIT (A) is ordered to be deleted. Consequently, ground no.2 is determined in favour of the assessee. Addition on account of excessive bill discounting charges paid - assessee has failed to bring on record any documentary evidence regarding existence of any such agreement between the parties to substantiate its claim without interest - HELD THAT:- When the facts have come on record that in case of Sandhar Automotives (Dhumspur), the assessee is paying bill discounting charges from 15% to 16% but, at the same time, it is paying bill discounting charges @ 19% to Sandhar Enterprises which is reconcilable and as such, excess interest paid by the assessee to Sandhar Enterprises to the tune of ₹ 1,40,946/- has been rightly disallowed by the ld. CIT(A). So, we find no ground to interfere in the findings returned by the ld. CIT (A). Consequently, ground no.3 is determined against the assessee. Proportionate disallowance of interest - addition made by the AO by calculating the interest @ 12% per annum - HELD THAT:- When assessee is having huge interest free funds at its disposal, the presumption lies in favour of assessee that interest free funds were utilized for giving interest free advances - Following the cases S.A. Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] and Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] we are of the considered view that addition made by the AO and confirmed by the ld.CIT(A) is not sustainable, hence ordered to be deleted. So, ground no.4 is determined in favour of the assessee.
|