TMI Blog2014 (4) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... ts case. The failure to gross up on account of the addition of the notional income and the consequential liability to deduct tax for TDS purposes too could not have been cast upon the assessee - there was no dispute that the funds deployed by the assessee to its subsidiaries or sister concerns was not borrowed funds but its share capital and other surplus that had been generated in the course of the business – the funding by the parent or holding company to the sister concern or subsidiary to advance its business objective would fall within the framework of legitimate expenditure - the order of the Tribunal is upheld - thus, no substantial question of law arises for consideration - Decided against Revenue. - ITA 400/2013 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed in his books towards his expenses. Consequently, grossing up of liability on account of TDS was also added by the AO. The third head on which the AO added amount was the sum of Rs.28,28,000/- said to be the loss of interest income due to the advance given to the assessee s sister concern. The Commissioner of Appeals partly allowed the assessee s appeal so far as the first head was concerned and entirely allowed the additions on account of TDS. However, as regards the other aspects, the findings of the AO were confirmed and the appeal was rejected. On the third issue, concerning the addition of interest income as well, the assessee s arguments prevailed with the Commissioner. Both the parties appealed to the ITAT. The assessee s app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e s contentions or even a statement under Section 132 (4) or any reply to the questionnaire which was circulated in this case, the conclusions drawn would have found support in law. In the absence of these, this Court is of the opinion that the findings of the AO - and that of the CIT to the extent that they confirm them - were conjectural and not based on any material. In these circumstances, the presumptions which the Revenue falls back upon under Section 292C do not support its case in the present circumstances. For the same reason, the failure to gross up on account of the addition of the notional income and the consequential liability to deduct tax for TDS purposes too could not have been cast upon the assessee. We, therefore, confi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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