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2012 (5) TMI 231 - AT - Income TaxDisallowances/additions on account of interest - AO observed debit interest entry against the business income and Royalty income - unsecured loan and interest paid thereon – Held that:- as per the clauses of the Addendum agreement with the company and in order to fulfillment of the condition, the assessee through its partners has deposited Rs.2 crores after taking unsecured loans from the various parties and in lieu thereof the assessee has received the interest free deposits of Rs.1.50 crores and Royalty - the amount advanced to the company by the assessee firm through its partners is a measure of commercial expediency and the AO has erred in holding that the investment cannot be said for business consideration. Payment of interest without deducting TDS – disallowance u/s 40(a)(ia) - Held that:- the assessee has submitted Form No.15H in respect of two parties for not deducting TDS no default on the part of the assessee. Disallowance of unexplained cash credit – assessee not filed the copy of bank statements and copy of returns of loan creditors to prove the genuineness and creditworthiness of the creditors - summons u/s 131 issued - 11 summons returned back by the postal authority as un-served and 23 loan creditors have not filed any submission in response to summons issued to them - assessee during hearing submits that these loans are 'Hundi' loans taken through the brokers by cheques with TDS on interest – Held that:- In the absence of any material to show that apart from issuing notice u/s 133(1) as to how the AO pursued the matter further with the said parties and keeping in view that the assessee is ready to file confirmation letter along with the PAN, we are of the view that in the interests of justice, the matter should go back to the file of the AO.
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