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2012 (10) TMI 123 - AT - Income TaxAddition on account of interest expenses – Assessee is a partnership firm – As per AO amount in partners’ capital account were advanced by firm and was paid out of borrowed fund – AO treat it as it was not related to the business activity – Held that:- Firm has suffered loss in the previous years. Therefore outstanding debit balance in the names of the partners was on account of losses suffered by the firm and not because of withdrawal of borrowed funds. The AO had also not shown any nexus between the funds borrowed and the debit balance which in fact is the outcome of losses suffered by the assessee. Therefore, interest cannot be disallowed. Decision in favour of Assessee. Non-deduction of TDS u/s 194A - Assessee had not deducted tax at source in lieu of form No.15G/15H - Form No.15G/15H were not filed by the date with CIT – Held that:- The provisions of sec. 40(a)(ia) are mandatory in nature and where the assessee had not deducted tax at source, the deduction will not be allowable. There is no discretion with the CIT(A) to extend the time of filing of form No. 15G/15H beyond the last date of accounting year. Therefore, it was not right to direct the AO to allow the deduction on the ground that no loss of revenue has occurred and delay in filing was technical in nature. Case remand back to AO. Addition on account of unexplained cash credit u/s 68 - The AO did not consider the evidences filed by the assessee at all in the remand report in respect of additional evidence. Therefore the issue required to be examined by the AO afresh with reference to identity, creditworthiness of the creditors and genuineness of the transaction. Case remand back to the file of AO.
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