Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 692 - AT - Income TaxAddition under section 68 - Ingenuine loans - CIT(A) partly deleted addition on admitting additional evidence - procedural default on the part of the ld.CIT(A) in terms of Rule 46A - Held that:- There is no procedural default on the part of the ld.CIT(A) in terms of Rule 46A and consequently there is no merits in the grounds raised by revenue regarding violation of Rule 46A as AO in the remand report has accepted the additional evidences and has raised no objections, which he was given chance in terms of Letter written by the ld.CIT(A) to the AO. Once the AO has himself admitted the genuineness of loan in respect of all the the creditors, and same has been accepted by the ld. CIT(A) after calling for the rejoinder submissions and on perusal of records, then we do not find any reason to reverse the deletion of addition of loan amounts in respect of 31 creditors, merely on the ground that there is no elaborate discussion in the appellate order. Once the fact has been admitted after detailed inquiry and examination which is evident from the material placed on record, then there need not be any detailed discussion about acceptance of the loan.. Moreover, as submitted by the ld. counsel, these loans have been repaid to the creditors in the subsequent years, which fact, can be very well be verified by the AO. Thus, we do not find any merits in the grounds raised by the revenue and accordingly the same are dismissed.- Decided against revenue. Now coming to the grounds raised by the assessee in respect of three creditors, we find that there is a categorical finding by the AO as well as the ld. CIT(A), that creditworthiness of the said persons have not been proved by the assessee. Even before us, no documentary evidence has been filed to rebut the findings of the ld. CIT(A).- Decided against assessee. Disallowance of interest @ 8% on the addition for the loans - part relief by CIT(A) - Held that:- As said by CIT(A) the interest paid by the assessee was @ 8%. On the other hand, the assessee advanced loan of ₹ 38,53,285/- as per the Balance sheet of the assessee and collected interest of ₹ 1,99,972/- which works out to 5.1%. It is to be mentioned that it did not prove that the amount of ₹ 38.53 lakhs was advanced for business purposes, To be reasonable, the assessee should also have collected 8% interest on ₹ 38,53,285/- which comes to ₹ 3,08,000/-. Secondly, the assessee's without prejudice submission that the issue of charging interest on loan advanced was not the case of the Assessing Officer is misplaced, for the reason when, in the assessment proceedings while charging interest @ 18% on the loans of ₹ 96,30,000/- the issue of charging difference in the interest rate did not arise. The verification of the details during remand proceedings reveals that majority of loans received are in order. Therefore, issue of charging interest and payment of interest comes to the fore. This issue has become relevant and the same has to be adjudicated. Accordingly, I direct the AO to charge interest @8% on ₹ 38,53,285/- on the amounts advanced - the difference of which works out to. ₹ 1,08,028/- (Rs.3,08,000 - 1,99,972) as income of the assessee. The A.O. is further directed to calculate interest @ 8% on ₹ 2,50,000/- which has been confirmed in Ground no.2 above. Thus reasons given by the ld. CIT(A), for giving part relief on this score appears to be factually correct. - Decided against assessee.
|