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2015 (11) TMI 1442 - AT - Income TaxAddition on interest paid on unsecured loans - CIT(A) deleted the addition - Held that:- CIT(A) had considered the letters issued by the creditors demanding interest and threatening withdrawal of money for coming to a conclusion that the interest payment was a genuine allowable, business expenditure. There is no dispute that 50% of the total interest outgo pertained to preceding year. Assessee has also not disputed the claim of the revenue that there was no contract with the creditors for payment of any interest. However, as per the assessee it had taken a decision during the relevant previous year, in the meeting of its Board of Directors held on 23-03-2010 to pay interest from 01-04-2008 at the rate of 7%. Assessment order states that assessee could not produce any evidence regarding any dispute that share holders/directors on the question of interest. No doubt, assessee is relying on a resolution of its Board of Directors for payment of interest. Nevertheless, we are of the opinion, that at least some of the records produced by the assessee before the CIT(A) were not before the AO. Just because AO was present at the time of proceedings before the CIT(A), we cannot say that requirements of Rule 46A of IT Rules stood satisfied. We are of the opinion that the issue therefore, requires a fresh look by the AO for verifying the allowability of the claim in accordance with law. We therefore, set aside the orders of the authorities below with regard to the allowance of interest back to the file of the AO for consideration afresh in accordance with law. - Decided in favour of revenue for statistical purposes. Disallowance of prior period expenditure - CIT(A) deleted the addition - Held that:- Grievance of the revenue is that the evidence produced by the assesssee before the CIT(A) were not before the AO. In our opinion, the question whether there was any dispute with regard to cam charges between the assessee and M/s Bharath Mall and such dispute, if it existed, whether settled, require a detailed analysis before coming to a conclusion regarding the allowability of the claim made by the assessee. Unless and until such an exercise is carried out, it cannot be ascertained whether the claim is one of prior period expenditure or business expenditure incurred during the relevant previous year. In such circumstances, we are of the opinion that this issue also requires a fresh look by the AO. We therefore, set aside the orders of the authorities below and remit the issue regarding allowance of prior period expenditure also back to the file of the AO for consideration afresh in accordance with law. - Decided in favour of revenue for statistical purposes.
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