Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 446 - AT - Income TaxAddition on account of non recognition of interest income on the funds deployed in optionally convertible debenture - Income Recognition - CIT(A) deleted the addition - Held that:- Acts on record show that M/s. Ordyn Technologies Pvt. ltd., went into heavy financial crisis by which it was not in a position to pay the principle amount of debentures least to talk about interest on the said debentures. The assessee purchased the OCDs heavily banking upon the future prospects of M/s. Ordyn Technologies Pvt. ltd. However, it turn out to be that all the Government orders successfully bided by M/s. Ordyn Technologies Pvt. ltd. have been cancelled and the said company ran into deep financial crisis . There is no evidence on record brought by the AO to suggest that the assessee has actually received any interest from M/s. Ordyn Technologies Pvt. ltd. There is also no evidence on record which could suggest that there is any possibility of getting interest on debentures from the said company. Assuming for a moment that the assessee has purchased debentures cum interest and therefore the assessee must account for the interest, but at the same time there being no possibility of receiving interest, the same is allowable as a write off in the books. Therefore, we do not find any logic in making the addition of interest accrued and then allowing the same as a deduction as a bad debt. Considering the facts of the case from all possible angle, we do not find any reason to interfere with the findings of the Ld. CIT(A). To this extent, findings of the Ld. CIT(A) are confirmed. However, we do not find any findings given by the Ld. CIT(A) in respect of money lended to Shri Satish Lade, there is not even a whisper of any finding by the Ld. CIT(A) in respect of interest income added by the AO in respect of the loan given to Shri Satish Lade. We, therefore only to this limited extent, restore the issue to the file of the Ld. CIT(A). The CIT(A) is directed to decide the taxability or other wise of the interest on loan given to Shri Satish Lade after giving reasonable and fair opportunity of being heard to the assessee. - Decided partly in favour of revenue for statistical purpose.
|