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2019 (2) TMI 1909 - AT - Income TaxAddition u/s 40(a)(ia) - clearing and forwarding expenses in connection with imports - no TDS was deducted on reimbursement of the expenses - AO took the view that assessee could not pick and choose the nature of expenses on which TDS was required to be deducted - HELD THAT:- Before us the ld AR for the assessee has made two fold submissions that (i) the expenses was paid on account of reimbursement, therefore, no TDS was require to be made and (ii) that the receipt has included the said payment in its return and has paid the tax on such income. Therefore, Considering the second contention of the assessee in view of the decision of Tribunal in Ranjana Roy versus ITO . [2015 (12) TMI 1846 - ITAT KOLKATA], in ITO Vs Opera Global Pvt Ltd. [2012 (6) TMI 704 - ITAT, NEW DELHI] and in Bridgegopal Madhusudhan Bhattad [2015 (6) TMI 1045 - ITAT NAGPUR]that when the recipient has paid tax on the income no disallowance can be made in the hand of payer. Hence, this issue is restored to the file of assessing officer to verify the facts if the recipient has included that payment in its income and paid the tax and pass the order in accordance with law. Needless to order that before passing the order the assessing officer shall grant opportunity of hearing to the assessee and to furnish necessary evidences. In the result this ground of appeal is allowed for statistical purpose. Disallowance of interest expenses - assessee submits that assessee debited interest and financial charges towards the interest paid to Bank and on unsecured loans - HELD THAT:- Assessee has shown his own funds of ₹ 5.68 crore, this fact has been duly recorded and accepted by learned Commissioner (Appeals) - The assessee has made a booking of office premises with Lotus Grhinirman Private Ltd. We have noted that the fund advanced by assessee is of ₹ 45 lacks on account of booking of office premises. The assessee has sufficient interest free funds in the form of reserve and surplus and share capital of ₹ 5.68 Crore. Therefore, keeping in view, the ratio of the decision of Hon’ble Bombay High Court in CIT Vs Reliance Utility and Powers Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT], no interest disallowance is warranted, when the interest free funds available with the assessee is far more than the investment made by the assessee. Therefore respectfully following the decision of Hon’ble Bombay High Court, we direct the assessing officer to delete the disallowance - In the result, ground no.2 is allowed. Disallowance sundry balance written off - AO disallowed the entire claim holding that the assessee has not furnished detailed for justifying the decision of write off, the Assessing Officer also noted that certain write off were pertaining to Cenvat Duty, Education Cess etc. - HELD THAT:- As decided in M/S. NCS DISTILLERIES P. LTD., HYDERABAD [2014 (9) TMI 1160 - ITAT HYDERABAD] write off of Cenvat credit by the assessee in its books of account is thus allowable as business expenditure under the provisions of section 37(1) of the Act relatable to the year, in which the manufacturing activities are closed down by the assessee. The claim of the assessee is that they have closed down the business pertaining to the aluminum business and the excess credit of Cenvat was not utilized pertaining to that business. Therefore, we direct the Assessing Officer to verify the fact about the availability of Cenvat Credit to the assessee at the end of relevant Financial Year and allow write off of Cenvat credit. Sundry balance written off - Assessee has given advances for purchasing various materials like steam coal, LAM Coke and other store consumable - The Hon’ble Apex Court in T.R.F. Ltd. vs. CIT [2010 (2) TMI 211 - SUPREME COURT]held after 1st April 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. Considering the law laid down by Hon’ble Apex Court, the sundry balances which has been written off by the assessee in its books of account is sufficient to claim the bad debt. In the result, this part of ground of appeal is allowed in favour of assessee.
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