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2017 (5) TMI 1095 - AT - Income TaxLoans to Director out of interest bearing funds raised by the assessee - admission of additional evidence - Held that:- Before learned CIT(A) the assessee made submissions that interest is paid on term loans which were raised in financial year 2007-08 for purchase of premises and equipments and it is not possible to grant loans to Director during the relevant previous year out of interest bearing funds raised by the assessee as the interest bearing funds raised by the assessee stood utilized during the financial year 2007-08 itself. It was also submitted by the assessee before learned CIT(A) that interest bearing working capital loan raised by the assessee from bank were utilized for business of the assessee which could be verified from the Balance Sheet of the assessee. CIT(A) instead of adjudicating the said contentions raised by the assessee rejected the contentions of the assessee on threshold on the grounds that such arguments were not raised by the assessee before the AO. The learned CIT(A) committed an error in not considering the said contentions of the assessee on merits. The learned CIT(A) powers are co-terminus with powers of the AO . The learned CIT(A) should have forwarded the additional evidences to learned AO for seeking remand report as mandated u/r 46A of 1962 Rules for necessary examination, enquiry and verification by the AO of these additional evidences. Thus, we are inclined to set aside and restore this issue to the file of the AO for de-novo determination of the issue on merits in accordance with law.
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