2020 (5) TMI 251 - AT - Income Tax

Addition u/s 69C - unexplained expenditure - unaccounted interest paid by the assessee - assessee submitted that the issue under consideration relates to the addition u/s 194A r.w.s. 40(a)(ia) - HELD THAT - There is requirement of reading the loan agreement between the assessee and M/s Religare Finvest Ltd. EMI particulars actual interest payable by the assessee to M/s Religare Finvest Ltd. the application of TDS provisions of the Act to the interest payment etc. AO should go by the documentation and the liability of the assessee in matters of interest payments and not by the TDS figures available on the TDS certificate or Form No.26AS of M/s Religare Finvest Ltd. AO is directed to apply the TDS provisions of the Act strictly and re-do the assessment on this addition. In any case the CIT(A) also given certain directions that he should be considered strictly in tune with the provisions of the Act. With these directions this issue is remanded to the file of the Assessing Officer. The Assessing Officer shall grant reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice. Thus the grounds raised by the assessee are allowed for statistical purposes.

Summary

Issues: Condonation of Delay, Addition of Unaccounted Interest

Condonation of Delay:
The appeal was filed with a delay of 59 days, and the assessee submitted an affidavit explaining the reasons for the delay. The reasons included the appellant's oversight due to travel and subsequent forgetfulness. The tribunal found the reasons sufficient to condone the delay and proceeded to adjudicate the appeal.

Addition of Unaccounted Interest:
The core issue revolved around the addition of Rs. 8,18,695 under section 69C. The Assessing Officer disallowed 30% of the interest payments made by the assessee to a financial institution due to discrepancies in TDS particulars. During the first appellate proceedings, the CIT(A) restricted the addition to Rs. 8,18,695 after considering the Form No.26AS provided by the payee, which showed a different payment amount than the one recorded by the assessee. The tribunal, upon hearing arguments from both sides, directed the Assessing Officer to re-examine the issue based on the loan agreement, EMI particulars, actual interest payable, and TDS provisions. The tribunal emphasized the importance of considering the documentation and the assessee's liability in interest payments, rather than relying solely on TDS figures. The issue was remanded to the Assessing Officer for reassessment, with directions to grant the assessee a fair opportunity to present their case.

In conclusion, the appeal was allowed for statistical purposes, and the decision was pronounced on December 16, 2019.