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2020 (11) TMI 259 - AT - Income TaxAddition of interest & finance expenses u/s 36(1)(iii) - loan advanced and availed of by the assessee company to and from its sister concern - as submitted assessee company has taken the loan from the sister concern at the low rate of 12.60% and 13.50% whereas charged the interest on the loan given to the sister concern @ 14% - HELD THAT:- Case of the assessee company has not been examined in entirety. Though ld.CIT (A) has admitted the additional evidence but the same has also not been discussed as to how the same is of no support to the assessee company. Both AO as well as ld. CIT (A) have made ad hoc disallowance on the reason that the bank statement has not been furnished by the assessee company to prove the utilization of the loan on which interest has been paid for the purpose of its business. Even it is difficult to make out the nature of the additional evidence, presumably entertained by CIT (A) for the reason that it is necessary for deciding the issue, from the impugned order. Entire findings returned by CIT (A) confirming the addition are bereft of plausible reasoning. To enhance the cause of justice, the issue is required to be factually examined in entirety by the AO by examining audited financials of the assessee company and keeping in view the fact that this is a case of loan advanced and availed of by the assessee company to and from its sister concern and during the year under assessment, its turnover has gone up to ₹ 23.41 crores from ₹ 9.92 crores. AO shall provide opportunity of being heard to the assessee company to prove utilization of the loan in question from its evidence as well as from the bank statements. Appeal filed by the assessee is allowed for statistical purposes.
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