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2021 (3) TMI 1095 - AT - Income TaxDisallowance of interest paid to M/s GNIDA - AO disallowed the penal interest paid by the assessee on account of default in payment of installments to GNOIDA because Interest was not allowable as it was not on borrowed fund, As per the agreement there was no requirement to pay interest and No interest payment was allowable on acquiring a capital asset i.e. the lease rights of the land - CIT-A deleted the addition only on the ground that since the interest payment is not for violation of law or for the commission of an act purpose of which is an offence as contemplated in explanation 1 of Section 37(1) - HELD THAT:- CIT (A) has not adjudicated on the ground nos. 9 to 12 in the appeal filed before him for which the revenue filed appeal before us. The main contention of the revenue is that the addition needs to be examined broadly in the light of allowability of the interest in acquiring the lease rights on the land but not narrowly on the issue, whether such interest is penal in nature or not. Since, the ld. CIT (A) has not adjudicated on the core of the issue, we hold that the interest of justice would be well served by remanding the matter to the file of the ld. CIT (A) to adjudicate on the grounds unadjudicated. Appeal of the revenue allowed for statistical purpose.
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