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2021 (7) TMI 826 - AT - Income TaxDisallowance u/s 36(1)(iii) - interest had been charged on the funds given out and that as to why the interest on funds diverted for non business purpose should not be disallowed - HELD THAT:- In the present case, the contention of Assessee that the assessee company was having sufficient interest free funds available with it which would be said to have been used in making interest free advances to M/s GDPL requires verification at the level of the A.O. therefore this issue is set aside to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunities of being heard to the assessee. Addition of interest - assessee had taken term loan for purchase of machinery, he asked the assessee to explain as to why the interest pertaining to loan taken for purchase of machinery should not be disallowed and capitalized to be included as cost of machinery, as and when the same was purchased and put to use - HELD THAT:- Similar issue was a subject matter of the assessee’s appeal [2019 (4) TMI 1990 - ITAT CHANDIGARH] the matter is required to be restored to the file of the Assessing officer to duly consider the aforesaid contention of the assessee, examine the details of the finances available with the assessee vis-a-vis amount capitalized by the assessee and decide the issue afresh in the light of the decision in the case of ‘CIT (LTU) Vs. Reliance Industries Ltd.’ [2019 (1) TMI 757 - SUPREME COURT] - The orders of the lower authorities are set aside and the matter is remanded to the Assessing officer to decide the issue afresh as per the observations made above. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Addition invoking the provisions of Section 41(1) - sundry creditors were outstanding for more than three years, so it was liable to be taxed under section 41(1) of the Act as cessation of liability - HELD THAT:- In the present case it appears that the facts that payments were made in certain cases after passing of the assessment order and few were written back as per the practice of the assessee company were not brought to the knowledge of the A.O. and the Ld. CIT(A) is also silent on those facts. We therefore deem it appropriate to set aside this issue back to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunities of being heard to the assessee. Appeal of the Assessee is allowed for statistical purposes.
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