Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 373 - AT - Income TaxDisallowing interest u/s. 36(1)(iii) - assessee has failed to prove that the interest of OD charges for the purpose of business - AO was of the view that OD account was also used for advancing to family members and also for making investment in subsidiary companies - CIT-A deleted the addition - HELD THAT:- That no disallowance has been made in the earlier years on this account. This submission has been accepted by the ld. CIT(A) - no infirmity in the decision by the ld. CIT(A). It is settled law that unless, there is change in law or facts and circumstances of the case, contrary view cannot be taken on the issue that has attained finality in earlier assessment years and the fundamental aspect permeates in different years. It is duly supported by the decision of Hon'ble Supreme court in the case of Radha Swami Sastry [1991 (11) TMI 2 - SUPREME COURT] AO is drawing adverse inference that assessee has not submitted the utilization of the overdraft in the earlier years. We note that this is not the case, where AO has any power to reopen the case of earlier years or that the AO has stepped into the shoes of ld. CIT and is exercising jurisdiction u/s 263 and that also for earlier year. No cogent rebuttal has been given on behalf of the revenue against the finding given by ld. CIT. In this view of the matter ld. CIT(A) has taken the correct view of the mater. We do not find any infirmity in the same and accordingly we uphold the same. Disallowance u/s. 37(1) - assessee has failed to prove that the penal charges paid for business expenditure - CIT-A deleted the addition - HELD THAT:- The facts recorded by ld. CIT(A) are that this was paid by the assessee in terms of the commercial agreement to another party, where assessee was obliged to remit the toll collection within a particular period and in case of default amount was to be paid for the default styled as penal charges. In substance, the penalty charges are interest charges payable, when there is delay in remitting the toll collection to the other party as per the contract. It is settled law that it is the substance that counts and not the form given to in the accounts of the party. The cases referred by the AO are in connection with payments under the penal provisions contained in a statutory provision. It is not at all the case here that the amount paid in the present case is due to any infringement of law. In this view of the matter, the decision of ld. CIT(A) is correct. Disallowing interest u/s. 24(b) - assessee has failed to prove the genuineness of interest on borrowed capitals - as per AO bank statement furnished by the assessee is not clear whether the loan was for acquisition of the said flat and how the total interest component was arrived at - CIT-A deleted the addition - HELD THAT:- CIT(A) has given the finding that assessee has duly submitted the statement of the bank, copies of possession certificates and ledger copy of housing loan. These evidences were found by the ld. CIT(A) to be justifying that the loan was utilized for the housing purposes. Ld. CIT(A) has also noted that it is also not the case of the AO that loan utilized have been utilized for any other purpose. In the paper book submitted before us statement of bank account has been attached which confirmed the view taken by the ld. CIT(A). The ld. DR could not rebut the aforesaid finding. In this view of the matter, we do not find any infirmity in the order of ld. CIT(A). Accordingly, we uphold the same. Revenue appeal dismissed.
|