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2023 (4) TMI 386 - ITAT KOLKATAAddition of interest on loan - assessee has failed to substantiate the alleged interest expenses as business expenses where the identity, business activities and genuineness of transactions of loan creditor were not established - CIT-A deleted the addition - HELD THAT:- As documents furnished like landline telephone bill, letters served on the assessee from four different prominent banks including a speed post, lends credence to the assertion that lender company existed on the given address, more particularly when the lender company has been assessed by the Department and the assessment order also containing the same address. It is also observed from the assessment order of the lender company that against the nature of business, it is noted as ‘trading in securities and iron ores’ which also demonstrates that assessee and the lender company are in the similar line of trade. ROC master record data also demonstrates the active status of the lender company. On the allegation that assessee did not produce the directors of the lender company, we note that neither Ld. AO nor Ld. CIT(A) made any concerted effort by issuing summons u/s 131 for enforcing the personal attendance of the directors of the lender company. Even in the remand proceedings, AO did not choose to issue summons under section 131 of the Act even though Ld. CIT(A) had given specific instruction in this respect. As per CIT(A) that the alleged advance free loan was nothing but advance to trade creditors which was an essential business requirement in expediency to maintain the level of inventory which the assessee was maintaining. He observed that loan taken by the assessee was essential for the business of the assessee and the corresponding interest expense was for business expediency, hence allowable expenditure. There is no material on record adduced by the Revenue which could rebut the documents produced by the assessee. The finding of fact arrived at, based on documentary evidence on record cannot be said to be perverse. Nothing has been pointed out that any of the findings arrived at by the CIT(A) is on the basis of misleading of evidence or failure to examine any material documents while coming to such conclusions. Decided against revenue.
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