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2023 (6) TMI 436 - AT - Income TaxAddition of opening balances of the trade creditors - AO made the two additions by treating the opening balances as unexplained - made partial additions in the preceding year and the remaining amounts in the current year towards the closing balance of the last year - HELD THAT:- Once there is a difference in the account in the opening balance and there is no further transaction for the year, then no addition can be made on that score. If the AO was not satisfied with the correctness of the balances appearing in the last year, then he ought to have made addition for the full difference in the preceding year. Having not made full addition due to non-reconciliation of the balances in the preceding year, and there being no fresh transactions, AO cannot be allowed to make addition in the current year towards opening balances. Therefore, order to delete the addition. Disallowance u/s.14A r.w.r. 8D - addition made towards interest expenses - HELD THAT:- When the capital and interest free unsecured loan with the assessee far exceeded the interest free loan advanced to the sister concern, disallowance of part of interest out of total interest paid by the assessee to the bank was not justified. More recently, in CIT(LTU) VS. Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] has reiterated the same view. When we examine the amount of Investments at Rs. 67.95 lakh lakh as against the availability of Share Capital and Reserves at Rs. 1.64 crore, it becomes evident that the amount of such Investments is less than the amount of the assessee’s capital. We, therefore, order to delete the disallowance of Rs. 92,108/-.
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