TMI Blog2013 (11) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration at the level of AO as the same had not been examined either by AO or by CIT(A) – The issue was restored for fresh consideration. Addition u/s 68 – Loan taken - Held that:- Necessary details and evidence in support of the transactions had been filed before CIT(A) which had also been sent to the AO for verification and report - The assessee has filed confirmation from the party along with PAN No. of the party which have been placed on record - The assessee has also filed copy of ledger account in the books of the assessee as well as copy of the assessee's account in the books of the other party - Copy of the bank account in which these transactions were recorded had also been filed along with reconciliation statement - The loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sister concerns. The AO however noted that the assessee had not paid any interest to any other parties other than sister concerns and, therefore, the expenditure incurred on account of interest was excessive compared to market value and accordingly he disallowed the claim of interest u/s 40A(2)(b) of the IT Act. 2.2. In appeal, the assessee submitted before CIT(A) that the concerns were regular suppliers of the company and more than 50% of manufacturing cost was supplied by them. The interest had been paid for late payment for purchases and processing charges. The interest paid by assessee had been declared as income by the sister concerns which were regularly assessed to tax. It was also submitted that the AO had not made out any case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment made have been inbuilt into the price charged by the sister concerns but we see no material to support the finding of CIT(A) that prices charged by the sister concerns were favourable to the assessee compared to other parties. The order of CIT(A) giving relief cannot be upheld. In our view this aspect requires fresh consideration at the level of AO as the same had not been examined either by AO or by CIT(A). We, therefore, set aside the order of CIT(A) and restore the matter to the file of AO for passing a fresh order after necessary and detailed examination and after allowing opportunity of hearing to the assessee. 3. The second dispute is regarding addition made of Rs. 90,20,019/- u/s 68 of the IT Act. The AO noted that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lender. The transactions have been recorded both by the assessee and the lender in the books of accounts. The assessee had also furnished the bank statement showing the receipt of loan taken and payment of monthly installments. The AO was, therefore, not correct in stating that the loan had not been taken. 3.2 CIT(A) on consideration of reply of the assessee observed that the assessee had filed confirmation regarding the loans taken and also filed the hire purchase agreement and confirmation with PAN No. The assessee had, therefore, discharged the initial burden of proving the transactions. The documents placed on record clearly showed that the assessee had obtained finance against the existing assets. Therefore, the AO was not correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling necessary details and evidence. The addition made was, therefore, not justified. The learned DR on the other hand placed reliance on the orders of assessing officer. 3.4 We have perused the records and considered the matter carefully. The dispute is regarding addition of Rs. 80,20,019/- on account of loan taken from Better Value Leasing Finance Co. Ltd. u/s 68 of the IT Act. The AO had made the addition on the ground that the assessee had not filed confirmation. However necessary details and evidence in support of the transactions had been filed before CIT(A) which had also been sent to the AO for verification and report. The assessee has filed confirmation from the party along with PAN No. of the party which have been placed on re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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