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2015 (10) TMI 581 - ITAT MUMBAI

2015 (10) TMI 581 - ITAT MUMBAI - TMI - Addition on account of discount charges made by A.O. - CIT(A) deleted the addition - Held that:- The issue of discounting charges have been extensively deliberated upon by the Tribunal in the group cases and it had dismissed the appeals filed by the AO.s for the AY.1997-98 stating Assessing Officer simply repeated the assessment and first appellate authority's order without discussing anything new about the matter on which the Tribunal gave direction.He si .....

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r year,details of discount charges paid,statement of account, parties in support of receipt payment of discounting charges, copies of account of parties tracing the original funds, user of funds and repayment of charges with discounting charges etc.

Another letter was filed before the Assessing Officer on 24.11.2006 producing complete books of account, details of finance charges paid with bifurcation of parties and rate of interest and a copy of assessment order passed by the A.O. fo .....

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the learned CIT(A), the discussion on which has been made in par as 1.10 to 1.14 of the impugned order. On the appreciation of the entire material /evidence placed by the assessee before the A.O. in the fresh round of proceedings,the learned CIT(A) has recorded a categorical finding that these expenses were incurred during the course of business. Apart from relying on the assessment order, the learned Departmental Representative could not controvert the findings given by the learned CIT(A)in sup .....

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es of the case and in law, the Learned CIT(A) has erred in deleting the addition of ₹ 1,32,08,738/-on account of discount charges made by A.O. 2.On the facts and in the circumstances of the case and in law, the learned CIT(A) failed to appreciate that the assessee firm had not been able to prove that the discounting charges have been paid wholly and exclusively for the purpose of the business of the assessee. 3.On the facts and in the circumstances of the case and in law, the learned CIT(A .....

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investment in shares,filed its return of income on 02.11.1998,declaring total income of Rs. (-)1,33,47,190/-.The AO completed the assessment u/s.143(3) of the Act on 18.01.2001,determining the income of the assessee at Rs. (-)58,538/-.The AO disallowed assessee s claim of interest expense of ₹ 1.32 Crores.Matter travelled up to the Tribunal and vide its order dated 26.06.2007,Tribunal restored back the matter to the file of the AO with following direction: "If the position is that th .....

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resh in the light of our above observations." However,the AO disallowed the discounting charges of ₹ 1.32 Crores. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA).Before him it was contented that the finding of the AO were in contradiction with the directions of the Tribunal,that the it had actually incurred finance charges and other expenses,that bill discounting transactions were in the nature of financial transactions,th .....

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owance of discounting charges/finance charges had been deleted in group cases by the FAA.After considering the submissions of the assessee and the assessment order,he held that that the issue for the appeal under consideration was identical to the facts of the c a s e o f M / s . D e l t a i n t e r n a t i o n a l - a g r o u p c o n c e r n , that while deciding the appeal of that assessee for the AY.1996-97the disallo - wance of discounting charges was deleted.Following the same,the FAA allow .....

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e rival submissions and perused the material before us.We find that the issue of discounting charges have been extensively deliberated upon by the Tribunal in the group cases and it had dismissed the appeals filed by the AO.s for the AY.1997-98.We would like to reproduce the decisions of Delta International,delivered by the Tribunal on 25.09.2013(supra) and it reads as under: Ground Nos. I to 3 relate to disallowance of discounting charges/ interest of ₹ 46, 32, 752.Briefly stated the fact .....

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llowing another order by the Tribunal in the case of another group concern of the assessee the"Fellowship corporation vs.JCIT[ITA No.4352/MumI2001]. Pursuant to the direction given by the Tribunal, the Assessing Officer repeated the addition towards finance charges in the present case. The learned CIT(A), however deleted the said addition. The Revenue has come up in appeal against such deletion.The ld. AR has brought to our notice that the issue under consideration is squarely covered with .....

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ticed that the assessee did not produce any additional evidence to co-relate the financing charges with the business expenditure.As against that, the learned AR invited our attention towards various details furnished before the Assessing Officer during the course of such fresh proceedings. First letter of the assessee in the fresh proceedings is dated 05.09.2006 by which it furnished Fund flow statement, Balance sheet and profit and loss account for the year in question and for the earlier year, .....

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