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M/s. Elcon Drugs and Formulations Ltd. Versus The Income Tax Officer, Ward 4 (2) , Jaipur.

2016 (9) TMI 646 - ITAT JAIPUR

Non-deduction of tax in respect of interest paid to non-banking finance companies - Held that:- Since there are conflicting views of the Hon’ble High Courts, therefore, the view favourable to the assessee is being adopted by respectfully following the judgment of the Hon’ble Supreme Court in the case of CIT vs. Vegetable Products Ltd (1973 (1) TMI 1 - SUPREME Court ). The fact whether the amount was outstanding requires verification at the end of the AO hence the order of the ld. CIT (A) is set .....

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ictional High Court in the case of G.K. Contractor [2009 (1) TMI 840 - RAJASTHAN HIGH COURT] has held that when estimated profit is considered after rejecting assessee’s books of accounts by invoking the provisions of section 145(3) of the Act, no separate addition can be made even u/s 68 of the Act, even though the assessee has failed to discharge the onus of proof in explaining the amount shown in the books of accounts as ‘market outstanding’. Respectfully following the same, we direct the AO .....

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nsidering the totality of the facts and considering the past history of the assessee, we restrict the disallowance to the extent of ₹ 15,00,000/-. The AO is directed to restrict the addition to the extent of ₹ 15,00,000/-. This ground of the assessee is partly allowed. - ITA No. 995/JP/2013 - Dated:- 4-8-2016 - SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM For The Assessee by : Shri Rohan Sogani (CA) For The Revenue : Shri Raghuvir Singh Dagur (Addl. CIT) ORDER PER SHRI KUL B .....

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ay please be granted by quashing the said disallowance of ₹ 1,840/-. 2. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in disallowing a sum of ₹ 4,36,455/- of interest paid to following NBFCs u/s 40(a)(ia) of IT Act, 1961 :- S.No. Name of Parties Amount (in Rs. 1. Kotak Mahindra Prime Ltd. 54,347/- 2. Cholamandalam DBS 69,170/- 3. Indiabulls Financial 3,12,938/- Total : 4,36,455/- The action of the ld.CIT (A) is .....

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Ranchi 1,14,800/- Total : 3,50,800/- The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 3,50,800/-. 4.(a) In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in rejecting the books of accounts of the assessee by invoking the provisions of section 145(3) and thereafter making a trading addition of ₹ 23,39,08 .....

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. CIT (A) has erred in confirming the action of the ld. AO in not considering the submissions made during the course of assessment proceedings. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by considering the complete submissions and granting relief accordingly. 2. Briefly stated the facts are that the case of the assessee was picked up for scrutiny and the assessment was framed under section 143(3) vide order dat .....

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made on account of disallowance of penalty of sales tax of ₹ 1,840/-, confirmed the addition of ₹ 4,36,455/- on account of interest u/s 40(a)(ia), confirmed the addition of ₹ 3,50,800/- u/s 68 and also trading addition of ₹ 23,39,083/- and deleted the addition made on account of PF contribution. 3. The first ground of the assessee s appeal is against confirming disallowance of a sum of ₹ 1840/- on account of sales tax. 3.1. The ld. Counsel for the assessee does not .....

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submitted that the entire expenditures were paid during the year under appeal. No amount was outstanding on the last date of financial year. He relied on the decisions rendered in the case of Merilyn Shipping & Transports vs. ACIT (2012) 16 ITR (Trib.) 1 (Vishakhapatnam)(SB), CIT vs. Vector Shipping Services Pvt. Ltd. in ITA No. 5219/Del/2012. The ld. Counsel submitted that this view has been followed by the Coordinate Bench of the Tribunal at Jaipur. The ld. Counsel submitted that when two .....

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on of Hon ble Himachal Pradesh High Court in the case of Palam Gas Service vs. CIT (2015) 370 ITR 740 (HP). 4.3. We have heard rival contentions and perused the material on record. The contention of the ld. Counsel for the assessee is that no amount was outstanding on the last date of financial year and relied upon the decisions of Coordinate Bench in the case of Girdhari Lal Bargoti (ITA No. 757/JP/2012) and K.Y. Continental Interiors (P) Ltd. (ITA No. 595/JP/2013) wherein the Coordinate Bench .....

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of the Hon ble Supreme Court in the case of CIT vs. Vegetable Products Ltd (supra). The fact whether the amount was outstanding requires verification at the end of the AO hence the order of the ld. CIT (A) is set aside. The issue is restored to the file of the AO to verify whether any amount is payable on the last date of financial year in the balance sheet and in case he finds that no amount is payable on the last day of the financial year, he would delete the disallowance. 5. Ground no. 3 is a .....

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can be made to the income of the assessee. The ld. Counsel submitted that where books are rejected by the AO, no further addition can be made. Reliance is placed on the decision of Hon ble Punjab & Haryana High Court in the case of Dulla Ram (2014) 42 taxmann.com 349 (P&H). 5.2. On the contrary, the ld. D/R supported the orders of the authorities below. 5.3. We have heard rival contentions and perused the material available on record. We find that the advances are in the nature of trade .....

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