TMI Blog2018 (4) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... ced that neither of the parties have brought on record the details of deposits, details of accrued interest accounted by the assessee and that was uploaded by the bank, difference between both the figures etc. Any kind of decision can be taken only if these details are examined, which requires verification at the end of the Assessing Officer. If the difference has arisen on account of accrued interest on deposits kept with the banks, we are of the view that no addition is called for. Accordingly, we restore this issue to the file of the Assessing Officer with the direction to examine these details and take decision as per discussion made. Addition being the difference between income booked by the assessee and income shown in TDS certificate - AS submitted that if income of ₹ 1,24,282/- is assessed in the hands of the assessee, corresponding TDS should be given credit - Held that:- We find merit in the alternative contention of the assessee and accordingly, we direct the Assessing Officer to give corresponding TDS credit to the assessee. Addition on TP adjustment - non-collection of interest from its AE for advances made - Held that:- No correspondence exchanged between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has earned dividend income of ₹ 550 lakhs and the assessee has disallowed a sum of ₹ 50,000/- only u/s. 14A of the Act. When questioned, the assessee submitted that it has invested a sum of ₹ 1 crore in his subsidiary company named M/s. Virgo Valves Controls Ltd. in the earlier years out of its own funds and the dividend was received from the above said company. Accordingly, it was submitted that there was no much investment activity and hence disallowance made at ₹ 50,000/- would meet the requirements of sec.14A of the Act. The Assessing Officer took the view that the disallowance has to be computed in accordance with rule 8D of the I.T. Rules. Accordingly, the Assessing Officer worked out disallowance at ₹ 4,55,191/-, which included the disallowance out of interest expenditure as per Rule 8D(2)(ii). The AO, however, did not give set off of disallowance of ₹ 50,000/- made by the assessee. 4. The learned CIT(A) agreed with the view taken by the Assessing Officer and accordingly confirmed the working of the Assessing Officer. It was submitted before the learned CIT(A) that the Assessing Officer has not given set off of the amount of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y response from the banks. The assessee further submitted that it is accounting for accrued interest on deposits every year and when deposits are closed, the differential interest is accounted. Accordingly, it was submitted that the difference between ITS data and accounts of the assessee, if any, would get automatically adjusted in the subsequent year when the deposits are closed. The above said explanation of the assessee was not convincing to the AO and hence the Assessing Officer added the difference amount of ₹ 1,74,090/- and the same was also confirmed by the learned CIT(A). 7. We have heard the parties on this issue and perused the record. We noticed that the neither the Assessing Officer nor the assessee has given details of breakup of receipts shown in the ITS record and the accounts of the assessee. Before the tax authorities, the assessee has pointed out that the difference has mainly arisen on account of accrued interest on deposits kept with the Bank of Baroda and Canara Bank. But those details have not been furnished. Hence, in the absence of relevant details, we are unable to express any view on this issue. In any case, if the difference has arisen for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that if it had paid commission @ 5%, it would have paid a sum of ₹ 3.04 lakhs. In case interest is charged on the advances given to its AE, it would have charged interest @ 4.5%, which would work out to ₹ 1,82,598/- only. Since the probable interest receivable is lower than the probable commission payable, the assessee pleaded that no TP adjustment is required. 12. Above said explanation was not acceptable to the TPO. He noticed that the assessee has availed loans on the security of its business assets and the average interest charged by the lenders on such loans worked out to 10% p.a. Accordingly, the TPO determined arms length interest rate at 9% and computed interest on the advance given to AE and accordingly proposed addition of ₹ 1,82,598/-. The Assessing Officer accordingly made addition. The learned CIT(A) also sustained the same. 13. Before us, the learned AR reiterated the submissions made before the learned CIT(A). The Learned DR, on the contrary, placed reliance on the order passed by the learned CIT(A). 14. We have heard the parties on this issue. We noticed that the assessee has tried to justify non-collection of interest from i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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