9911796707
TMI Blog2020 (8) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... is not only erroneous both on facts and in law in so far as it is prejudicial to the assessee but is also without application of mind to the facts submitted. 2. The learned CIT(A) erred in confirming the addition of Rs. 15,50,466 as Sales tax advance payment in spite of detailed submissions with evidences that this is not claimed in the P & L ale and hence cannot be added. 3. The learned CIT(A) erred in confirming the addition of Rs. 49,50,000/- as disallowance of interest in spite of evidence and submissions that the amounts advanced to subsidiary is for business purpose of getting continuous power and in spite of the decision of the Supreme Court. 4. Without prejudice to the above, the learned CIT erred in confirming the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 & 4 raised by the assessee is on account of disallowance of interest amounting to Rs. 49,50,000/- being interest payable on loan advanced to subsidiary M/s. Sagar Power Ltd. 6. Further, the assessee is aggrieved and has raised Ground of appeal No.5 on addition of Rs. 35,12,122/- being the interest on loan taken over by the assessee on behalf of the subsidiary company M/s. Sagar Power Ltd. 7. Briefly in the facts of the case the assessee for the year under consideration filed the return of income declaring total income at NIL after set off of brought forward losses. The case of the assessee was picked up for scrutiny. The Assessing Officer noted that the assessee had paid sum of Rs. 15,50,466/- against demand of Rs. 31,00,933/- raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities below as the amount has only been shown as an advance and not claimed as an expenditure. 11. Now, coming to the second stand of the Assessing Officer even if the said amount was contingent liability, but in view of the provision of section 43B of the Act, such amount are duly allowable as expenditure in the year of payment. However, the same is not the case of the assessee and accordingly, we direct the Assessing Officer to delete the addition of Rs. 15,50,466/-. Thus, Ground of appeal No.2 raised by the assessee is allowed. 12. Now, coming to the Ground of appeal Nos. 3 & 4 raised by the assessee. 13. Briefly in the facts of the case relating to the issue the Assessing Officer noted that during the year under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the assessee stood to gain benefit directly. The assessee was a cement manufacturing company. Further, he drew our attention to pages 22 to 25 of the Paperbook and pointed out that no interest was paid on this loan by the assessee and the interest was charged to the subsidiary company at first instance itself. 15. In respect of Ground of appeal No.5 raised by the assessee, it was pointed out that further disallowance was also been made on account of notional interest on the aforesaid loan to the subsidiary. He pointed out that the Assessing Officer treated the loan of ICICI bank as advance to the subsidiary and made the said addition in the hands of the assessee. 16. The Ld.DR for the Revenue pointed out that there is no evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be said to be a business transaction under which the benefit flowed to the assessee. The assessee was engaged in the manufacturing of cement and such power supply by the subsidiary advanced the business of the assessee. We are of the view that following the dictate of the Hon'ble Supreme Court in S.A. Builders Ltd. (supra), there is no merit in disallowance of interest on such advancement of loan to the subsidiary. 18. However, in the present set of facts, there is another aspect of the issue also. The perusal of the details filed at pages 22 to 25 of the Paperbook reflects the entries passed by the assessee in its books of accounts. The details furnished at page 25 of the Paperbook reflects that in the account of interest on unsecur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in interest admitted. The submissions of the assessee in this regard was that the interest received from M/s. Sagar Power Ltd. was paid to ICICI Bank and such payment was an expenditure, was not accepted. The assessee is in appeal agisng the findings of the Assessing Officer which has been upheld by the CIT(A). 20. We have already adjudicated the issue relating to the availment of loan from ICICI bank and its advancement to subsidiary M/s. Sagar Power Ltd. in the paras above. The assessee on the other hand has not claimed the expenditure of interest due to ICICI bank and has also not shown the interest received from M/s. Sagar Power Ltd., as it had set off the interest account i.e. interest receipt from subsidiary with the interest due to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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