TMI Blog2021 (9) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... strated that the amount paid by the assessee to the parties was without any 'business expediency' moreover, no independent enquiry has ever been conducted by the A.O. from the said parties. We found support from the decision of Highways Construction Co. P. Ltd. [ 1992 (11) TMI 86 - GAUHATI HIGH COURT] wherein it was categorically held that the A.O. has to bring on record any interest actually been collected or received and the collection of the interest was reflected in the accounts. In the present case, there is no such finding on record and even otherwise the findings of the Income tax officer are only to the extent that the assessee ought to have collected interest. Assessee had not received any interest then we fail to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case, ld. AO has erred in charging interest U/s. 234B and 234C of the I.T. Act, 1961. 3. The appellant may please be permitted to raise any additional or alternative grounds at or before hearing. 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The brief facts of the case are that the assessee is an individual and prop. of M/s. Goyal Enterprises Gharsana, who indulged in business of grains gaur and agriculture products. He filed its return of income on 30/09/2013 declaring total income of ₹ 3,54,590/-. The A.O. completed the assessment u/s. 143(3) of the Income Tax Act, 1961 (in short, the Act) on 11/03/2016 by making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance of interest of ₹ 8,89,780/- and added the same in the income of the assessee. In this regard, the ld. AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the written submissions filed before the Bench and the same is reproduced below: Ld. CIT(A) has erred in confirming the addition made on a/c of disallowing interest ₹ 8,89,780/- and adding it into income. He has made this addition for not charging interest on advances given by the assessee. Ld. AO has made addition ₹ 8,89,780/- on account of not charging interest on the debtors (AO's order page 10). Ld. AO has erred in disallowing interest ₹ 8,89,780/- and add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that addition on account of notional interest should be made. Here I would like to draw your attention towards the sundry creditors list of the year, where we have not given interest to our various creditors of ₹ 1,41,01,952/- so it may be taken in notes that the same money is advanced to those party mentioned by AO. The amount outstanding from the trade debtors cannot be held as amounts given on loan. No materials have been brought by the Assessing Officer to impute that the delay in receiving the outstanding balance amounts from the four debtors parties was on account of deliberate act of the appellant. The appellant's case is well supported by the following decisions: (i) D H Secheron Electrodes P. Ltd. v. Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) of the Act and all the parties were transacted within the normal course of business. It was further submitted that the amount provided by the assessee to the said parties comes under the ambit of commercial expediency. The said amount was provided by the assessee to the parties for augmenting the business prospects and all the parties listed in the order of the AO. are dealing in regular sale and purchases with the assessee and none of those parties are in any way related to the assessee. In order to justify the payment to the said parties, it was specifically submitted by the assessee that since there was decrease in the price of guar, therefore, the orders which were placed, could not be finalized and the advances given for procuring t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in the case of S.A. Builders Ltd. Vs CIT (SC) 288 ITR 1 and Punjab Stainless Steel Industries Vs CIT 324 ITR 396 (Del). However, the facts and the pari materia contained in that judgment is not applicable to the facts of the present case. In these very cases, it was categorically held that once it is borne out from the record that the assessee had borrowed certain funds on which liability to pay tax is being incurred and on the other hand, certain amounts had been advanced to sister concerns or others without carrying any interest and without any business purpose, the interest to the extent the advance had been made without carrying ay interest is to be disallowed under Section 36(1)(iii) of the Act. However, in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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