9911796707
TMI Blog2021 (12) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and export of readymade garments. Assessee filed its return of income for A.Y. 2014-15 on 19.11.2014 declaring income of Rs. 4,04,35,560/- under the normal provision of tax and book profits of Rs. 4,01,64,390/- under MAT. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 14.12.2016 and the total taxable income was determined at Rs. 34,24,39,329/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 08.05.2017 in Appeal No.491/16-17 allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: 1. "On the facts and in the circumstances of the case, the Ld. CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 23,07,04,395/- of Vikas Superfine Garments Pvt. Ltd as unexplained and thus made aggregate addition of Rs. 29,26,42,600/-. 6. Aggrieved by the order of AO, assessee carried the matter before CIT(A). Before CIT(A), assessee made detailed submissions. CIT(A) after considering the submissions made by the assessee and for the reasons stated in the order, deleted the addition. 7. Aggrieved by the order of CIT(A), Revenue is now in appeal. 8. Before us, Ld DR took us through the order of AO and supported his order. Ld AR on the other hand reiterated the submissions made before the lower authorities and further pointed to the submissions made which are incorporated in the order of CIT(A). He thus supported the order of CIT(A). 9. We have h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of purchases made by the assessee from its sister concern was at Arm's Length Price and no adverse finding has been brought on record by the AO and the AO has never doubted the purchases made by assessee from those associated concern. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason the interfere with the order of CIT(A) and thus the Ground of Revenue is dismissed. 10. Ground No.2 is with respect to deleting the disallowance of Rs. 93,59,041/- made u/s 37(1) of the Act. 11. During the course of assessment proceedings, AO noticed that assessee had claimed interest on Government dues amounting to Rs. 93,61,171/-. Assessee submitted that it was with respect to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses to be allowable expenses and directed the AO to delete the addition. Aggrieved by the order of CIT(A), Revenue is now in appeal. 13. Before us, Learned DR took us to the observations of AO and submitted that benefit was obtained on the basis of the erroneous declaration and therefore the Custom Authority directed to pay the interest which is penal in nature. He thus supported the order of AO. 14. Learned AR on the other hand reiterated the submissions made before the lower authorities and further submitted that assessee is engaged in business of manufacturing, trading and export of readymade garments. For the exports undertaken by the assessee, it had received incentives from the Govt. and during the year under consideration ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue in the present ground is with respect to the claim of interest expenses u/s 37 of the Act. It is the case of the Revenue that the interest paid by the assessee is penal in nature and therefore Explanation to Section 37 of the Act gets triggered and therefore the amount is not allowable. We find that CIT(A) while deciding the issue in favour of the assessee has given a finding that Deputy DGFT vide letter dated 24.04.2013 had asked the assessee to refund the incentive received earlier along with interest and the letter nowhere mentioned that assessee had committed any offence under Foreign Trade Regulation. CIT(A) while deleting the addition ahd also placed reliance on the decision rendered by Hon'ble Delhi High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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