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TMI Blog2021 (8) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... er alia that :- "1. That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (hereinafter referred to as 'CIT (An, grossly erred in confirming the addition of Rs. 9,80,782/- made u/s 40(a)(ia) of the income tax act, 1961 which is bad in law and called for. (Ground No-1) 2. That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (hereinafter referred to as 'CIT (A)'), erred in confirming the addition of Rs. 2,68,529/- made u/s 36(1)(iii) of the income tax act,1961 which is bad in law and not called for. (Ground No-2) 3. That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scientific Works Pvt. Ltd., (iii) M/s. Philips Corporation, (iv) M/s. Precision Moulds, (v) M/s. Prowell Precision Inc., (vi) M/s. S.K. Industries, (vii) M/s. S.R. Engg. Works, (viii) M/s. Super Control & Automation, and (ix) M/s. Universal Infratech, it is not admissible for payment of interest. 3. AO also made addition of Rs. 7,24,761/- on account of excessive bill discounting charges paid to one M/s. Sandhar Enterprises on the ground that assessee has availed that bill discounting facilities from two related parties, namely, Sandhar Enterprises and Sandhar Automotives (Dhumspur). 4. AO also made an addition of Rs. 1,51,500/- by way of disallowance of proportionate interest qua the advance made to M/s.Anant Raj Industries Ltd. & M/s. Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively totaling Rs. 11,39,710/-. 9. Ld. AR for the assessee challenging the impugned order passed by the ld. CIT (A) firstly contended that there is a factual error in the total amount of addition made by the AO u/s 40(a)(ia) of the Act as total of the amount paid to six companies, referred to in that table extracted at preceding para 7, comes to Rs. 21,04,890/- whereas as per assessment order total has been wrongly computed at Rs. 21,20,492/-. Since this is a factual error on the face of record AO is directed to provide relief of Rs. 15,602/- made on account of excess addition due to totaling error u/s 40(a)(ia) of the Act. Ld. CIT (A) provided the relief to the tune of Rs. 11,39,710/- and accordingly, net addition now under challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,68,529/- @ 12% per annum on the advance made by the assessee as the plant and machinery was not put to use. Ld. CIT(A) confirmed the addition. 13. Ld. AR for the assessee contended that the entire advance was given by the assessee for purchase of part of the replacement machinery which was ordered in the regular course of business and not for extension of existing business. It is further contended by the ld. AR for the assessee that the assessee company was incorporated in the year 2006 and during the year, total assets were capitalized/put to use by the assessee under the head "plant & machinery" at Rs. 2.34 crores and out of total machinery, imported machinery put to use is Rs. 1.44 crores and all these details are available at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that assessee has failed to bring on record any documentary evidence regarding existence of any such agreement between the parties to substantiate its claim without interest. However, the ld.CIT(A) restricted this addition to Rs. 1,40,946/- by returning following findings :- "20. However on the other hand the appellant has been unable to justify the difference in the rate of interest of 16% and 19% paid by the appellant for the bill discounting charges to two associate concerns. On one hand the appellant is paying bill discounting charges from 15% to 16% to Sandhar (Dhumaspur) and on the other hand the appellate is paying 19% charges to Sandhar Enterprises. In this regard, a detailed working of the interest expenses paid by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahar Chits Pvt. Ltd., however confirmed the addition of Rs. 1,42,500/- in respect of M/s. Anant Raj Industries Ltd. which is under challenge before the Tribunal. 19. Ld. AR for the assessee contended that identical ad hoc addition made by the AO by calculating the interest @ 12% per annum has been deleted by the coordinate Bench of the Tribunal in assessee's own case for AY 2011-12 (supra) by returning following findings:- "4. Ground number 2 is directed against the disallowance of interest computed on ad hoc basis at the rate of 14$ of Rs. 3,49,151/-. 4.1. The assessee has interest-free funds of Rs.l,59,83,901/-. The addition in question was not given during the year. The presumption is that interest-free funds were utilised for givi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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