TMI Blog2022 (10) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... alled for. The claim was also made by the ld. AO that no deduction TDS u/s 194C of the Act related to payment of freight but the assessee has submitted the judgment of jurisdictional High Court and respectfully considering the order of Hon able High Court, the addition u/s 40A(3) is liable to be rejected. Loan by converting share application money was duly missed out from the tax audit report - The mistake was duly rectified by the CA and copy of the certificate are enclosed. Only tax audit report is not a sufficient for adjudicated the issue. The books of account is relevant for analysis the issue - DR had not made any strong objection in particular issue.In the ledger account of the assessee the balance of loan is reflected. Mere, observation of Tax Audit report is not serving the purpose. So, the addition made amount is liable to be quashed. Disallowance of 1/5 expenses of the car, scooter, motorcycle, telephone and depreciation on car which was used for director s personal expenses - There is no specific findings by both the revenue authorities. The disallowance cannot be done on the adhoc basis where the total expenses are .04% of the total turnover. CIT(A) is equall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s leave to add, alter, amend or withdraw any grounds of appeal before the final hearing. 3. The brief fact of the case is thatthe assessment was completed, and the addition was made in different heads. The assessee had paidinterest related to the unsecured loan creditors @18%. The ld. AO reduced it to @12% also, the ld. AO disallowed balance interest u/s 36(1)(iii) of the Act @ 6% on the reason that assessee was paying higher interest in relation to bank interest. In the appeal the loan interest was enhanced @15% disallowance of interest @3% interest by the order of CIT(A). 3.1 In the next ground the disallowance was made u/s 40A(3) for payment of freight related purchasing the agricultural product. The amount of Rs.4,16,256/- is added back with the total income. 3.2.In other issue, Rs.10 lac was added back with the total income of the assessee on account of share application money which was converted to loan and said loan was not mentioned in the tax audit record. So, the loan amount of Rs.10 lac from directors was added back with the total income of the assessee. 3.3. In other issue the ld. AO disallowed 1/5 expenses of the car, scooter, motorcycle, telephone and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant paragraph is extracted as below:- 12 .We find that the disallowance has been made by the Assessing Officer on account of interest paid to relatives under sec. 40A(2) of the Act. We find that the Assessing Officer has brought no material on record to show that howthe interest paid by the assessee was excessive by comparing it with the market rate of interest on loan on the date of taking of the loan by the assessee. In absence of the same, in our considered view, the disallowance made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) cannot be sustained in law, hence, we set aside the orders of the lower authorities and delete the disallowance of interest expenditure of Rs. 41,467/- and allow the ground of appeal of the assessee. ii) High Court of Punjab Haryana in the case ofCommissioner of Incometaxv. Pankaj Munjal Family Trust[2010] 326 ITR 286 (Punjab Haryana); Held:- Section 36(1)(iii) of the Income-tax Act, 1961 - Interest on borrowed capital - Assessment years 1983-84, 1984-85, 1986-87 and 1988-89 - Where assessee-trust had taken a loan at 16 per cent from family concerns which was utilized by it for purchase of 4 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicability of section 194C of the Act as considered by Division Bench of this Court in the case of CIT (TDS) v. United Rice Land Ltd.[2010] 322 ITR 594 1. A further finding of fact is that the freight payment is Rs. 1,72,723 and none of the individual payment exceeded Rs. 20,000. It was also not disputed that the payments were made on the basis of individual GRs issued by the truck owners for each trip separately. Although aggregate of payments of two truck owners during the assessment year exceeded Rs. 20,000 which would still not lead to deduction of tax at source because there was no contract for a specific period, . 7.2. The ld. Sr. DR argued relied on the observation of the revenue authorities had not made any strong objection about acceptance of additional evidence. There is no any contrary judgment was filed against the submission of assessee. 8. Ground No. 4, the ld. Counsel further argued that Shri Sham Sunder Shri Rakesh Kumar were having credit balances as unsecured loans as opening balances, the Account Ledgers are annexed in APB Page no. 141 144. Out of these Rs.5,00,000 each was transferred on 01/04/2011 of both these persons to Share Applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With regard toGround-3, the assessee paid the freight for purchasing agricultural product. The freight is included in the bill amount and related with the purchase value. Also, the assessee submitted the certificate from Panchayat where it is clear that there is no bank for completing the banking transaction for payment to the transporter. This cash payment is covered under Rule 6DD(J) of the Income Tax Rule 1962. So, the addition u/s 40 A(3) is uncalled for. The claim was also made by the ld. AO that no deduction TDS u/s 194C of the Act related to payment of freight but the assessee has submitted the judgment of jurisdictional High Court and respectfully considering the order of Hon able High Court, the addition u/s 40A(3) is liable to be rejected. 10.2. All the other issue in Ground no-4, related to loan by converting share application money amount of Rs.10 lac was duly missed out from the tax audit report. The mistake was duly rectified by the CA and copy of the certificate are enclosed. Only tax audit report is not a sufficient for adjudicated the issue. The books of account is relevant for analysis the issue. The ld. Sr. DR had not made any strong objection in particular is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
