TMI Blog2009 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... business and, therefore, he disallowed the same – Held that both the actions of AO are not correct - deduction are allowed. - 328/2008 - - - Dated:- 24-7-2009 - A. K. SIKRI and VALMIKI J.MEHTA, JJ. Ms. P.L. Bansal with Ms. Anshul Sharma, Mr. Paras Chaudhary, Advocate, for the appellant. Mr. Santosh K. Aggarwal,for the respondent. JUDGMENT VALMIKI J. MEHTA, J. - This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter 'the Act') is preferred by the Revenue against the order dated 31.5.2007 of the Income Tax Appellate Tribunal (ITAT) whereby the ITAT accepted the appeal filed by the assessee/respondent and set aside the orders of the Assessing Officer and the CIT(Appeals). 2. There are two issues in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The counsel for the appellant has also urged before this Court that the Assessing Officer correctly disallowed the claim of the interest. 4. We have heard the counsel for the parties. 5. On the issue with regard to the disallowance of Rs. 5,64,90,487/-, we find that the Assessing Officer was not justified in relying upon the report of the Auditor by which the Auditor had said that the accounts do not reflect the true and complete affairs of the company. This is only a half truth. The fact of the matter is that the Auditor of the assessee company has given such a remark in the Auditor's report because on account of a search and seizure operation carried out by the Income Tax Department at the business premises of the assessee va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause in respect of the transactions with the same party which resulted in profit, the same was brought to tax but when the loss was claimed the Assessing Officer ignored the same on the ground that the same is sham. We note that in para 34 of the order of the ITAT the ITAT has also examined the transactions on the basis of pages 22 to 30 of the paper book before it and has given its opinion as to the genuineness of the transaction. The contention for the Revenue that the ITAT has, therefore, not applied its mind to the record and transactions are, therefore, clearly not correct. In fact, as stated above, even the CIT(A) had duly applied its mind to the transaction by reference to the record which was produced by the Assesee. 6. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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