Tribunal remits interest disallowance issue to AO, directs reexamination of prior period expenditure

The Tribunal remitted the issue of disallowance of interest paid on unsecured loans back to the Assessing Officer for further examination, setting aside the CIT(A)'s decision in favor of the assessee. Similarly, the Tribunal directed a detailed analysis by the AO on the allowability of prior period expenditure, remitting the issue for reconsideration in accordance with the law. The Tribunal allowed the revenue's appeal for statistical purposes and dismissed the assessee's cross objection as infructuous.

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Issues:
1. Disallowance of interest paid on unsecured loans.
2. Allowability of prior period expenditure.

Issue 1: Disallowance of interest paid on unsecured loans:
The revenue appealed against the CIT(A)'s deletion of an addition of Rs. 44,42,893 made by the AO on interest paid on unsecured loans. The AO disallowed the interest claimed by the assessee for the period before 01-04-2009. The CIT(A) allowed the claim, stating that the interest expenditure was genuine and allowable. The Tribunal set aside the orders, requiring a fresh look by the AO to verify the claim's allowability in accordance with the law. The issue was remitted back to the AO for further examination.

Issue 2: Allowability of prior period expenditure:
The revenue contested the CIT(A)'s decision to allow a sum of Rs. 10,07,484 considered by the assessee as prior period items. The AO disallowed the expenditure, stating lack of evidence regarding a dispute with M/s Bharath Mall. The CIT(A) allowed the claim, noting evidence produced by the assessee regarding the dispute settlement. The Tribunal found that a detailed analysis was necessary to determine the claim's nature and remitted the issue back to the AO for reconsideration in accordance with the law.

The Tribunal allowed the revenue's appeal for statistical purposes, while dismissing the cross objection filed by the assessee as infructuous.

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