Appeal outcome on tax issues for AY 2009-10: CIT(A) order partially overturned, directions on deductions & additions.

The appeal against the CIT(A) order for AY 2009-10 involved issues including the rejection of a claim under section 80IB(11A), non-allowance of interest on a bank overdraft, and addition of alleged advances given by the assessee. The ITAT directed the AO to reconsider the claim under section 80IB(11A) in light of actual transportation undertaken, verify the source of borrowing for the bank overdraft, and adjust interest income accordingly, and restrict the addition of advances by computing interest income at 12% instead of 18%. The appeal by the assessee was partially allowed for statistical purposes.

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Issues involved: Appeal against CIT(A) order u/s 143(3) for AY 2009-10: 1. Rejection of claim u/s 80IB(11A) of Rs. 1,46,564. 2. Non-allowance of interest paid on bank overdraft of Rs. 1,93,691. 3. Addition of Rs. 12,00,000 on alleged advances given by assessee.

1. Rejection of claim u/s 80IB(11A): Assessee engaged in handling, storage, and transportation of food grains claimed deduction u/s 80IB(11A) for income from warehousing. AO rejected claim due to lack of transportation facility. ITAT found assessee had warehouse and storage facilities, transportation was hired. Directed AO to re-decide after considering actual transportation undertaken.

2. Non-allowance of interest on bank overdraft: AO added Rs. 1,93,691 as interest received on bank deposits not disclosed by assessee. Assessee argued loan used for warehouse construction, not accounted for against interest receivable from bank. ITAT directed AO to verify if borrowing was from FDRs and adjust interest income accordingly.

3. Addition of advances given by assessee: AO added Rs. 12,00,000 as interest earned on money lending business accepted during survey u/s 133A. ITAT directed AO to restrict addition by computing interest income at 12% instead of 18% due to prevailing market rates.

The appeal by the assessee was allowed in part for statistical purposes.

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