Tribunal allows appeal, remands interest disallowance for reevaluation. Emphasizes need for fair consideration.

The Tribunal allowed the appeal for statistical purposes, condoning the delay in filing due to valid reasons of ill health without mala-fide intent. The disallowance of interest paid to the bank was remanded to the AO for reevaluation as the CIT(A) erred in rejecting contentions not raised before the AO. Similarly, the rejection of explanations and evidences by the CIT(A) was set aside, emphasizing the need for proper consideration and adherence to legal procedures, leading to a fair resolution of the issues raised in the case.

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Issues:
1. Condonation of delay in filing the appeal before the tribunal.
2. Disallowance of interest paid to the bank on term loan and working capital.
3. Rejection of explanations and evidences by the CIT(A) on the grounds that they were not raised before the AO.

Issue 1 - Condonation of Delay:
The appeal was filed late by 28 days, beyond the time prescribed under section 253(3) of the Income-tax Act, 1961. The assessee submitted an application for condonation of delay, citing the ill health of the person responsible for filing the appeal. The Tribunal, after considering the reasons provided, supported by an affidavit, and finding no mala-fide intent or negligence, decided to condone the delay and proceed with the appeal on merits.

Issue 2 - Disallowance of Interest:
The AO disallowed interest paid to the bank on term loan and working capital, alleging that interest-free loans were advanced to the director from borrowed funds. The assessee contended that the advances were in the form of loans/advances to the director for property purchase, not interest-free loans. The CIT(A) upheld the addition, stating that the arguments were not raised before the AO. The Tribunal found the rejection of contentions by the CIT(A) erroneous, as the powers of the CIT(A) are co-terminus with those of the AO. The issue was restored to the AO for de-novo determination on merits.

Issue 3 - Rejection of Explanations and Evidences:
The CIT(A) rejected the explanations and evidences provided by the assessee, stating they were not raised before the AO. The Tribunal held that the CIT(A) should have considered the submissions and, if necessary, remanded them to the AO for examination. As the CIT(A) did not provide reasons for non-consideration, the issue was set aside and restored to the AO for proper determination in accordance with the law.

In conclusion, the appeal was allowed for statistical purposes, and the issues of delay condonation, disallowance of interest, and rejection of explanations and evidences were addressed in detail, ensuring fair play and adherence to legal procedures.

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