Tribunal allows appeal with condonation of delay, deletes addition under Section 68, and overturns disallowance of interest.

The appeal was allowed by the Tribunal, with the delay in filing the appeal being condoned due to an acceptable explanation. The addition under Section 68 of the Income Tax Act, concerning share capital, was deleted as the Revenue failed to provide sufficient evidence to support their claim. Additionally, the disallowance of interest on late payment of TDS under Section 37 was overturned by the Tribunal, considering it as a deductible expense.

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Issues Involved:
1. Delay in filing the appeal.
2. Addition under Section 68 of the Income Tax Act.
3. Disallowance of interest on late payment of TDS under Section 37 of the Income Tax Act.

Summary:

1. Delay in Filing the Appeal:
The appeal was filed with a delay of 111 days. The delay was explained through an affidavit by the Director of the assessee company, citing inadvertent delay in passing the order to the Chartered Accountant. The Tribunal found the explanation acceptable and condoned the delay as there was no deliberate or intentional cause.

2. Addition under Section 68 of the Income Tax Act:
The addition of Rs. 5,25,00,000/- was made under Section 68 concerning share capital received from Mewad Tradelink Pvt. Ltd. and Jai Jeen Mata Marketing Pvt. Ltd. The assessee provided PAN, IT returns, bank statements, and confirmations to prove the identity, genuineness, and creditworthiness of the parties. The Revenue's argument was based on the statement of the common Director, Shri S. Sharma, and alleged that the transactions were a device to reduce tax liability. However, the Tribunal found no cogent evidence from the Revenue to support this claim and noted that the forfeited share application money should be treated as a capital receipt, not taxable under Section 68. The Tribunal relied on several judgments, including CIT v. Lovely Exports (P.) Ltd. and CIT vs. Steller Investment Ltd., to support the assessee's case. Consequently, the addition under Section 68 was deleted.

3. Disallowance of Interest on Late Payment of TDS under Section 37:
The assessee claimed interest on late payment of TDS amounting to Rs. 2,19,170/-. The Ld. AO disallowed it, considering it not allowable under the Income Tax Act. The Tribunal, however, found that interest on late payment of TDS is compensatory and not in the nature of a penalty. Relying on judgments such as CIT vs. Oriental Insurance Co. Ltd. and Deputy Commissioner of Income-tax v. Messee Dusseldorf India (P.) Ltd., the Tribunal allowed the interest as a deductible expense under Section 37. The disallowance was thus quashed.

Conclusion:
The appeal was allowed, with the Tribunal deleting both the addition under Section 68 and the disallowance of interest on late payment of TDS.

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