TaxTMI 
TaxTMI 
2013 (2) TMI 344
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....vant period, the highest rate of interest paid to outside parties as well as related parties was 18% per annum, and therefore no case of disallowance could be made out by the Department. The learned CIT-DR has relied on the orders of the AO and the CIT(A). 4. We have considered rival submissions and perused the orders of the AO and the CIT(A). We find that the assessee was paying the interest to outsiders at different rates of interest ranging from 12% to 18% per annum. The assessee has paid the rate of interest to the related parties at 18% per annum. The AO has invoked provisions of Section 40A(2)(b) of the Act and has disallowed the interest to the related parties at the rate of 3% per annum, and made disallowance at Rs.1,55,297/-. We find that in order to invoke provision of section 40A(2)(b) of the Act, it has to be shown that the payment was excessive or unreasonable having regard to the fair market rate prevailing in the market. The assessee itself has paid interest to outsiders at the rate ranging from 12 to 18% and no reason has been assigned by the CIT(A) while upholding the fair market rate of interest at 15% during the period. In our considered view, the rate of inte....
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....nbsp; "2. The ld.CIT(A) erred on facts and in law in confirming disallowance of Rs.2,01,513/- on account of bad debts without appreciating submissions and explanations of the appellant." 12. Both the parties before us submitted that the issue in this case regarding allowance of bad debts is similar with the issue in the ground no.2 of the assessee's appeal of earlier assessment year 2001- 2002 in IT(SS)A.No.233/Ahd/2010. 13. We have considered rival submissions. In view of our decision while disposing of the ground no.2 of earlier assessment year 2001- 2002 in IT(SS)A.No.233/ahd/2010, the issue of allowance of bad debt is decided in favour of the assessee and the ground no.2 of the assessee's appeal is allowed. 14. In the result, IT(SS)A.No.234/Ahd/2010 is allowed. IT(SS)A.No.235/Ahd/2010 (Asstt.Year : 2003-2004) "1. The ld.CIT(A) erred on facts and in law in confirming disallowance of interest u/s.27,253/- u/s.40A(2)(b) of the Act." 15. Both the parties before us has submitted that the issue of disallowance of interest u/s.40A(2)(b) of the Act is identical with the issue in the assessee's appeal for the asstt.year 2001-2002 in IT(SS)A No.233/Ah....
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....e Mistri was employee of the assessee-firm and the assessee was given specific opportunity in this regard by the AO during the course of assessment proceedings. The assessee could not prove with evidence that the amount pertained to the later assessment year 2007-2008. Shri Ram Dulare Mistri has signed voucher of the assessee-firm on revenue stamp. The preponderance of probabilities are in favour of the Revenue. In these facts of the case, we confirm the order of the CIT(A) in making the addition of Rs.55,000/- in the hands of the assessee and the ground no.2 of the assessee's appeal is dismissed. 20. The ground no.3 of the assessee's appeal reads as under: "2. The ld.CIT(A) erred on facts and in law in confirming disallowance of Rs.10,83,745/- on account of bad debts without appreciating submissions and explanations of the appellant." 21. Both the parties before us submitted that the issue in this case regarding allowance of bad debts is similar with the issue in the ground no.2 of the assessee's appeal of earlier assessment year 2001- 2002 in IT(SS)A.No.233/Ahd/2010. 22. We have considered rival submissions. In view of our decision while disposing o....
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....of the claim of the assessee for allowance of the depreciation, decide the issue in favour of the assessee and allow the ground no.1 of the assessee's appeal. 26. The ground no.2 of the assessee's appeal reads as under: "2. The ld.CIT(A) erred on facts and in law in confirming disallowance of Rs.1,03,890/- on account of bad debts without appreciating submissions and explanations of the appellant." 27. Both the parties before us submitted that the issue in this case regarding allowance of bad debts is similar with the issue in the ground no.2 of the assessee's appeal of earlier assessment year 2001- 2002 in IT(SS)A.No.233/Ahd/2010. 28. We have considered rival submissions. In view of our decision while disposing of the ground no.2 of earlier assessment year 2001- 2002 in IT(SS)A.No.233/Ahd/2010, the issue of allowance of bad debt is decided in favour of the assessee and the ground no.2 of the assessee's appeal is allowed. 29. In the result, IT(SS)A.No.236/Ahd/2010 is allowed. IT(SS)A.No.237/Ahd/2010 (Asstt.Year : 2005-2006) 30. The only ground in this appeal of the assessee is as under: "1. The ld.CIT(A) erred on facts an....
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....he assessee's appeal reads as under: "3. The ld.CIT(A) erred on facts and in law in confirming action of the AO in disallowing deduction claimed u/s.40(a)(ia) on payment basis amounting to Rs.5,13,093/- without appreciating that the said amount was disallowed in computation of income for AY 2005-06 due to delay in making payment of TDS. Alternatively, the ld.CIT(A) ought to have allowed deduction of this amount in A.Y.2005-06 due to retrospective amendment in the Act itself." 40. The learned counsel for the assessee submitted that the payment in question was covered by the provisions of section 40(a)(ia) of the Act and were accordingly disallowed in the earlier assessment year 2005-2006, and therefore, the claim is allowable on payment basis in the relevant assessment year 2006-2007. He submitted that the ratio of the decision of the Mumbai Tribunal in the case of DCIT Vs. Eversmile Constructions Co. P. Ltd., 143 TTJ 322 (Mum) applies to this proposition also. The learned counsel for the assessee has filed statement of computation of income of earlier assessment year 2005- 2006 at page no.383 of the compilation before us to establish that amount of Rs.5,13,....
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....better than the earlier years. There is a force in the learned counsel for the assessee that no actual weighment was done and it was only way of ad hoc measurement of quantity of stock on the date of search. We find that the difference in the value of stock at Rs.63,274/- is only marginal, and therefore no case of addition could be made out by the department on this issue, and accordingly the addition made is deleted and the ground no.1 of the assessee's appeal is allowed. 46. The ground no.2 of the assessee's appeal reads as under: "2. The ld.CIT9A) erred on facts and in law in confirming addition of Rs.22,95,264/- on account of noting found in loose paper diary in the course of search." 47. The learned counsel for the assessee submitted that no addition on account of loose paper/diary found at the time of search, should have been made by the department. The only figure of Rs.17.25 lakhs as "tuvar dal" and Rs.5.69 lakhs as "churi dal" has been mentioned in the diary without any narration or any details to whom these were sold etc. are mentioned therein. He submitted that a detailed explanation in this regard has been filed by the assessee, a copy of whi....