TaxTMI 
TaxTMI 
2013 (7) TMI 356
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.....22,91,155/- u/s. 40(a)(ia) on the basis of additional evidences and explanation filed in the course of appeal." 3. We have heard rival submissions and gone through facts and circumstances of the case. We find that the AO during the course of assessment proceedings noted that the assessee has made payment of following expenses without deducting TDS: Names & addresses Bill raised TDS deducted Basuki Builders & transporters Rs. 5,49,814/- Nil Ma Tara Enterprise Rs. 52,570/- Nil Excel Movers Pvt. Ltd. Rs.10,08,082/- Nil Sri Bajrang Alloys Ltd. Rs. 53,000/- Nil Ajab Enterprise Rs. 6,27,689/- Nil Total Rs.22,91,155/- The assessee claimed that it had obtained non-deduction TDS certificate from the AO u/s. 197 of the Act but no evidence was filed before AO and hence, he disallowed the expenses at Rs.22,91,155/-. The assessee before CIT(A) filed certificate for non-deduction of TDS u/s. 194C(4) of the Act and CIT(A) deleted the disallowance by observing as under: "As regards M/s. Excel Movers Pvt. Ltd. the assessee has claimed that it had certificate for deducting tax at lower rate but it could not produce a copy of such a certificate befor....
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....er and in case, there is a certificate, AO will allow the claim of assessee. This ground of revenue's appeal is dismissed in terms of above. 5. The next issue in this appeal of assessee is against the order of CIT(A) deleting the interest on borrowed fund utilised for advancing interest free loans at Rs.54,08,070/-. For this, revenue has raised following two grounds: "2. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.54,08,070/- in respect of interest of borrowed fund utilized for advancing interest free loans without appreciating that the assessee had failed to explain the immediate source of interest free loans and advances. 3. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that no disallowance of interest can be made in respect of opening balance of interest free advance of Rs.3,28,54,782/- when no such disallowance was made in the past, without appreciating that each assessment year is separate and principle of resjudicata is not applicable to income tax assessment." 6. We have heard rival submissions and gone through facts and circ....
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....bove amount of Rs.3,28,54,782/- which as on 31.3.2004 and during the year was only Rs.1,65,66,940/-. In such circumstances, we are of the view that once assessee has interest free fund available with it, then the interest free advance given to associate concerns is clearly covered in favour of assessee and against revenue by the decision of Hon'ble Supreme Court in the case of Munjal Sales Corpn. v. CIT [2008] 298 ITR 298 (SC). We find that, in view of the above facts, that the issue is covered by the decision of Hon'ble Apex court in the Case of Munjal Sales Corpn. (supra), wherein Hon'ble Apex Court has considered the issue as under: "Application of the 1961 Act to the facts of this case. As stated above, in this batch of civil appeals we are concerned with the assessment years 1993-94, 1994-95, 1995-96, 1996-97 and 1997-98. At this stage, it may be mentioned that as far back as in August/September, 1991, the assessee herein had given interest-free advances to its sister concerns. These advances stood reduced over a period, till the assessment year 1997-98. Each year the balances stood reduced. Further, vide order dated January 3, 2003, the Tribunal he....
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....e, it was not entitled to claim deduction under section 36(1)(iii). This finding is erroneous. The opening balance as on April 1, 1994, was Rs. 1.91 crores whereas the loan given to the sister concern was a small amount of Rs. 5 lakhs. In our view, the profits earned by the assessee during the relevant year were sufficient to cover the impugned loan of Rs. 5 lakhs." We also find that as held by Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd. [2009] 313 ITR 340, the presumption has to be that the interest free advances are given out of the interest free funds available to the assessee. It is also covered in favour of the assessee by the decision Hon'ble Bombay High Court's observations, in the case of Reliance Utilities & Power Ltd. (supra), as follows: "If there be interest-free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available." Respectfully following the decision of Hon'ble Supreme Court in the Case of Munjal Sales Corpn., (supra) and the decision of Hon'ble Bombay High Court in the ....
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....erefore, it can be believed that these visits were related to explore technical developments in these fields through Visits to trade fairs, conferences etc. Therefore, these expenses appear to be made for business purposes and should be allowed. The disallowance made by the A.O. in this regard is deleted." Aggrieved, now revenue is in appeal before us. 10. We find that the assessee company is dealing in a number of engineering and technical activities and projects. Further, directors have undertaken foreign tour to attend trade fair, conferences etc. in UK, Japan, Singapur, Taiwan etc. This finding is not controverted by Ld. CIT, DR at the time of hearing and he only relied on the assessment order. We find that deletion made by CIT(A) is quite reasonable and we uphold the same. This ground of appeal of revenue is also dismissed. 11. Now, we take up ITA No.247/K/2010, AY 2003-04. The only issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance of deduction u/s. 80IA of the Act on the basis of turnover as reported in TDS certificate and this certificate is issued by Govt. Department. Revenue has raised following ground no.1: "That on ....