TaxTMI 
TaxTMI 
2013 (7) TMI 517
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....that the provisions of section 145 A do not exempt such inclusion of VAT for any reason. 2. That the CIT(A) has erred in law and on facts in deleting the excessive interest of 6% amounting to Rs. 11.58 lacs out of interest paid by the assessee @ 18% even when the maximum prevalent bank rate for similar enterprises was 12%. On the fact and in the circumstances of the case and in law, the Id. CIT(A) ought to have upheld the order of the Assessing Officer to the extent mentioned above since the assessee has failed to disclose his true income/book profit. : The appellant prays that the order of the Id. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored to the above extent. The appellant craves, to leave....
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.... for the immediately succeeding A.Y.2009-10 on 23/12/2011, no such addition was made. Impugned addition is not sustainable. It is deleted. This grounds of appeal is allowed." 5. From the above order of Ld. CIT(A), we find that the relief was allowed by Ld. CIT(A) on this basis that no addition was made in respect of VAT in opening stock and no such addition was made by the A.O. in the assessment for assessment year 2009-10 which was also completed by the A.O. u/s 143(3) on 23.12.2011. In our considered opinion, this cannot be a valid basis to delete the addition made by the A.O. but the addition is not sustainable for a different reason. The case of the assessee is this that the assessee is maintaining VAT account separately and at the t....
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....es were related to the appellant. Similar disallowance made in the A.Y. 2004-05 in appellant's own case was deleted by the order dtd. 11/06/2007 in appeal No. CIT(A)-VI/Cir.2/l 75/2006-07. In the said order it was held as under:- "The appellant's claim that all the related persons are in higher tax bracket has to be given due consideration. It is a fact that even for taking a loan from bank, a person has to provide adequate security, strictly adhere to the time of repayment or pay penalty interest and other related charges. Compared to this, the loan from related and other related charges. Compared to this, the loan from related persons carries no security. On consideration of the facts of the case I am of the view that the market rate o....
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....en in the hands of the related parties. These submissions of the assessee before Ld. CIT(A) could not be controverted before us by Ld. D.R. This is an admitted position of the fact that when loan is taken from a bank or financial institution, security is required to be provided and when a person takes loan from any person without security, as in the present case, generally the rate of interest charged by the lender is higher because the lender is taking extra risk in such cases. In the present case, even out of 8 related parties, the assessee was able to obtain loan from two such persons @ 12% but from remaining 6 persons, the assessee had to pay interest @ 18% but in our considered opinion, in the facts of the present case, when he assesse....