TaxTMI 
TaxTMI 
2013 (11) TMI 961
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....). The AO noted that the assessee had made payment of interest of Rs. 42,34,061/- to four sister concners for delayed payment of consideration in respect of goods and services obtained from the sister concerns as per he details given below:- (i). DSV Chemicals Pvt. Ltd Rs. 24,25,511 (ii) Sathaye Inks & Rollers P Ltd Rs. 6,58,710 (iii) United Inks and Chemicals P Ltd Rs. 4,66,416 (iv) United Speciality Inks P Ltd. Rs. 6,83,427 Total Rs. 42,34,061 2.1 The assessee explained that the interest had been paid due to delay in payment of outstanding for the transactions made with these sister concerns. The AO however noted that the assessee had not paid any interest to any other parties other than sister concerns and, therefore, the expe....
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.... assessing officer. 2.4 We have perused the records and considered the matter carefully. The dispute is regarding disallowance of interest paid to sister concerns in respect of supplies made by them u/s 40A(2)(b) being excessive compared to market value. There is a clear finding of both AO and CIT(A) that outside parties had also supplied goods and services to assessee to whom no interest had been paid for delayed payments. Therefore, payments of interest to sister concerns is apparently excessive compared to market value. CIT(A) has however allowed relief on the ground that interest payment made have been inbuilt into the price charged by the sister concerns but we see no material to support the finding of CIT(A) that prices charged by th....
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....e books of the assessee. Since the assessee had filed some additional evidences. 3.1 CIT(A) forwarded the details to the AO for remand report. The AO in the remand report submitted that there was no loan given by the Better Value Leasing & Finance Co. Ltd. to the assessee. In reply the assessee submitted before CIT(A) that the report of AO was grossly erroneous as the assessee had furnished confirmation from the lending company as well as hire purchase agreement to show that there has been actual receipt of loan for hire purchase of machinery and payment of loan in installments to the lender. The transactions have been recorded both by the assessee and the lender in the books of accounts. The assessee had also furnished the bank statement ....
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.... books of accounts and as per bank as well as reconciliation had also been filed which was duly mentioned in reply dated 15.2.2012 before CIT(A) a copy of which was available at pages 75 to 80 of the paper book. The assessee had filed the confirmation from Better Value Leasing & Finance Co. Ltd. dated 18-10-2007 copy of which was available at page 68 of the paper book. The PAN No. of the said party had also been given before the AO, details of which are available at page 32 of the paper book. The assessee had, therefore, discharged the burden of proving the loan transactions by filing necessary details and evidence. The addition made was, therefore, not justified. The learned DR on the other hand placed reliance on the orders of assessing o....