2014 (1) TMI 1314

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....or consideration is disallowance of Rs.11,00,240 with regard to payment of commission / brokerage. The ld.senior counsel submitted that during the course of its business, the assessee paid brokerage to those people, who brought customers. According to the ld.senior counsel, this payment is in the nature of sales promotion expenditure. According to the ld.senior counsel, the payment made by the assessee has a nexus with the sale of vehicle and it is for canvassing the customers to go to the assessee for purchasing vehicle. Therefore, according to the ld.senior counsel, the disallowance made by the assessing officer is not justified. 3. On the contrary, Smt. S Vijayaprabha, the ld.DR submitted that the assessee specifically claims that it ....

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....at the payments were made towards advertisement, consultancy and audit fees. When the payments were made for advertisement, consultancy and audit fees, this Tribunal is of the considered opinion that tax has to be deducted. Therefore, we hold that the CIT(A) has rightly confirmed the disallowance u/s 40(a)(ia) made by the assessing officer. Hence, we do not find any infirmity in the order of the lower authority. 7. The next ground of appeal is with regard to addition of Rs. 7,48,350. The ld.senior counsel submitted that the assessing officer made addition of Rs. 9,51,163 under the head 'capital gain'. In fact, no transfer of property took place. According to the ld.senior counsel, on revaluation of the assets, the value of block of asset....

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....l reconsider the issue in the light of provisions of section 2(47) and thereafter decide the issue afresh in accordance with law after giving opportunity of hearing to the assessee. 10. The next ground of appeal is with regard to disallowance of interest. According to the ld.senior counsel, in the audit report filed u/s 44AB of the Act in form 3CB, the Chartered Accountant certified that the assessee has paid interest of Rs.1,55,77,138. The assessing officer found that only payment of Rs.1,18,41,287 was backed by documentary proof. In respect of Rs. 37,35,512 the payments were not supported by any documentary evidence. According to the ld.senior counsel, this Rs.37,35,512 includes penal interest paid to the extent of Rs. 2,33,306. Accord....

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....nature for use and enjoyment of the money belonging to the bank, therefore, it is not for infraction of law. At the best, we may say that this payment of interest is for breach of contractual agreement with regard to the time schedule for repayment of the loan. Therefore, when the assessee claims that the money was paid to the bank, there is no question of any disallowance as if it is a penalty. There is no penalty for payment of penal interest on the delayed repayment of the borrowed funds. Therefore, this Tribunal is of the considered opinion that the genuineness of the payment has to be examined by the assessing officer. Accordingly, the orders of lower authorities are set aide and the issue is remitted back to the file of the assessing ....