2015 (8) TMI 315

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....round the additions/disallowances on the following issues:-     A.Y 1997-98   A.Y 1998-99 a) Interest income Rs.2,74,315 Interest income Rs.5,25,000 b) Interest income Rs.1,50,000 (Rs.3,75000+Rs.1,50,000)   c) Depreciation Rs. 2,0321 Depreciation Rs. 18,992       Travelling & Conveyance Rs. 15,476     Rs.4,44,636   Rs.5,89,468   3. With the assistance of the ld. Representative, we have gone through the record carefully. It emerges out from the record that this is the second ground of litigation upto the Tribunal. The tribunal in the first round has set aside the issue to the file of the of th....

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....t arrived at a conclusion that the company was in existence upto assessment year 2003-04. The assessee has been recognizing the loans to this company in its books of account. Therefore, it ought to have shown interest income on such advances. Accordingly, the AO has made an addition of Rs. 1,50,000/- to the income of the assessee for both the assessment years under consideration. 5. The AO has also made additions of Rs. 2,74,315/- and 3,75,000/- for both the assessment years under consdieration. This represents to the accrual of interest on the money advanced to M/s. Khaitan Hostombe Spinels Ltd. The assessee has contended that this company has also stopped making the payment of interest. The probability to recover of the principal amoun....

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....esulted to the assessee. In the light of this decision, if we examine the facts of the present case, then it would reveal that as far as loan given to M/s. S.S Industries Ltd are concern, these were given in the year 1990. The debtor has paid interest upto 1992, but thereafter stopped payment. The assessee has not recognized interest income from assessment year 1997-98, by that time more than three years have already been expired. Thus, alleged interest income cannot be assumed and deserves to be deleted in view of the said decision of the Hon'ble Supreme Court in the case of State Bank of Travancore (supra). 7. As far as loan given to M/s. Khaitan Hostombe Spinels Ltd is concern, this loan was given on 08-07-1996. It is also in the same....