2013 (12) TMI 1684

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....arned CIT(A) has erred in confirming the disallowance of Rs. 1430681/- made by the learned A.O. on account of difference in rate of interest in lending and borrowing of loans. 2. Learned CIT(A) has erred in confirming the above disallowance of Rs. 1430681/- made by the A.O. u/s.40A(2)(b) although the A.O. has not proved that the rate of interest of 15% is higher than the market rate of interest prevailing in the business community at the relevant time. 3. Learned CIT(A) has erred in not appreciating the fact that the receipt of interest by lending to the secured borrowers is receipt analogues to sales in the case of the assessee and Sec.40A(2)(b) cannot be pressed into service for disallowing short realization of sale pric....

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....ppellant craves leave to add, amend, alter, edit, delete modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 08/12/2008, thereby the Assessing Officer(AO) made addition of Rs. 14,30,681/- on account of difference in rate of interest in lending and borrowing of loans by invoking the provisions of section 40A(2)(b) of the Act. The assessee feeling aggrieved by the order of the AO and preferred an appeal before the ld.CIT(A), who rejected the submissions of the assessee by fol....

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....the Hon'ble ITAT-Ahmedabad, vide order dated 18/09/2009, against the assessee. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well the judgement relied upon by the ld.counsel for the assessee. We find that in AY 2005-06 this issue has been decided by the Coordinate Bench (ITATAhmedabad) against the assessee on identical facts, but the assessee was not able to prove that recipients of the interest were also paying tax at maximum marginal rate, however in the instant case, the ld.counsel for the assessee has submitted the details at page No.37 of the paper-book which shows that the recipients of the interest were also paying maximum marginal rate of t....