2018 (4) TMI 1660

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....account of disallowance of interest expenses. 2. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 32,88,441/- made on account of wooden material expenses. 3. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,91,375/- made on account of disallowance of solar water heating equipments. 3. Ground nos. 4 to 10 are extension of the grievances raised vide ground nos. 1, 2 & 3. 4. Representatives of both sides were heard at length. Case record carefully perused and with the assistance of the ld. counsel, we have carefully gone through the documentary evidences brought on record in the form of a paper book in the light of Rule 18(6) of the ITAT Rules. 5. Briefly stated the facts of the ....

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....ticed that the said expenditure was purchased of Solar Water Heating Equipments. The A.O. was of the opinion that the expenses on Bore Well, Tube Well has already been claimed separately by the assessee. The A.O. once again formed a belief that the said expenditure was incurred by the assessee beyond the scope of work allotted to it in the development agreement. The A.O. disallowed Rs. 2,91,375/-. 8. On further probe, the A.O. found that the assessee has debited interest expenses of Rs. 25,89,150/- on the loan facility availed from the Punjab National Bank. The A.O. noticed that the sale receipts were first received by Goyal & Co. and later on transferred to the assessee. The A.O. was of the opinion that once it was agreed with Goyal & Co.....

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....he A.O. It is equally true that nowhere the A.O. has mentioned that the expenditures were not related to the business of the assessee. It is also true that quantitative specification of works allotted to assessee has not been mentioned in the said agreement but at the same time, the A.O. has accepted the said agreement without questioning its legality or enforceability. We find that the sale consideration was first received by Goyal & Co. and thereafter after the gap of 4 to 6 days, the same was transferred to the account of the assessee. On such fact, it cannot be said that the assessee has deliberately passed on some favour to Goyal & Co. Therefore, it cannot be said that by doing so, the assessee has unnecessarily incurred interest expen....