TaxTMI 
TaxTMI 
2020 (1) TMI 215
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.... CIT(A) has erred in law as well as on facts by upholding the addition of Rs. 24,44,658/- u/s 14A of the I.T. Act,1961 5. That the Ld CIT(A) has erred in law as well as on facts by upholding the notional addition of Rs. 1,05,000/- on account of dividend from investment in a private unlisted company. 6. That the Ld. CIT(A) has erred in law as well as on facts by not adjudicating on the matter involving the addition of Rs. 63,787/-on account of disallowance of expenses. 7. That the Ld. AO has erred in law as well as on facts by imposing penalty u/s 271(l)(c) of the IT Act,1961. 8. As the above additions are bad in facts and law are baseless, hence the interest charged u/s 234A,234B, 234C and 234D may also be deleted." 2. At the outset, ground no. 5 has not been pressed. Accordingly, the same is dismissed as not pressed. 3. Ground No.1, 7 and 9 are general in nature and ground no.8 is consequential, therefore, no separate adjudication is required. 4. The brief facts qua the issue of addition of Rs. 75 lacs made u/s.68 are that Assessing Officer noted that assessee had shown credit of unsecured loan amounting to Rs. 75 lacs from M/s. High....
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....btor in the books of the assessee in the relevant previous year. The said amount received has yet not been adjusted against the debt and disclosed as unsecured loan in the name of M/s. High Ground Enterprises. because, the final verdict at that time was still pending from the Hon'ble High Court and permission to pass a Journal Voucher was yet to be granted. The judgment of the Hon'ble High Court is now available which clearly proves and support the contention and explanation of the assessee. Thus, such an amount could not have been added in the hands of the assessee-company. 7. On the other hand, ld. DR strongly relied upon the order of the Assessing Officer and submitted that onus has not been discharged by the assessee before the Assessing Officer and even confirmation was not furnished. Thus, the addition made by the Assessing Officer should be sustained. 8. After considering the rival submissions and on perusal of the relevant material placed on record, it is seen that the assessee had credited an amount of Rs. 75 lac in its books of account in the name of M/s. High Ground Enterprises Ltd. The said amount has been received on account of certain dispute with M/s. Rama K....
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....e addition of Rs. 21,04,667/- made u/s.40(a)(ia), the brief facts are that, assessee has paid freight charges amounting to Rs. 21,04,667/- which were debited to the Profit & Loss account. The said amount has been paid to the following parties: a. M/s. Sai Dutta Shipping Agency Rs. 9,34,,472/- b. M/s. Deft Shipping Agency Rs. 57,433/- c. M/s. Reliable Transport of India Rs. 6,55,015/- d. M/s. Godara Freight Carriers Rs. 4,57,747/- Total Rs. 21,04,667/- AO further noted that the assessee has not deducted TDS at the applicable rate as per provision of Section 194C, therefore, he made the disallowance u/s.40(a)(ia). The said addition has also been confirmed by the Ld. CIT(A). 10. Before us, ld. counsel had submitted that though assessee has not deducted TDS on the freight payments to the four parties, but these parties were regular assessed to tax. In support, copy of income tax return for the Assessment Year 2012-13 of the three parties namely, M/s. Sai Dutta Shipping Agency; M/s. Reliable Transport of India and M/s. Godara Freight Carriers was filed, which shows that these parties have declared these amounts in the return of i....
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....or computing the income and have paid taxes thereon. The assessee will co-operate before the AO to furnish the requisite document and certificate from the payees to the Assessing Officer to substantiate this contention. 13. Lastly, with regard to the addition of Rs. 25,49,658/- u/s.14A, we find that Assessing Officer has made the addition on account of interest and bank charges. Before the Assessing Officer, assessee's case was that the assessee has given trade advance to sister concern and no interest has been charged from the such loan. Moreover, these advances have been given out of interest free funds and nothing has been diverted to the sister concern out of borrowed funds. However, from the assessment order, it is seen that the ld. Assessing Officer has observed that funds over drawn by the payee were never utilized for the purpose of business and has tried to make the disallowance u/s.14A without any giving any reasoning or basis. There is no whisper as to why the provision of Section 14A is attracted on addition of Rs. 25,49,658/- for disallowance of interest in bank charges, when there is no exempt income earned by the assessee during the year. The fact of the matter is....