2020 (2) TMI 67

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....facts and circumstances of the case the learned CIT (A) has erred in confirming the action of the learned AO in passing the order u/s 143(3)/147 of the Income Tax Act, 1961. 2) Under the facts and circumstances of the case the learned CIT (A) has erred in confirming the disallowance of Rs. 5,58,285/- on account of interest claimed by the assessee u/s 24(b) of the Income Tax Act, 1961 where there is no interest free advances to the directors during the year. 3) The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." Ground No. 1 is regarding challenging the reassessment order passed under section 147 of the IT Act. 2. The ld. A/R of the assessee has not pressed ground n....

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....of the AO before the ld. CIT (A) and submitted that the cost of acquisition of the property in question was Rs. 1,82,89,238/- whereas the loan taken from the ICICI Bank was only Rs. 1,58,12,096/-. The entire loan amount was utilized by the assessee for repayment of the interest free advance taken from the Directors at the time of purchase of the property in question. Therefore, the said loan taken by the assessee from ICICI Bank was finally utilized for repayment of the loan taken from the Directors for the purpose of acquiring the property in question. Hence the assessee contended before the ld. CIT (A) that once the loan taken from the bank for repayment of the earlier loan taken for acquisition of the property in question, the interest o....

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....s excess payment was made which was again received back and utilized for repayment of the loan amount of the other Directors. Thus the ld. A/R has submitted that when these accounts were settled before the end of the financial year 2008, then the interest cannot be disallowed for the years under consideration once the loan taken from the bank was finally utilized for repayment of the interest free loan taken from the Directors for acquisition of the property in question. He has referred to the ledger account of the individual Director showing the details of the advance taken by the assessee and repayment of the loan and submitted that as on 31st March 2008 there was no excess payment to any of the Directors. Therefore, the disallowance made....

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....rs but in some cases the payment was short and in some cases it was more than the advance amount. The AO has taken the details of the repayment made by the assessee as on the table at page 3 of his order as under :- Name Loan amount Repayment of loan Excess payment Smt. Raj Kumari Agarwal 30,00,000 53,50,000 23,50,000 Shri Jugal Kishore 1,03,00,000 52,20,000 - Smt. Jai Mala Agarwal 45,00,000 65,80,000 20,80,000 Total 1,78,00,000 1,71,50,000 44,30,000 We find that the loan amount against Smt. Raj Kumari Agarwal is incorrectly shown at Rs. 30,00,000/- as against Rs. 53,50,000/-. This fact is verified from the relevant ledger account and we find that the loan amount was Rs. 53,50,000/- and the repayment was also of equal a....