TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1811
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....orities in this behalf is without any materials and are contrary to the facts of the case and are arbitrary, unreasonable, erroneous and perverse. 02. For that the ld. CIT(A) erred in not adjudicating the assessee's ground against the charging of interest u/s 234B. 03 For that the ld. CIT(A) erred in not adjudicating the assessee's grounds against the initiation of penalty proceedings u/s 271(1)(c). 04. For that the order appealed against is otherwise erroneous on facts and/or in law. The assessee craves leave to add, alter, modify or amend any of the grounds taken hereinbefore, before or at the time of hearing of the appeal." 3. The grievances raised by the Revenue are as follows: "1) Ground No.1:That, on the facts and in circumstances of the case and in law, the ld. CIT(A) erred in deleting the disallowance of proportionate interest on borrowed loans given as interest-free loans to other parties without having regard to the fact that the assessee company could not establish 'commercial expediency' in advancing such interestfree loans and the Hon'ble Supreme Court had laid down in the case of S.A. Builders Limited vs. CIT (2007) 2....
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....ade without paying tax and so the same provision cannot be an allowable deduction. Hence, AO noted that book profit of the assessee company should be computed as per profit disclosed in the assessee`s audited profit and loss account. 6. Aggrieved by the stand so taken by the assessing officer, the assessee carried the matter in appeal before the ld CIT(A) who has confirmed the action of the assessing officer. Aggrieved, the assessee is in appeal before us. The ldDR for the Revenue reiterated the stand taken by the assessing officer, whereas ld counsel for the assessee relied on the submissions made before the authorities below. 7. We have given a careful consideration to the rival submissions and perused the material available on record we note that the summary of the provisions made by the assessee and the provision written back in the profit and loss account abundantly explains that assessee is entitled to reduce the profit by the bad debt of Rs. 3,65,64,894. It is not a provision, but it is a bad debts actually incurred by the assessee. The table showing the details of provisions made and the actual bad debts incurred is given below for ready reference: MERLIN RESOURCE....
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....ls and accounts of the assessee it was noted by the AO that assessee company advanced interest free friendly loans to the following parties: a) TCG Urban Infrastructure holding Rs. 3,06,93,068 b) Snifs securities limited Rs. 54,91,696 c) Elbee Securities Limited Rs. 7,88,49,484 d) Amalendu Chatterjee Rs. 10,00,000 e) Swapan Bhattacharya Rs. 5,00,000 Total: Rs. 11,65,34,248 The assessing officer therefore, worked out the proportionate interest payment on aforesaid interest free advances to the tune of Rs. 1,47,55,057/- and disallowed the same. 11. Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition. Aggrieved, the Revenue is in appeal before us. 12. The ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated for the sake of brevity. Whereas, ld Counsel relied on the submissions made before the authorities below: 13. We have given a careful consideration to the rival submissions and perused the material....
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....ded as bad and doubtful debt in earlier year. As regard, the amount of Rs. 7,88,49,484/- of Elbee Securities Limited, as per assessee, this loan was good up to 31.03.2003 and interest was charged up to that period. However, this loan has been treated as bad and doubtful in earlier years hence no interest has been charged thereafter. As regard the loan of Rs. 10,00,000/- to Amalendu Chatterjee and loan of Rs. 5,00,000/- to Swapan Bhattacharya and the ld. Counsel has submitted that these are the advance given for business purpose. We note that in the remand report the A.O has submitted that there was no necessity of giving friendly loan of Rs. 11,65,34,249/- but has not disputed the correctness of the submission of ld. AR in respect of loan to TCG Urban Infrastructure Holding Pvt. Ltd., Smifs Securities Limited &Elbee Securities Limited. Hence it is evident that the loan given to these parties was not interest free loan but due to change in circumstances the assessee has not charged interest on these loans in the previous year relevant to Assessment Year 2008-09. 14. We note that the Hon'ble Apex Court in the case of S.A Builders Ltd. v CIT [2007] 288 ITR 1, has a....
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....es not signify that debt became irrecoverable and should not be simply written off in Profit and Loss account. The primary onus lies on assessee to prove that the debt became irrecoverable and the debt liability and interest accrued liability was previously accepted by Debtor. The ld AO further noted that the assessee has not even brought on record that at the time of advancing of debt, it was carrying out money lending business activity. The sum not advanced in course of business is a capital loss. In absence of any evidence the claim of bad debts amounting to Rs. 3,80,00,000/- was disallowed and added back to the total income of the assessee. 18. Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition. Aggrieved, the Revenue is in appeal before us.The ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated for the sake of brevity.On the other hand, the ld. Counsel for the assessee defended the order passed by the ld. CIT(A). 19. We have given a careful consideration to the ....
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....e issue are that during the assessment proceedings, the AO noted that the assessee computed loss on sale of unquoted shares. The AO observed that assessee has not submitted the required documents and information such as quotation, book value/breakup value of shares, valuation report of valuation of unquoted shares, and the reason/explanation on how the value of unquoted shares drastically fell, copy of bills to whom the same were sold, purpose of sale of unquoted shares on which no dividend was received etc. The AO was of the view that the shares were sold and the money was given to parties for mere accommodation purposes and to book artificial loss in order to set-off other income. As per AO, the assessee made the following share transactions: 1. Galaxy Entertainment Corp Ltd:In the month of March 2006, the assessee did transactions in huge quantity viz: 239626 shares at cost of Rs. 7,52,88,729/-. The aforesaid shares were sold after expiry of one year at Rs. 2,42,62,132/- only. Thus, assessee claimed loss of Rs. 5,10,34,367/- and after indexation of cost claimed loss of Rs. 5,92,14,631/-. The AO also did not accept the short term capital loss to the tune of Rs. 46,56,611/-....