2021 (3) TMI 19

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.... section 68 of the Income-tax Act, 1961. 4. Briefly the facts are, in course of assessment proceedings, the Assessing Officer (AO), on examining the balance-sheet of the assessee noticed that the assessee has shown an amount of Rs. 5,86.20,000/- due to M/s New India Roadways under the head 'current liability'. As observed by the AO to verify the correctness of the liability shown, the AO issued notices u/s 133(6) of the Act to M/s New India Roadways. As observed by the AO, in response to the said notice, the concerned party by letter dated 06-12-2013 furnished a copy of ledger account, the closing balance of liability due from the assessee was shown at Rs. 5,66,20,000/-. Noticing this, the AO called upon the assessee to explain the differe....

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....ional evidence and requested for admitting them. Thus, he submitted, as the assessee has established the identity and creditworthiness of the creditor as well as the genuineness of the transaction, the addition cannot be made under section 68 of the Act. 6. The learned Departmental Representative submitted, neither before the AO nor before the first appellate authority, the assessee could properly explain the source of the outstanding liability of Rs. 20 lakh appearing in the books. She submitted, from the information received from the creditor the difference of Rs. 20 lakh was clearly revealed. Therefore, the assessee having failed to reconcile the difference properly, addition was made under section 68 of the Act. She submitted, the asse....

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.... information from the website of the MCGM by way of additional evidence to emphasize that Rs. 20 lakh which is the subject matter in dispute is, in reality, the earnest money deposit with MCGM. I have noticed, before the first appellate authority the assessee had also submitted that the amount of Rs. 20 lakh shown as liability due to M/s New India Roadways is because of a clerical mistake. However, the first appellate authority has not given any credence to such statement of the assessee. 8. Be that as it may, in view of the submissions made before me by the learned Counsel for the assessee as well as the additional evidences now furnished which, in my view, have a crucial bearing in deciding the issue; hence, should be admitted, I am of t....

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....sioner (Appeals). 11. The learned Counsel for the assessee submitted, out of the temporary surplus working capital available, the assessee had advanced loan to the related party on short term basis and as a temporary advance. He submitted, it is not a fact that the loan was advanced without charging any interest, but the assessee had charged interest @9% p.a. He submitted, the temporary advance was given with the understanding that money would be returned immediately on call. Therefore, he submitted, interest was charged at 9% which is more than the prevailing rate of interest on bank FDRs. Further, he submitted, the assessee had sufficient interest free funds available to subsidize interest on the loan given. Therefore, he submitted, the ....