TaxTMI 
TaxTMI 
2021 (7) TMI 105
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..... 2. The assessee has raised the following substantive grounds in the instant appeal: "1. The order of the Ld. CIT (A) is erroneous both on facts and in law to prejudicial to the interests of the appellant. 2. The Ld.CIT(A) ought to have allowed the appeal in full. 3.The Ld.CIT(A) erred in upholding the disallowance of Rs. 94,28,655/-. 4.The Ld.CIT(A) grossly erred in observing that no due deligence report and acquisition details in which financial impact is entailed, has been submitted by the appellant in respect of the interest liability of Rs. 94,28,655/-. 5.The Ld.CIT(A) grossly erred in ignoring the fact that the scheme of amalgamation of M/s.Everbig Properties & Finvest Private Ltd and t....
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....5.Ground 1: Disallowance u/s.37(1) of Rs. 94,28,655/- towards the Interest payment to M/s.Gajmukh Investments Private Limited: 5.1 During the course of assessment proceedings, the Assessing officer noticed that the assessee has claimed expenditure of Rs. 94,28,655/- on account of interest paid to M/s.Gajmukh Investments Private Limited. However, it was found that the total outstanding advance from Gajmukh in the books of assessee company (post merger) was only Rs. 55lakhs. Thus, the interest claimed is incommensurate to the principal amount on which the interest has been claimed to have been paid. Thus, the assessee was asked to provide the detailed working of such interest charged to P & L statement. In response, the assessee stat....
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....terest will accrue yearly. Thus it should have charged interest to its Profit and Loss Account, as and when it accrued i.e. on yearly basis. Charging of the interest in one go ln the current year has been done(just to bring down its taxable profits. e) Even if the contention of the assessee is accepted for once, the contract entered into with M/s. Gajmukh Investment is contingent to the sale of property. Thus, the interest is attached directly to the property in question. In such circumstances, it is important to see whether such property is generating any income from business or not. It is seen from the records, that income from sale of this property has not been accounted for a business income, but as long term capital g....
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....pay the above, loan amount to M/s,Gajmukh Investments Pvt Ltd accordingly an understanding was reached between them to repay along with interest at 18% p.a from the date of borrowinq. As per the understanding, interest from 2004- 05 became due on 2012-13 only. Total interest worked out to be Rs. 94,24,577/-. Accordingly the loan alonq with the interest was repaid in the accounting year 2012-13 for an total amount of Rs. 1,39,57,119/- which is inclusive of principal and Interest after the TDS, It is submitted that on the above interest payment TDS was made and paid @10% to Income tax Department for Rs. 9,42,458/- via challan no 26078 dated 11.07.2012 of ICICI Bank, Uttam Nagar Branch, New Delhi. Therefore it is very clear that assessee has p....
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....2013. 5.3 The submissions of the appellant has been considered carefully. The appellant submitted that they have paid Rs. 94,24,577/- to M/s. Gajmukh Investments pvt Ltd on behalf of the M/s. Everbig Properties & Finvest pvt. Ltd. This was a liability which was inherited by the appellant company after the merge. However, no 'due diligence report' and which financial impact 15 entailed, has been submitted by the appellant. This casts doubt regarding 'the liabiiity' of the appellant after the merger. No evidence has been brought before me to show that this amount stands payable. No bank account has been given by the appellant where they have paid the said amount to Mis. Gajmukh Investments Pvt Ltd, Secondly, in t....
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....ompany, M/s.Everbig Properties & Finvest Private Ltd.," who infact had borrowed the principle amount of Rs. 54.75 Lakhs in FY.2004-05 and 2006-07 i.e. well before merger. We further notice that the assessee has also filed a petition dt.26-12-2020 inte alia placing on record audited financial statements of M/s.Gajmukh Investments Pvt. Ltd., (FY.2012-13) Form-26AS of M/s.Gajmukh Investments Pvt. Ltd., for the AY.2013-14 and detailed copy of the amalgamation scheme; respectively. Faced with this situation, we deem it appropriate to express our agreement with the Revenue's stand qua the foregoing additional expenditure that all these documents require the Assessing Officer's necessary factual verification. We therefore restore the instant....