2021 (12) TMI 642

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the order of CIT(A) upholding the addition of Rs. 11,80,119/- as made by the AO u/s 36(1)(iii) of the Act towards interest on loans to subsidiary and second is whether there was mistake apparent from records and assesse could take recourse of provisions of section 154 of the Act for rectification thereof. 3. The facts in brief are that the AO, during the course of assessment proceedings, noted that assesse has advanced interest free loan to subsidiary company amounting to Rs. 1,36,23,329/- whereas on the other hand it has borrowed interest bearing funds and paid interest of Rs. 11,80,119/- during the year. Accordingly the AO issued show cause notice to the assesse as to why the proportionate interest on the loan to subsidiary should not ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d the appeal of the assesse. 5. After hearing both sides and perusing the material on records, we note that the rectification application u/s 154 of the Act has been filed by the assesse seeking rectification of mistake which has occurred while calculating the interest on loan to subsidiary. We note that there were transfer of funds from both sides i.e. from the assesse to the subsidiary and from the subsidiary to the assesse however at the financial year end, net payable to the assesse was Rs. 1,36,23,329/-.We have also examined the overall calculation of interest and find that if the cross transactions are taken into consideration for the whole year, then instead of interest receivable, there comes out to be interest payable by the ass....