TaxTMI 
TaxTMI 
2023 (1) TMI 162
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.... Rs.24,69,380/-. The same was processed by the CPC u/s. 143(1) on 01.10.2019 determining the total income at Rs.28,85,060/-. Subsequently, the case was selected for scrutiny under CASS and statutory notices u/s. 143(2) and 142(1) were issued to the assessee. The assessee filed the requisite details from time to time and thereafter the AO completed the assessment determining the total income at Rs.56,20,370/- wherein he made addition of Rs.5,97,633/- towards Duty Draw Back received and Rs.21,37,677/- by disallowed the interest expenses. 3. So far as the disallowance of interest expenses is concerned, which is the issue before us, the AO noted that assessee has advanced an amount of Rs.3,19,92,978/- to M/s. Musadilal Holdings Pvt.Ltd. Howeve....
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....ier year and the present year being mere receipt of such outstanding. In view of the same, the ground no.1 is partly allowed subject to the directions given. With regard to addition on account of interest expenses, the appellant stated that the loan was advanced to M/s Musaddilal Holding Pvt Ltd for furtherance of business and that no disallowance can be made when there is no exempt income. The case laws relied upon by the appellant arc on different facts and circumstances and thus cannot be applied to the appellant's present case. It is to be noted that the appellant did not establish the business exigency for giving loan but merely making a statement in this regard. Further, the appellant did not establish that the loans were gi....
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....ggrieved with such order of the ld.CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds 1. The CIT (Appeals) has wrongly upheld the addition made by the learned assessing officer, i.e., disallowing interest paid on loans amounting to Rs.21,37,677 /- (calculated @ 12% p.a.) and added the same to the returned income. 2. The learned assessing officer has contended that a show cause notice was issued to the assessee on 10.05.2021 for which the assessee has not filed any reply. The CIT (Appeals) has wrongly upheld the contention of the learned assessing officer. 3. Neither the CIT (Appeals) nor the learned assessing officer has provided the opportunity to present the case u/s 36(1)(iii) which is in viola....
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....of Rs.21,37,677/- on the ground that assessee did not respond to the query raised by him as to why the proportionate interest income on advance of Rs.3,19,92,978/- to M/s. Musaddilal Holdings Pvt.Ltd. has not been offered to tax. We find the ld.CIT(A) partly sustained the action of the AO, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the ld.counsel for the assessee that when he has filed the requisite details before the completion of the assessment on 28.05.2021 and the assessment order was passed on 27.05.2021, therefore, the observation of the AO that assessee has not filed the requisite details is incorrect and the ld.CIT(A) also is incorrect in stating that the assessee has not fi....