TaxTMI 
TaxTMI 
2023 (1) TMI 1087
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.... issued on 26.09.2016 and was duly complied with. The assessee company had filed the various details, particulars and documents as asked for during the course of assessment proceedings. The assessment in this case was completed at a total income of Rs.44,28,723/- U/s 143(3) vide order dated 23.11.2017, thereby making an addition of Rs.77,13,864/ to the declared income of the assessee. 2.1 The dispute hovers around the fact that during the year under consideration the assessee company advanced a sum of Rs. 6,00,00,000/- to M/s Parsvnath Developers Ltd. ( also refered here after as PDL) refundable by 24.09.2014. M/s Parsvnath Developers Ltd. Defaulted in payment of principal and interest paid by the agreed date i.e. 24.09.2014. The assessee company claims to have persuade hard for recovery of principal as well as interest and with great persuasion it was able to recover Rs.2,00,00,000/- by the end of the previous year. The assessee company further asked for payment of balance amount and interest due, but M/s Parsvnath Developers Ltd. agreed to pay principal only on the condition of waiver of interest due. In the month of April 2015 M/s Parsvnath Developers Ltd. paid a sum of Rs.3,80....
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....e been recognized on accrual basis and assessee is following the mercantile system of accounting in the previous year and observing that the assessee has shown interest income of Rs. 8,57,096/- and also claimed TDS of 8,57,096/- thus, he assumed that the interest income that has accrued should be 85,70,960/- and accordingly added the balance 77,13,864/- to the income of assessee. 4. The Ld. CIT(A) has sustained the same and adding further that "6.4 I have considered the balance sheet and financials of the appellant company. As on opening of the year under consideration, the appellant company did not have sufficient own capital to fund such inter corporate loan given to Parsvnath Developers Limited. Further, nowhere, the appellant before me or either before the AO furnished as to how advancing of loan to Parsvnath Developers Limited is pertaining to the business purpose of the appellant company or as to how there was any commercial expediency for such advance. In such a scenario, since the advance were given to Parsvnath Developers Limited out of loan funds, proportionate interest expense is being correctly disallowed and added back to the income of the appellant company. Thus, t....
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....of Learned Assessing Officer in making an addition of Rs.77,13,864/- without considering the fact that since the assessee has waived off the interest priorto finalization of its accounts and has rightly not considered it as its interest income on the basis of accounting standard prescribed by the Institute of Chartered Accountants of India and followed by the company. 2. That all the above grounds and sub-grounds have to be read conjunctively and also independent of each other. 3. That the above ground(s) of appeal are to be considered separately and without prejudice to one another. 4. That the appellant assessee craves, leaves to add, alter, amend, substitute, withdraw or forego any of the ground(s) of appeal before or at the time of hearing. 5. That the order of Learned CIT (A) is bad in law and wrong on facts of the case and is in violation of the principles of natural justice, as passed without providing reasonable opportunity to the appellant assessee to meet the merits of its case." 6. Heard and perused the record. 7. Ld. Counsel apprised the bench of the aforesaid facts and submitted that Ld. Tax authorities below have failed to appreciate that no real income....
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....st income cannot be attributed and only the actual interest received on that account, was liable to be shown in P& L account. As rightly done by the assessee company. 9. The response of borrower PDL was very crucial on notice u/s 133(6) where it categorically submit to the Ld. AO that ; "Also provide a copy of ledger account of our assessee till date. In this regard we would like to submit that M/s Parsvnath Developers Limited has debited interest of Rs 85,70,957/- in respect of inter corporate deposit taken from M/s Global Consultants & Designers Private Limited during the financial year 2014 - 15 on which tax deducted at source was Rs 8,57,096/- and the net interest payable was Rs. 77,13,861/-as on 31/03/2015. Further our company M/s Parsvanth Developers Limited has reversed the interest of Rs. 77,13,861/- in next financial year i..e. 2015 - 16 and repaid the principal amount. The balance of M/s. Global Consultants & Designers Private Limited in the books of accounts of our company M/s. Parsvnath Developers Limited as on 31/03/2016 is Rs. Nil. Copy of Ledger Account of M/s. Global Consultants & Designers' Private Limited in the books of M/s. Parsvnath Developers Limited ....