2025 (1) TMI 184

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....on facts in confirming the action of the Ld. AO without going on the merit of the case by confirming the addition of Rs. 16,83,705/- towards LC discounting charges. Hon'ble CIT(A) has not considered the fact that the said LC discounting charges were incurred during the year for the course of business whereas the loans and advances were not provided during the assessment year under consideration. 2. The Hon'ble CIT(A) has confirmed the addition of Rs. 16,83,705/- and disallowed the said amount asserting that the appellant had advanced interest free loan to particular party and at the same time charged the "LC discounting charges" debited under the head Finance cost in the profit and loss account of the appellant thereby invoking the provis....

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....rves to be quashed." 3. The assessee company was engaged in the business of local trading of various products such as Cotton Coated Fabric, Dolphine Plain, Basmati Rice Synthetic Thickener and Sulphur etc. The assessee filed its return of income on 29.10.2017 declaring income of Rs. Nil and current year loss of Rs. 2,14,691/-. The assessment was completed at the total income of Rs. 15,47,014/- after making addition of Rs. 17,61,705/- being disallowance under Section 36(1)(iii) being interest bearing funds used for giving huge interest free loans. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. A.R. submitted that the Assessing Officer made....

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.... material and there is no basis of such interest free advances when trade payable of Rs. 47,60,31,130/- is pending and interest bearing fund is utilized to pay the creditors. Thus, the Ld. D.R. submitted that the Assessing Officer as well as the CIT(A) has rightly disallowed the claim under Section 36(1)(iii) of the Act. 7. The Ld. A.R. further submitted that there is a delay of 224 days in filing the present appeal due to the medical exigencies of the assessee's wife during the period and the assessee was not able to approach the concerned C.A. within the statutory time for filing the appeal before the Tribunal. Therefore, the Ld. A.R. prayed that the delay may be condoned. 8. Heard both the parties and perused all the relevant material ....