TaxTMI 
TaxTMI 
2016 (2) TMI 1394
X X X X Extracts X X X X
X X X X Extracts X X X X
....irst issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO making addition of interest waived before accrual amounting to Rs.99,12,892/-. 3. Briefly stated facts are that the assessee is engaged in the business of granting of loans and advances, investment in shares and securities. The AO during the course of assessment proceedings noted from the Balance Sheet that the assessee has invested approximately Rs. 11 cr. in granting of loans only to three parties namely, Avis Tie up Pvt. Ltd. amounting to Rs.1,38,68,079/- and Saurabh Saraf amounting to Rs.21,20,000/- and to SSD Securities Pvt. Ltd. amounting to Rs.23,06,06,987/-. But according to AO, no interest was charged from SSD Securities Pvt. Ltd. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... FYs 2007-08, 2008-09 and 2009-10 the assessee's position deteriorated in term of finances, he referred to the following figures: Financial Year Profit (Loss) before taxation 2007-08 Rs.23,76,92,156 2008-09 Rs.(1,24,24,909) 2009-10 Rs.3,90,36,554 It was explained that the profit of Rs.23.76 cr. in FY 2007-08 slipped to loss of Rs.1.24 cr. in FY 2008-09 i.e. the year under consideration and balance sheet was in red. According to Ld. Counsel, the granting of waiver of interest was not at all used as a device to reduce the income of the assessee but as a measure permissible to the businessman in term of commercial expediency. The Ld. Counsel for the assessee pleaded for commercial expediency and he relied on the decision of Hon'ble Ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rely upon such waiver and there was no justification of adding the amount as deemed interest accrued in favour of the assessee. In our opinion, it was the duty of the Tribunal to answer the said question in accordance with law of the land. In this case, the Tribunal accepted the position of law that such waiver was permissible according to the decision of the Supreme Court and further accepted the finding of the Commissioner of Income-tax (Appeals) that sufficient cause was shown by the assessee for non-production of the agreement before the Assessing Officer. 10. We, therefore, find that having regard to the position of law laid down by the Supreme Court in the case of CIT v. Shiv Prakash Janak Raj and Co. P. Ltd. [1996] 222 ITR 583 (SC....