TaxTMI 
TaxTMI 
2025 (11) TMI 560
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....fter the income tax matters, was suffering from severe neck pain radiating to both upper limbs and other related health complications. The doctor had advised him complete rest for about one and a half months, due to which the necessary steps for filing the appeal could not be taken within the prescribed period of limitation. It was further submitted that the medical certificate and supporting evidence in this regard have been filed along with the condonation petition. The Ld. AR thus contended that the delay was neither deliberate nor intentional, but occurred due to bona fide reasons beyond the control of the assessee. He, therefore, prayed that the delay may kindly be condoned and the appeal admitted for adjudication on merits. 3. Per contra, the Learned Departmental Representative ("Ld. DR") did not raise any serious objection to the request for condonation of delay. 4. We have considered the rival submissions and perused the material on record. In the present case, the reason for delay has been duly explained by the assessee, supported by medical evidence. We find that the delay was caused due to unavoidable medical reasons and not due to any deliberate inaction or neglig....
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....income of the assessee at Rs. 1,20,69,930/ -. 7. Aggrieved by the said assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), invoking powers under the proviso to section 251(1)(a) of the Act, set aside the entire assessment to the file of the Ld. AO with a direction to complete the assessment de novo. 8. Aggrieved by the said action of the Ld. CIT(A), the assessee is in appeal before this Tribunal. The Ld. AR submitted that the sole grievance of the assessee is that the Ld. CIT(A) erred in remanding the matter for a de novo assessment instead of restricting the remand to the limited purpose of verification of the disallowance made by the Ld. AO under section 36(1)(iii) of the Act. In this regard, the Ld. AR invited our attention to para no.3 of page no. 2 of the assessment order, wherein the Ld. AO has himself recorded that the assessee had filed a reply dated 12.01.2022, enclosing books of account, computation of income, and other supporting documents. It was only in response to the final show-cause notice, proposing disallowance under section 36(1)(iii), that the assessee did not respond. Hence, the Ld. AR argued that the assessment was n....
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....dingly, there is no infirmity in the order of Ld. CIT(A) and prayed that the same should be upheld. 10. We have heard the rival submissions and perused the material available on record. The undisputed fact is that the assessment was completed under section 147 read with sections 144 and 144B of the Act, with a single disallowance made under section 36(1)(iii) of the Act amounting to Rs. 1,17,73,680/ -. We have gone through para no.3 of page no.2 of the order of Ld. AO, which is to the following effect : 3. It is noticed that the assessee has submitted his reply vide letter dated 12.01.2022 which is reproduced below: "With reference to the above subject, we were asked to submit the information as per the above referred notice, hence this reply is furnishing is as follows. 1. In reply to point no.1 of your notice, it is submitted that the information required as per the notice u/s. .142(1) dated 29.09.2021 is enclosed in Annexure-l. 2. In reply to point no.2 of your notice, we are herewith enclosed the copies of books of accounts for the current and previous year in Annexure-Il. 3. It is submitted that, the Audit Report(3CD) is not appl....
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....017-18 in ITA No. 676/Hyd/2020 dated 04.09.2024, which is to the following effect : 22. We have heard the rival submissions and perused the material on record and gone through the orders of the authorities below. The fact borne out from the record indicates that the assessee being in the business of real estate development, has collected advances from customers for sale of flats / commercial complexes in terms of MOU. As per the terms of MOU between the appellant and the customers, there is a provision for payment of interest ranging from 10% to 14% in case of any delay in delivery of flats to the customers. As per the contractual agreement with the customers in terms of MOU, the assessee has paid interest on customers' advances and debited under the head finance charges. The AO has disallowed interest expenses on the ground that the appellant failed to prove utilization of advances received from customers for the purpose of business. The ld. CIT(A) went on a different footing and computed disallowance of interest for diversion of interest-bearing funds for non-business purpose. We find that the basic business of the assessee is real estate development, and in that pro....
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....which are not covered in terms of commercial expediency, the assessee in his alternate plea has submitted that, the total impugned investment made by the assessee was Rs. 12,72,54,000/-, whereas the interest-free funds available with the assessee was Rs. 13,64,08,034/ -. Accordingly, the Ld. AR submitted that the interest-free funds available with the assessee were more than sufficient to cover the impugned investments. Therefore, there should not be any disallowance under section 36(1)(iii) of the Act in the hands of the assessee. In this regard, the Ld. AR relied upon the order of this Tribunal in the case of M/s. Kapil Foods and Structures Pvt. Ltd. (supra), wherein, under identical facts, this Tribunal had restored the issue to the file of the Ld. AO for limited verification of the disallowance under section 36(1)(iii) of the Act. There is no dispute about the fact that the linkage of availability of interest free funds qua the impugned investment has not been verified by the lower authorities. In this regard, we have gone through para nos.9 to 14 of the order of this Tribunal in the case of M/s. Kapil Foods and Structures Pvt. Ltd. (supra), which is to the following effect : ....
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....ication is required. Accordingly, we set aside the matter to the file of the Ld. AO with the direction to verify the additional evidences. If, on verification, it is found that interest-free funds are more than the non-current investments, the disallowance made u/s. 36(1)(iii) of the Act shall be deleted. 10.5 On perusal of above, we find that under the similar facts this Tribunal had restored the issue to the file of the Ld. AO for limited verification of the disallowance under section 36(1)(iii) of the Act. Therefore, respectfully following the decision of this Tribunal, as far as the other investments which are not covered in terms of commercial expediency, we restore the issue to the file of the Ld. AO for limited verification of the disallowance under section 36(1)(iii) of the Act, in terms of the direction given by this Tribunal in the case of M/s. Kapil Foods and Structures Pvt. Ltd. (supra). 11. In the result, the appeal of the assessee is allowed for statistical purposes, in terms of our above findings. Order pronounced in the open Court on 17th Oct., 2025. ============= Document 1 KAPIL FOODS AND STRUCTURES PRIVATE LIMITED CIN : U15499TG1992PTC014019 Balance....