TaxTMI 
TaxTMI 
2026 (7) TMI 1725
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....ed 30.08.2010 for consideration of following substantial questions of law: "Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in upholding the direction to the Assessing Officer to charge interest @ 12% on the amount outstanding from M/s Vani Industries & M/s. Super Investments & Finance Ltd." 3. Brief facts of the case are that the original assessment was framed vide order dated 31.03.2003 under section 143(3) of the Income Tax Act, 1961 [for short 'the Act'] and the Assessing Officer made addition of Rs. 12,82,601/- by rejecting the books of accounts and made addition by disallowing interest paid to two parties - M/s. Vani Industries and M/s. Super Investment & Finance ....
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....e above addition made by the Assessing Officer by applying the rate of 18% the same was upheld by the CIT(Appeals). 8. The assessee was following the mercantile system of accounting and, therefore, the tax was to be on accrual basis. As regards claim of the assessee that the financial position on these two parties (above mentioned) was not good, and, therefore, the assessee did not charge the interest is not considered by the CIT(Appeals). We, therefore, set aside the order of the CIT(Appeals) and remit the matter back to his file to consider the assessability of the income in the light of financial position of these two companies, details of which are to be brought on record by the assessee. It may also be stated that in the case ....
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....ated by the assessee that this amount was finally written off as bad debt in the assessment year 2005-06. In respect of the other concern it has been stated that this company was wound up in view of poor financial condition vide application dated 22.3.2004. The above clearly shows that so far as Super Investment & Finance Ltd. is concerned, application of winding up was filed in the year 2004 i.e. relevant to A.Y. 2004-05 and even in respect of Vani Industries, bad debt was written off in A.Y. 2005-06. All these actions were taken by the assessee much after the assessment in this case has been completed. It is also seen that no attempt whatsoever were taken by the assessee so far as recovery of any amount from these persons is concerned and....
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....missed the appeal filed the assessee by observing as under: "6. We have heard the rival submissions and perused the orders of the lower authorities and the material available on record. We find that in the original assessment framed on 31-3-2003 the A.O. made disallowance of interest of Rs.10,86,121/- @ 18% on the amount outstanding from M/s. Vani Industries and Super Investment & Finance Ltd. This was confirmed by the CIT(A). The Tribunal in further appeal by the assessee restored the matter back to the file of the CIT(A) to consider the assessability of income in the light of financial position of the two concerns details of which were to be brought on record by the assessee. We find that in appeal before the CIT(A) the assessee ....
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....ss the grounds of appeal of the assessee. 7 In the result, the appeal of the assessee is dismissed." 8. Learned advocate Mr. Manish Shah for the appellant-assessee submitted that the assessee had furnished all the details of the ledger accounts of both the firms i.e. M/s. Vani Industries and M/s. Super Investment & Finance Ltd. Referring to the ledger accounts, it was pointed out that since last previous two years, no interest was paid by M/s. Vani Industries. M/s. Super Investment and Finance Ltd stopped its business and was subsequently ordered to be wound up. It was also pointed out that the submissions made before the CIT(A) along with documents were not considered at all by the Tribunal and it has recorded incorrect facts r....
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....is appeal, it appears that Sales Tax Registration of M/s. Vani Industries was cancelled in the Year 1997 and even the Application was made for cancellation of the excise registration to demonstrate that M/s. Vani Industries was not having any business. However, both the CIT(A) and the Tribunal have ignored such documents and evidence placed on record. In the case of M/s. Super Investment & Finance Ltd also, the CIT(A) and the Tribunal have ignored that the assessee had not charged any interest for last two previous years in the account of M/s. Super Investments & Finance Ltd Ultimately, it is not in dispute that no amount was recovered by the assessee from both the concern. One of the grounds for making additions is that both the concurs we....