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2016 (1) TMI 1233 - ITAT PUNEDisallowance u/s.14A - ternate contention of the Ld. Counsel for the assessee that since the entire income of the assessee is eligible for deduction u/s.80IA(4), therefore, even if any disallowance is made the business income of the assessee will go up and therefore there will be corresponding deduction of the said amount and therefore it is revenue neutral - Held that:- Since the investments are made in shares of the holding company who in turn has invested the amount in the subsidiary company and special purpose vehicle companies, for getting contracts from the PWD department of Government of Maharashtra, therefore, the investment was for commercial expediency and therefore no disallowance of interest is called for. As no dividend income has been received which is exempt from tax, therefore, no disallowance u/s.14A should be made. We also find merit in the alternate contention of the assessee that since assessee is entitled to deduction u/s.80IA(4), therefore, the addition, if any, has to be allowed u/s.80IA(4) and therefore, the same is revenue neutral. Admittedly, the income of the assessee is eligible for deduction u/s.80IA which the AO himself has allowed in the body of the assessment order. The returned business income has been allowed by the AO as deduction u/s.80IA as per the claim. Therefore, once a part of the interest expenditure is disallowed then the corresponding business income will go up. Therefore, request of the assessee that the AO may be directed to increase the deduction u/s.80IA(4) to the extent of disallowance u/s.14A which increases the business profit to that extent is acceptable. In this view of the matter, we set aside the order of the CIT(A) and direct the AO to delete the disallowance made u/sa.14A. Ground of appeal No.1 as well as the first issue in the additional ground raised by the assessee are accordingly allowed. Bogus share capital receipt - enhancing the income on account of alleged commission paid for obtaining bogus share capital - Held that:- We admit the additional evidences filed by Ld. Counsel for the assessee and restore this issue to the file of the AO with a direction to verify the records from the AO of Amicitia Infrastructure Pvt. Ltd. In case the investment by Amicitia Infrastructure Pvt. Ltd. in the shares of Hari Infrastructure Pvt. Ltd. has been accepted by the AO of Amicitia Infrastructure Pvt. Ltd., then in that case no addition can be made in the hands of the assessee and the AO has to delete the addition to this extent. So far as the investment by the remaining 8 parties are concerned admittedly the assessee has provided the complete details including names and addresses, PAN numbers, details of the investors and the details of cheque Nos. etc. through which the amounts have been received. We also find force from the submission of the assessee that the statement recorded from different parties were not confronted to the assessee and he was not provided with an opportunity to rebut the same. Subsequent to the passing of the order of the CIT(A) various decisions have come according to which addition cannot be made in the hands of the assessee company where it has given the names and addresses, PAN numbers and bank accounts details of the alleged bogus shareholders and the addition can be made only in the hands of the bogus share holders. Therefore, in the interest of justice, we restore this issue to the file of the AO with a direction to decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. Addition in the case of Shri Chandrakant Sonawane is concerned, we find the confirmation letter filed by the assessee was not properly considered and adjudicated by the AO or the CIT(A). We therefore remit this issue also to the file of the AO for fresh adjudication. - Decided in favour of assessee for statistical purposes. Addition on account of rebate of interest and waiver of loan - Held that:- In our opinion, when any expenditure is neither debited to the profit and loss accounts nor claimed as a deduction cannot be disallowed by the AO. Since the Ld.CIT(A) after recording that the assessee has neither debited the interest in the profit and loss account which was waived by the bank nor claimed the same as deduction has deleted the addition made by the AO, therefore, in absence of any distinguishable feature brought to our notice by the Ld. Departmental Representative, we find no infirmity in the order of CIT(A) on this issue. Accordingly, grounds raised by the Revenue on this issue are dismissed. Addition being the principal amount waived by the bank - Held that:- In the instant case, we find the facts are not discernible from the order of the AO as well as the order of the CIT(A) as to whether the amount was utilised for capital asset or for trading purpose. We therefore restore the issue of remission of R.2.33 crores by the bank to the file of the AO with a direction to decide the issue afresh in the light of the decision of the Hon’ble Bombay High Court Mahindra and Mahindra Ltd. (2003 (1) TMI 71 - BOMBAY High Court ) and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Grounds raised by the Revenue are accordingly dismissed and the grounds raised by the assessee on this issue are allowed for statistical purposes.
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