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2015 (2) TMI 8 - ITAT DELHIAddition on account of outstanding liability of M/s Evershed - CIT(A)deleted the addition - Held that:- It is not disputed that the impugned amount has been adjusted towards professional fees on 12-1-2012 as per the regular method of accounting employed by assessee. The nature of assessee’s profession is such where the fees can be accounted for in the year in which the actual services are rendered and till then the amount received is to be treated as advance towards professional fees in the hands of assessee. We, therefore, do not find any infirmity in the order of CIT(A) on the issue in question. - Decided in favour of assessee. Disallowance of interest paid to the bank - CIT(A) deleted the addition made by the AO amounting to ₹ 1,08,67,588/- on account of proportionate interest disallowed out of total interest expenses of ₹ 2,10,35,698/- -AO pointed out that assessee had invested heavily in the Little & Co. which was a related party - Held that:- CIT(A) has not taken into consideration any additional evidence and has only considered the assesse’s plea regarding investment in the partnership firm M/s Little & Co., Mumbai, which was not made in the year under consideration but had been continuing since 19-5- 2006. Admittedly, the investment made by assessee in M/s Little & Co., Mumbai was on account of professional considerations inasmuch as the assessee had acquired 45% share in profit & loss account of the firm M/s Little & Co., Mumbai. Therefore, the amount outstanding against the said firm could not be treated as interest free loan calling for any disallowance of interest on proportionate basis. It was pure and simple professional arrangement between two firms and, therefore, the amount outstanding against M/s. Little & Co. was only on account of commercial expediency particularly when a dispute had cropped up between the two firms, which got finally settled by Hon’ble Supreme Court with the award of a sum of ₹ 8.5 crores in installments as noted earlier. The decision of Hon’ble Supreme Court in the case of SA Builders [2006 (12) TMI 82 - SUPREME COURT] is squarely applicable to the present set of facts, We, therefore, do not find any reason to interfere with the order of ld. CIT(A). - Decided in favour of assessee. Disallowance under the head London Rates & Taxes - CIT(A)deleted the addition - Held that:- The assessee had not submitted the necessary vouchers before the AO. Therefore, ld. CIT(A) should have called for a remand report before considering the assessee’s claim. We, therefore, restore this issue to the file of AO for deciding the issue de novo after taking into consideration the vouchers filed by assessee. - Decided in favour of assessee for statistical purposes.
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