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2023 (3) TMI 1142 - ITAT KOLKATADisallowance u/s.14A r.w.r. 8D(2)(iii) - sufficiency of own funds - assessee submitted that he has earned no exempt income during the year and had its own funds which are more than the investment made by it in the unquoted shares - HELD THAT:- We find that the issue where assessee has earned no exempt income during the ye ar no disallowance is called for u/s. 14A of the Act has been addressed in the case of PCIT Vs. Era Infrastructure (India) [2022 (7) TMI 1093 - DELHI HIGH COURT] holding no disallowance is required to be made in the case of the assessee because it has not earned any tax-free income and allowed the appeal of the assessee by deleting the addition so made. Further, the issue relating to assessee having own fund more than the investments made in the investments yielding exempt income has been dealt with in favour of the assessee by the Hon’ble jurisdictional High court of Calcutta in the case of REI Agro Ltd. [2013 (12) TMI 1517 - CALCUTTA HIGH COURT]. Decided in favour of assessee. Disallowance u/s. 40A(2) - interest charged by one party at a rate of interest @16% compared to 10% by the remaining other parties - HELD THAT:- We note that there is no dispute on the payment of interest. The issue is in respect of rate of interest which has been charged @ 16% vis-à-vis 10% by the other parties. We note that the difference in terms and conditions with Carvan Creations Pvt. Ltd. which have been effectively brought on record and considered by the Ld. CIT(A), and also the fact that how this party is a related party within the meaning of sec. 40A(2)(b) for which nothing is brought on record to establish the said relationship. No reason to interfere with the finding given by the Ld. CIT(A) and accordingly, dismiss ground no. 2 taken by the revenue in this respect. Disallowance of depreciation claimed on its speed boat - As per AO rental income from the said boat which is not allowable - HELD THAT:- CIT(A) noted that rental income from boat has to be assessed either as business income or income from other sources. It cannot be assessed as income from house property. Accordingly, depreciation was allowed on the boat even though it had earned rentals for three months - We do agree with the observations and findings of Ld. CIT(A) in allowing the claim of depreciation. Undisclosed stock a property which was developed under a Joint Venture Agreement (JV) with Japna Estates - HELD THAT:- CIT(A) after going through the facts of the case and the terms and conditions of the JV Agreement, found that 4th floor of the building belonged to the developer in terms of the JV agreement and, therefore, there was no question of this floor being shown as part of stock of the assessee and, therefore, there cannot be any undisclosed stock on account of 4th floor of the building. He thus, deleted the addition made in this respect - Revenue has also raised the contention that Ld. CIT(A) should have called for a remand report in respect of additional evidence for which we note that Ld. CIT(A) has objectively analysed and gone through the JV agreement placed before him in accordance with coterminous power vested into him. On perusal of the facts and the observations made by the Ld. CIT(A), we do not find any reason to interfere with the findings given by ld. CIT(A). Accordingly, this ground of appeal of the revenue is dismissed. Addition made towards bogus purchase relating to the issue of undisclosed stock detailed - HELD THAT:- As three floors of the building were with the assessee and the 4th floor and the roof rights was with the developer, there was no element of any bogus purchase on this account. Ld. CIT(A) by observing these facts has deleted the addition made on this account - We agree with the finding given by the Ld. CIT(A) and accordingly dismiss the ground of appeal of the revenue in this respect.
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