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2012 (6) TMI 387 - AT - Income TaxDeemed dividend - advance received from M/s A - addition made on ground that M/s P is a common share holder, having 18.99% shareholding in M/s A and 19.72% in assessee company - Held that:- AO has made refernce to Section 2(22)(e), however has not examined provisions of section 2(32) with reference to company which has a substantial interest in company, wherein it was specifically mentioned of carrying not less than 20% of voting power. Admittedly M/s P has less than 20% share holding in both companies. Also, assessee is not owning any share in M/s A. For both the reasons, order of CIT (A) is upheld and issue is decided in favor of assessee. Rejection of books of account on alleged failure of assessee to reconcile turnover disclosed in P/L A/c and reconcile the turnover with STT - estimation of income 21% of turnover - dis-allowance of expenditure - Held that:- Reconciling the turnover on the basis of STT is if not impossible, virtually cumbersome considering the nature of the business, turnover involved and different rates of STT paid for different transactions. Therefore, books of account cannot be rejected simply because the assessee failed to reconcile the turnover to the satisfaction of AO. There is no allegation that the assessee was indulging in any transactions outside the books outside the stock exchange. The books of account were also audited. Hence, CIT (A) was correct in accepting the assessee’s books of account and rejection of estimation at 1% therein, and allowing the expenditure - Decided in favor of assessee. Business Income vs Income from Other Sources - other Income viz IPO referral fee, auction charges and Interest received - Held that:- There is no dispute with reference to the IPO referral fee, auction charges and Interest received being part of business operations and business income except the Income tax Refund. We uphold the order of the CIT (A) as it does not have any tax impact on the small amount of Rs.3,300/-.
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