Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (10) TMI 784 - AT - Income TaxDisallowance u/s 14A of the Income Tax Act - Assessee has advanced an amount of Rs.8,08,81,458/- to MPCPL. The assessee company has borrowed money from HDFC Bank and others and the assessee claimed that the borrowed amount was used for business purpose - Assessee has paid interest at 12% on secured loan taken by the company and the Assessing Officer worked out the disallowable interest at 12% on funds utilized outside business works which works out to Rs.97,05,775/-. However, he limited disallowance to the extent of interest actually paid of Rs.56,18,466/- - Held that:- Assessee submitted that operation of the company the assessee has entered into a joint venture with MPCPL for construction of commercial complex, hotel and purchase of property and therefore, advance of such amount is as its share. The assessee has not brought out evidence to substantiate that the advance has been given for business purpose of the assessee company Issue remitted to the file of the Assessing Officer to give one more opportunity to the assessee to place on record the material to show that such advance was given for commercial expediency. Principle of res-judicata for disallowance of expense Held that:- Assessee has not been able to produce all bills and vouchers in respect of the claim of expenditure. The assessee has not brought out any evidence to prove that 10% of expenditure should not be disallowed as in the preceding year. Since, no new proof has been given for this year distinguishing the situation from earlier year, no any infirmity in the Order of the Assessing Officer in following the predecessor's order in the preceding year i.e., 2004-2005 Decided against the Assessee. Disallowance u/s 40(a)(ia) of the Income tax act Held that:- Assessee has to share 15% of the gross maintenance receipts collected during the year with the owner of the building i.e., Deep Corporation Pvt. Ltd. and taking into account the stipulation made in the agreement it is a diversion of income at source and not an expenditure in the hands of the assessee Disallowance u/s 40(a)(ia) to be deleted Decided in favor of Assessee.
|