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2015 (3) TMI 971 - AT - Income TaxAddition u/s. 40A(2)(b) - interest to its sister concern - CIT(A) deleted addition in view of the provisions of section 37(1) of the I.T. Act, 1961 - Held that:- The undisputed fact is that the assessee has paid interest to its sister concern @ 12% per annum. It is also an undisputed fact that the assessee has not paid any interest on other borrowings/advances. However, the reasons given by the AO for disallowing the interest are not tenable in law. Further, the assessee has been paying interest since 1999-2000 by making TDS as per provisions of law. The said interest has been allowed in all the preceding assessment year. The recipient M/s. Gazebo Industries Ltd. is declaring the interest income in its return of income. The Ld. CIT(A) has very rightly declined to invoke Explanation to Sec. 37(1) of the Act in respect of this payment of interest. Considering all these facts in totality, no interference is called for with the findings of the Ld. CIT(A). - Decided against revenue. Addition u/s. 40(a)(ia) - TDS on labour charges - CIT(A) deleted addition - Held that:- It is not in dispute that the labour charges have been incurred by M/s. Dev Construction. The Ld. CIT(A) has given a categorical finding that TDS has been made by Dev Construction on such labour payments. It is an undisputed fact that the assessee has simply reimbursed the expenditure incurred by M/s. Dev Construction. On such reimbursement of expenditure, there is no liability for TDS. The Ld. CIT(A) has rightly deleted the addition. No interference is called for. - Decided against revenue. Deemed dividend - CIT(A) allowed part relief out of addition u/s 2(22)(e) - Held that:- The Ld. Counsel for the assessee for the first time stated that provisions of Sec. 2(22)(e) of the Act was not applicable on the facts of the case because the assessee is neither a share holder of M/s. Gazebo Industries Ltd. nor the assessee is a member or a partner or a share holder in any concern in which M/s. Gazebo Industries Ltd. has a substantial interest nor the assessee has any substantial interest in M/s. Gazebo Industries Ltd. We find that this aspect has not been looked into by the lower authorities. Therefore, for verifying the fact for this limited purpose, we restore this issue to the files of the AO. - Decided in favour of revenue for statistical purpose.
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