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2018 (3) TMI 1876 - AT - Income TaxIncome from house property - Determination of Annual letting value of the property u/s 23 - assessee had taken huge amount as interest free deposit and rent was received at lower amount - HELD THAT:- Since the assessee had taken huge amount of interest free deposit, the AO has determined the ALV of the property at a higher amount. The principles for determining Annual letting Value has since been laid down by Hon’ble Bombay High Court in the case of Tip Top Typography (2014 (8) TMI 356 - BOMBAY HIGH COURT ). Hence the Tribunal has restored the issue to the file of the AO in order to determine the ALV by following the decision rendered in the above said case. Accordingly, consistent with the view taken in AY 2007-08 and 2008-09 in the assessee’s own case, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with similar directions. Disallowance made u/s 40(a)(ia) - Whether TDS amount is remitted before the due date for filing return of income u/s 139(1)? - HELD THAT:- The provisions of sec. 40(a)(ia) amended by Finance Act 2010 provides that no disallowance shall be made u/s 40(a)(ia) of the Act shall be made, if the TDS amount is remitted before the due date for filing return of income u/s 139(1) of the Act. Accordingly, if the assessee has paid the TDS amount before the due date for filing return of income u/s 139(1) of the Act, no disallowance u/s 40(a)(ia) is required to be made. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to verify the date of payment of TDS amount and delete the disallowance if the TDS amount is paid before the due date for filing return of income u/s 139(1) . Addition of notional interest in respect of interest free loan given to Thailand subsidiary - HELD THAT:- Identical addition was also made in AY 2008-09 and the Tribunal has restored the issue to the file of the AO to examine the issue afresh by following the decision rendered by Hon’ble Bombay High Court in the case of CIT Vs. Tata Auto-Comp Systems (2015 (4) TMI 681 - BOMBAY HIGH COURT ). Consistent with the view taken by the Tribunal in AY 2008-09, we restore this issue to the file of the AO with similar directions. Scientific Research Expenditure - Non furnishing of Form 3CL - A.R submitted that the furnishing of Form 3CL is only directory and not mandatory for claiming deduction u/s 35(2AB) - HELD THAT:- Identical disallowance made by the AO in AY 2007-08 and 2008-09 has since been deleted by the Tribunal. In AY 2008-09, the assessee has field Form 3CL before the Tribunal and hence the Tribunal has observed that there should not be any bar for the assessee in availing the deduction u/s 35(2AB). However, since the AO has not examined Form 3CL, the Tribunal directed the AO to allow the claim after verifying Form 3CL. From the order passed by Ld CIT(A) for AY 2009-10, we notice that the assessee has furnished Form 3CL dated 07-03-2012 before Ld CIT(A) in AY 2009-10. In any case, in the case laws relied upon by the assessee, furnishing of Form 3CL was held to be not mandatory. Under these set of facts, we are of the view that there is no reason to interfere with the order passed by Ld CIT(A) on this issue in both the years under consideration. Gross profit by rejecting the books of accounts - HELD THAT:- In AY 2007-08 and 2008-09, the Ld CIT(A) has held that the rejection of books of accounts is not warranted and accordingly held that the provisions of sec. 145 are not attracted AND held that in terms of sec.145A of the Act, CENVAT & VAT are to be added to the Closing stock. As directed the AO to work out the addition on the basis of particulars to be submitted by the assessee in respect of closing stock. Accordingly, by following his decision rendered in AY 2007-08 and 2008-09, the Ld CIT(A) set aside the rejection of books of accounts and restricted the addition only to Closing stock as per the direction given in AY 2007-08. Since a particular view has already been taken by the Tribunal on identical issue in AY 2007-08 and 2008-09, following the same we uphold the order passed by Ld CIT(A) on this issue in both the years under consideration. Disallowance made u/s 14A r.w.r. 8D - HELD THAT:- Admittedly, the own funds available with the assessee is in far excess of the value of investments. Accordingly the presumption would be that the assessee has used its own funds for making investments as per the decision rendered in the case of HDFC Bank Ltd 2016 (3) TMI 755 - BOMBAY HIGH COURT Accordingly disallowance of interest expenditure u/r 8D(2)(ii) is not called for. Accordingly we modify the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance of interest expenditure u/s 8D(2)(ii) of the I T Rules. Disallowance made out of administrative expenses under Rule 8D(2)(iii) of the IT Rules, we notice that the assessee has brought forward most of the investments from the prior year. During the year under consideration, the assessee has made a fresh investment of ₹ 11.25 lakhs in a joint venture company. The assessee has received dividend income of ₹ 1.24 lakhs. Thus we notice that the activity of the assessee in the investment portfolio is very minimal. Under these set of facts, we are of the view that the application of Rule 8D(2)(iii) is not warranted in this case. Considering the activities of the assessee, we are of the view that a round sum disallowance of ₹ 10,000/- out of administrative expenses would meet the requirement of sec. 14A of the Act. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to restrict the disallowance out of administrative expenses to ₹ 10,000/-.
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