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2017 (10) TMI 1537 - ITAT CHENNAIDeemed dividend addition u/s 2(22)(e) - transaction between the assessee-partnership firm and M/s Abdul Wahid Tanneries Pvt. Ltd ( company) and one of the partners is holding 35% of shares in M/s Abdul Wahid Tanneries Pvt. Ltd - s per assessee its is commercial transaction between the assessee-firm and the company and assessee-firm is neither a beneficial shareholder nor a registered shareholder - whether the amounts shown as unsecured credit can be assessed as deemed dividend in the hands of the assessee-partnership firm? - HELD THAT:- Admittedly, one of the partners of the assessee-firm, namely, Shri Rafeeq Ahmed was the registered shareholder holding 35% of shares in M/s Abdul Wahid Tanneries Pvt. Ltd. It is not the case of the Revenue that the assessee-firm invested its own funds through Shri Rafeeq Ahmed in the shares of M/s Abdul Wahid Tanneries Pvt. Ltd. Moreover, no material is also available on record to suggest that assessee-partnership firm invested its own funds in the name of Shri Rafeeq Ahmed in the shares of M/s Abdul Wahid Tanneries Pvt. Ltd. - this Tribunal is of the considered opinion that the assessee-partnership firm cannot be construed either as registered shareholder or as beneficial shareholder. Therefore, the assessee cannot be assessed under Section 2(22)(e) - At the best, it may be considered in the hands of the individual partner who is the shareholder in the company - addition made by the AO under Section 2(22)(e) of the Act is deleted. - Decided in favour of assessee. Disallowance of interest on the delayed payment of sales tax - HELD THAT:- Delayed payment of interest is compensatory in nature, therefore, this Tribunal is of the considered opinion that for delayed payment of sales tax, the interest paid by the assessee cannot be disallowed while computing the total income. Interest on the TDS amount - assessee itself disallowed the interest on the TDS amount and AO without verifying the computation, disallowed the same once again - HELD THAT:- Since the assessee claims that the interest on TDS was already disallowed, this Tribunal is of the considered opinion that the Assessing Officer needs to verify the same. Accordingly, the orders of both the authorities below are set aside and the issue of disallowance towards interest on TDS amount is remitted back to the file of the AO to re-examine the matter and decide the issue in accordance with law, after giving a reasonable opportunity to the assessee. Disallowance being the interest paid on credit card - assessee claims that interest paid on credit card is only for the purpose of business and the Department contends that the personal element cannot be ruled out - HELD THAT:- this Tribunal is of the considered opinion that the expenditure incurred by the assessee through credit card needs to be examined. If the payment was made only for business purpose, then there cannot be any disallowance of interest. In case, the credit card was used for meeting personal expenditure, then such expenditure cannot be allowed. Therefore, these aspects need to be verified. Accordingly, orders of both the authorities below are set aside and the issue is remitted back to the file of the AO to re-examine the matter afresh. Disallowance of Customs duty - HELD THAT:- Since the assessee is ready to provide the evidence, this aspect can be verified by the Assessing Officer on the basis of the evidence that may be filed by the assessee for payment of Customs duty. Accordingly, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer.
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