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2018 (1) TMI 1645 - AT - Income TaxDisallowance of interest relating to the diversion of funds for non-business purposes - HELD THAT:- As submission of the assessee’s counsel that the issue may be restored to the file of the AO and the same will be in tune with the decision of the Tribunal in the case of M/s. Bafna Builders and Land Developers [2017 (12) TMI 1519 - ITAT PUNE] where Ground as already remanded to the file of the AO for fresh adjudication as per the discussion given in Para 17 of the said order of the Tribunal (supra). In the remand proceedings, AO was directed to grant reasonable opportunity to the assessee. Disallowance of interest u/s.14A r.w. Rule 8D of the I.T. Rules - HELD THAT:- As assessee submitted that the assessee has excess funds which were invested in the shares which yielded dividend income and the interest claimed by the assessee is nothing to do with the investments made by him in the exempt income yielding investments. For examining the claim of the assessee as well as applying the correct law on this issue, Ld. Counsel desires that the matter should be restored to the file of the AO allowed. Addition u/s.69B - HELD THAT:- As supplying the copy of the document to the assessee is her legitimate right before any addition is made in her hands relying on the said document. AO is directed to supply the same and also cross examination if any before making any addition in her case and in the remand proceedings. Accordingly, as requested, the issue is restored to the file of the AO for fresh adjudication. AO is directed to grant reasonable opportunity of being to the assessee in accordance with law. Accordingly, Ground No.3 raised by the assessee is allowed for statistical purposes. Capital gain computation - addition u/s.50C - HELD THAT:- We direct the AO to examine all the aspects of the issue and decide the requirement of making addition in the hands of the assessee u/s.50C of the Act. AO shall grant reasonable opportunity of being heard to the assessee in connection with the set principles of natural justice. Accordingly, Ground No. 4 and the additional grounds raised in his chart. Addition u/s 28(iv) - HELD THAT:- This is a case where the assessee purchased commercial premises for a lesser consideration qua the fair market value of the same. Originally, the AO taxed the differential cost u/s.28(iv) of the Act in the hands of the firm who sold the commercial premises to the assessee. Assessee has 60% shareholder in the said firm by name M/s. Bafna Builders and Land Developers. It is the finding of the CIT(A) that the assessee got the benefit to the tune of ₹ 2,44,62,169/-. It is the finding of the Tribunal as well as the CIT(A) that the said amount is not taxable in the hands of the firm. CIT(A) have given the above direction, which in our view is consequential comment of the CIT(A) Even if the said direction is absent in the said paragraph, the authorities below would anyway initiate the consequential proceedings. From that point of view, we are of the view that the direction given by the CIT(A) does not warrant any amendment. 50% disallowance on vehicle expenses, Drivers’ salary and depreciation addition restricted roughly 15% of the total expenses. Bogus expenses on tea/coffee/cold drinks - Addition on account of boxes, i.e. the packing material - HELD THAT:- AO could neither bring any corroborative evidence that the assessee has made bogus payments nor prove the expenses to be untrue. Therefore, we uphold the decision of the CIT(A) on this issue. Disallowance on account of Kavi Sammelan Expenses - HELD THAT:- Order of CIT(A) holding the expenses as income expenses and consequently deleting the expenses incurred by the assessee on Haysa Kavi Sammelan does not warrant any interference from our side. Accordingly, Ground No.3 raised by the Revenue is dismissed. Addition u/s.40A(2)(b) - amount was claimed as payment of salary and bonus to the employees - The same constitutes an extra amount paid in this year qua the last year’s claim - HELD THAT:- We find the AO is duty bound to prove the salary and bonus paid to the employees as unreasonable. CIT(A) has rightly held that the addition made the AO is only on estimate basis and without discharging the onus. In this view of the matter, the decision of the CIT(A) needs to be approved and in favour of the assessee. Accordingly Ground No.5 raised by the revenue is dismissed.
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