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2017 (5) TMI 1217 - AT - Income TaxAddition u/s 14A r.w.r. 8d - assessee does not claim any expenditure against exempted income - Held that:- the investment made by the assessee in his individual capacity and the same has been reflected in the balance sheet, which has been rightly observed by the CIT-A. It is also noticed that the CIT-A found that the assessee claimed no expenses towards earning of dividend income. We find that the disallowance cannot go beyond the exempt income earned. Accordingly, the order of the CIT-A is justified and needs no interference. - Decided against revenue Disallowance on account of retention of money and security deposit - accrual of income - Held that:- We find that the retention money and security deposits are retained by the parties, who have given the contract to assessee and the said amounts would be refunded and accrued to assessee on satisfactory completion of contract work. Till then the assessee had no right to claim any parts of retention money, which retained by the parties. The Hon’ble High Court of Calcutta in the case of CIT Vs. Simplex Concrete Piles (I) Pvt. Ltd [1988 (12) TMI 52 - CALCUTTA High Court] held that all the receipts of retention and security deposit are contingent and happening of future event. The retention and security deposit deducted by various parties cannot be said to have been accrued to the assessee during the year under consideration in which year the bills are raised.- Decided against revenue Addition on account of interest earned on fixed deposits - AO added the same by treating as income from other sources - Held that:- The assessee filed necessary evidences that the assessee has earned interest from UCO Bank, Indian Overseas Bank and SBI Bank. The assessee got refund from ICICI Bank on account of excess amount paid, details of which are available at pages 80 to 86 of the paper book. It is also observed that the assessee has made fixed deposits for obtaining bank guarantee towards earnest money in terms of contract and rebate received from the ICICI Bank towards excess EMI paid by the assessee. We find that the assessee being a contractor and in order to secure the contract work bank guarantee is required for smooth functioning of his contract business. Therefore, the interest as earned and refund by the assessee is to be treated as business income.- Decided against revenue
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