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2017 (10) TMI 536 - AT - Income TaxDisallowance of interest to beneficiaries - Held that:- There is some error in presenting the account, and therefore, the ld.AO instead of strictly going through the entries shown in the books, ought to have verified the contentions of the assessee with other details. In the grounds, the assessee has specifically pointed out as to how the benefit meant for the beneficiaries have been accumulated and not paid to them over a period of time. These undistributed benefits have been treated as capital of the beneficiaries in the trust, which has been used for the purpose of business. There are various other aspects also namely, the ld.DR pointed out that the assessee has been using PAN of a firm, whereas it should have a separate account number. All these aspects have confused the ld.AO. There may be certain short coming in maintaining the accounts or availing PAN but these are not so major which can persuade the AO to disallow the claim. Therefore, taking into consideration other details, we are of the view that the assessee has undistributed benefit of the beneficiaries which has been construed as capital balance, and as per the decision taken by the trust, interest has been provided on such capital balance of the beneficiaries. Therefore, the deduction ought to be allowed to them. - Decided in favour of assessee. Disallowance of the commission payment - assessee failed to demonstrate nature of services rendered by these concerns - addition u/s 40A - Held that:- We find that in the Asstt.Year 2007-08, the Tribunal has followed order of the ITAT in the Asstt.Year 2008-09 in deleting the addition as observing Trust has availed the services of these persons, therefore the commission was legitimately paid on the business brought by them. Resultantly ground raised by the assessee is allowed - Decided in favour of assessee.
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