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2017 (12) TMI 913 - AT - Income TaxEnhancement of income on account of excessive interest claimed in the P & L account - Held that:- The assessee neither during remand proceedings nor during First Appellate Proceedings could reconcile or explain the difference in the interest expenditure claimed. Even before us the ld. AR has failed to explain the difference in interest expenditure as claimed in P & L account and the statement of interest furnished before the Commissioner of Income Tax (Appeals). In P & L account the assessee has claimed interest expenditure ₹ 31,20,483/- as against actual payment of interest ₹ 19,70,509/-. In the absence of any explanation, we find no reason to interfere with the findings of Commissioner of Income Tax (Appeals) qua the addition - Decided against assessee Disallowance u/s. 40(a)(ia) - AR has prayed for remitting the issue back to the file of Assessing Officer in the light of newly inserted second proviso to section 40(a)(ia) - Held that:- Remitting the issue to Assessing Officer for verification in the light of newly inserted proviso even respect of earlier assessment year has been approved by Hon’ble Delhi High Court in the case of Commissioner of Income Tax Vs. Ansal Land Mark Township P. Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT ]. Therefore, in view of above we deem it appropriate to restore this issue back to the file of Assessing Officer with a direction to assessee to furnish all the relevant documents before the Assessing Officer evidencing that interest paid by assessee has been offered to tax by recipients in their respective return of income Disallowance u/s 14A - Held that:- The assessee has not demonstrated before the Tribunal that interest free funds of assessee are sufficient to cover the investments. However, It is made clear that while computing disallowance u/s. 14A r.w.r. 8D(2)(iii) only those investments should be taken into consideration on which the assessee has earned interest free income. Accordingly, ground No. 3 raised in the appeal by assessee is allowed for statistical purpose. Disallowance u/s. 40A(3) on account of cash payments made for purchase of land - Held that:- after perusal of the impugned order it is not evident whether the authorities below have examined the fact regarding claim of deduction by assessee during the period relevant to the assessment year under appeal. We deem it appropriate to restore this issue back to the file of Assessing Officer for verification. If the assessee has not claimed the amount of ₹ 5,50,000/- as deduction during assessment year under appeal, no disallowance u/s. 40A(3) is warranted. Accordingly, ground No. 4 raised in the appeal by assessee is allowed for statistical purpose. Disallowance u/s. 40(a)(ia) - contention of the assessee is that he has deducted tax at source while making the aforesaid payments as professional fees - Held that:- A perusal of the impugned order shows that there is no findings by the Commissioner of Income Tax (Appeals) on the aforesaid disallowance. Therefore, we deem it appropriate to remit this issue back to the file of Assessing Officer for verification. If the assessee has deducted tax at source on the payment of professional fees and has deposited the TDS to the Government exchequer, no disallowance u/s. 40(a)(ia) is to be made. The assessee is directed to furnish necessary evidence before Assessing Officer in support of his claim. Accordingly, ground No. 5 raised in the appeal is allowed for statistical purpose.
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