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2018 (12) TMI 465 - HC - Income TaxDisallowance of expenses - non business expenses - interest payment was claimed on the loan borrowed from Karnataka State Financial Corporation (for short KSFC) in the name of M/s.Hotel Haveli which was being run by M/s. Maruthi Enterprises, for which the appellant was the proprietress - Held that:- Certain fresh material were produced for consideration. However, the lease deed was not produced, either at the assessment stage or at the appeal stage. The sources of receipts as claimed by the assessee were not genuine. That none of the documents demonstrated that the expenses as claimed towards Hotel Haveli were in any manner related to M/s. Maruthi Enterprises. Therefore, in the absence of any material to substantiate, the same the appeal was dismissed. The material on record would indicate that the assessee could not substantiate her claim and inspite of granting sufficient opportunity, no evidence of material was led-in, in support of her case. Even the few documents that were relied upon did not assist the assessee in any manner whatsoever. Therefore, based on the available material, the findings were recorded. Under these circumstances, we do not find any ground to interfere with the order passed by the Tribunal. The order passed by the Tribunal is based on the material available on record. Therefore, no interference is called for. The Tribunal passed a common order affirming the findings of the Assessing Officer, as well as the Commissioner of Income Tax (Appeals). The Tribunal was also of the view that even before the Tribunal, the assessee could not substantiate her claim with any tangible evidence or material. Therefore, having considered the Balance Sheet and the Profit And Loss Account, the findings recorded by both the authorities were confirmed. - Decided against assessee. Disallowance of annual rent expenditure - AO found that the assessee has not furnished the description of the property, rental agreement, name and address of the tenants, sources of investments, etc. - Held that:- The appellant claims to have closed the hotel in the month of October’1998. Therefore, there was no nexus between the expenditure or depreciation claimed by the assessee and the business of subleasing or leasing the property. Therefore, the Commissioner of Income Tax (Appeals) rightly confirmed the computation made by the Assessing Officer. Except the plea of the assessee that the earning was out of the several deals struck with regard to the real estate, nothing is forthcoming on record. Therefore, in the absence of any material on record, 75% of the gross commission receipt was computed as net income. Even though the proposal was conveyed to the assessee, even till the date of the passing of the order, no reply was furnished by the assessee. No books of accounts were produced. Therefore, the computation was made at a sum of ₹ 6,57,580/-. It was contended that the material produced before the Assessing Officer was not considered. Therefore, the said material was once again produced before the Commissioner of Income Tax (Appeals), which were considered. Jurisdiction to issue a notice u/s 148 - Held that:- As noticed that the assessee did not file the return of income in time. She had not filed the return of income till 31.03.2003. She filed the return of income belatedly on 30.09.2003. Therefore, the return was treated as a non-est return, which would consequently indicate that certain income had escaped assessment. Therefore, the Assessing Officer being satisfied with the same, issued a notice under Section–148 of the Income tax Act. Therefore, the said contention was negated. We find no good ground to take a different view of the matter. Hence, we are of the considered view that the reopening of the assessment under Section–148 of I.T. Act is valid and in tune with law. Imposition of interest under Sections 234-A and 234-B - Held that:- In the given facts and circumstances of the case, we do not find any ground to interfere. Moreover, the interest is imposed in terms of the statute. Interpretation has been made in a catena of judgments by this Court as well as the Hon’ble Supreme Court. Hence, we find no error in the imposition of interest under Sections-234-A and 234-B of the Income tax Act.
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