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2019 (3) TMI 561 - AT - Income TaxUnexplained cash credit u/s 68 - Disallowance of interest - assessee could neither furnish the loan confirmation nor offered any explanation about the nature and source of the loan - HELD THAT:- It is evident, assessee wanted to sell one of its property in Delhi to USG Buildwell Pvt. Ltd. since it needed finance for its business activities. It is also a fact on record that since the assessee could not hand over the possession of the property within the agreed period, it paid the interest on the advance received as per the terms of the agreement. Therefore, there is factually no dispute on the issue of payment of interest by the assessee. Therefore, once the nature and source of amount of ₹ 2 crore received by the assessee is accepted, the disallowance of interest made by the Assessing Officer by treating the advance received as unexplained cash credit has to be deleted. - Decided in favour of assessee Disallowance made on account of payment of club entry fee - allowable business expenditure - HELD THAT:- We find that the issue has been settled in favour of the assessee by the decision in United Glass Manufacturing Co. Ltd. [2012 (9) TMI 914 - SUPREME COURT] wherein held that club membership fee incurred by the assessee for its employees is purely a business expenditure, hence, allowable under section 37(1) of the Act. - Decided in favour of assessee Computation of deduction u/s 80HHD - AO relying upon the assessment order passed in assessee’s own case for assessment year 2002–03 has included the payment made to other hoteliers in the total receipts for computing deduction under section 80HHD - HELD THAT:- As decided in favour of assessee in assessment years 2002–03 held that for the amounts, the assessee has issued certificate in Form 10CCAC cannot be treated as a receipt for the purpose of total business and accordingly directed the AO to exclude the receipt passed on by the assessee to other hotel and travel agent. For second/other receipt it was held that the said amount of foreign currency realized after 30.09.2009 have not entered the numerator i.e. receipt earned by assessee from rendering service to foreign tourist which would not enter the denominator in the formula and directed the AO to exclude the same. We have noted that finding of ld. CIT(A) in accordance with Explanation 1 to sub-section (2), sub-section (2) and sub-section (3) of section 80HHD. - Decided in favour of assessee Claim of deduction u/s 80HHD in respect of foreign exchange fluctuation gain - addition as foreign exchange fluctuation holding that it does not emanate from the services provided by the assessee to foreign tourist- HELD THAT:- As decided in favour of assessee in assessment years 2002–03 as held foreign exchange gain forms part and partial of foreign exchange sale proceed and cannot be excluded while computing deduction under section 80HHD. Unexplained expenditure under section 69C - assessee’s claim alleging non–furnishing of supporting evidence / confirmations by the assessee - HELD THAT:- AR as submitted before us that the outstanding amount appearing in the books of account represent the amount payable to the Hotels at Goa on account of booking of books on behalf of customers and in this context he has drawn our attention to the statement of accounts of the Hotels, however, the assessee has to substantiate its claim through proper supporting documentary evidences. Considering the allegation of the departmental authorities that the assessee has not furnished any supporting evidence to substantiate its claim, we are inclined to restore the issue to the Assessing Officer for de novo adjudication for enabling the assessee to substantiate its claim through proper documentary evidences - Grounds of assessee allowed for statistical purposes.
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