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2021 (11) TMI 412 - AT - Income TaxDisallowance of expenses holding that the same were incurred for non-business purposes - HELD THAT:- CIT(A) separately discussed about each head of all expenses and held that the said expenditure was relating to the business activity and business purpose of the assessee. The assessee had duly explained that the assessee had undertaken a new project at Hinjawadi, Maharashtra jointly with MIDC [Maharashtra Industrial Development Corporation, a Govt. of Maharashtra undertaking]. As submitted that for better management of the J.V(joint venture) business, the assessee took a land for its offices at Mumbai/Bangalore and several expenditure were incurred for upkeeping and maintenance of office located at Mumbai & Bangalore. The assessee had claimed this expenditure as business expenditure. The Ld. CIT(A) has also disallowed certain expenditure observing the same of capital nature and of enduring benefit of the assessee. The Ld. DR could not point out infirmity or defect in the above findings of the Ld. CIT(A) warranting our interference. Disallowance on account of interest on delayed payment and TDS written off - HELD THAT:- The assessee duly explained to the Ld. CIT(A) that the TDS deducted by other parties was shown receivable by the assessee. However, due to non-supply of the requisite documents- TDS certificates etc by the concerned deductor, the assessee could not claim the TDS refund. Therefore, said amount was written off in the books of assessee. The Ld. CIT(A) observed that since the assessee company could not recover the TDS refund, hence, the same was rightly written off in the books of accounts. He accordingly deleted the disallowance so made by the Ld. AO, The Ld. DR could not point out any infirmity in the Ld. CIT(A)'s findings on this issue, warranting our interference. Therefore, this issue is decided in favour of the assessee. Ground no. 2 of this revenue's appeal is dismissed. Disallowance of interest expenditure invoking the provisions of section 36(1)(iii) - interest on loans and advances given to its subsidiaries - HELD THAT:- As explained that in the F.Y relevant to A.Y 2004-05 i.e. year under consideration, the assessee had acquired 25,000 shares of said company out of commercial exigency as the said company was also in the line of real estate projects and the said company had entered into J.V(Joint Venture) with its subsidiary for the development of a commercial center namely ' World Trade Center'. Since the said company had made investments in the said project and considering huge potential for the development of the said company, the assessee company invested in the said company and the assessee ultimately acquired the said company in F.Y 2007-08. It was explained that the said advances were made/invested for business purpose of the assessee. Moreover, the assessee has used loans for income on investments. The assessee had shown an interest income of ₹ 2.68 crores. CIT(A) considering the overall facts and circumstances of the case deleted the disallowance so made by the Ld. AO. No reason to interfere in the above well-reasoned order of the Ld. CIT(A) on this issue. Allowable business expenses - addition of Expenditure incurred in setting up and maintenance of Mumbai & Bangalore office - HELD THAT:- CIT(A) has categorically discussed that the above said expenditure was incurred by the assessee for up keeping and running of office of assessee at Mumbai/Bangalore, which was for business purpose. The Ld. CIT(A) has also disallowed certain expenditure, which was found to be capital in nature. We do not find any infirmity in the order of the Ld. CIT(A) on these issues. Undisclosed income added by the ld. AO on the basis of data base (AIR) information available in Form 26AS - assessee explained that the concerned deductor of TDS has wrongly mentioned the name of assessee whereas such income was never received by the assessee - HELD THAT:- CIT(A) considering the submissions of the assessee deleted the disallowance so made by the Ld. AO. Since the assessee has duly explained that the assessee has not received such commission and necessary evidences in this respect was also submitted such as the name of the party with whom said transactions were made by the concerned deductor. In view of this, we do not find any infirmity in the order of the Ld. CIT(A) on this issue and the finding of the Ld. CIT(A) on this issue is hereby upheld. Disallowance u/s. 14A on account of expenditure incurred for earning of tax exempt income - CIT(A) while decided this issue has observed that own funds of the assessee were much more than the investments made, therefore, the presumption would be that the assessee used its own funds for making this investments - HELD THAT:- CIT(A) has rightly deleted the disallowance made by the AO on this issue applying settled proposition of law. In view of above, we do not find any merit in ground no. 3 of this revenue's appeal
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