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2022 (1) TMI 339 - AT - Income TaxAddition on account of Client Code Modification - Addition on ground as assessee has shifted its profit to other clients or shifted loss to its sister concerns as alleged by the Special Auditors appointed by the Department - Assessee submitted that the assessee company is into such business wherein, various, i.e., more than thousands of orders are received and executed during the business hours of a single day and correspondingly the price of security/ shares etc., also fluctuates with every nano second, therefore practically it can be understood that, the punching of orders by the employees is always in a haste - CIT(A) deleted the addition on the ground that the volume of Client Code Modification occurred are within the permissible limit allowed by SEBI and the Exchange/SEBI has not found any violation of rules and regulations related to CCM and the CCM transactions are falling within the prescribed limit of less than 1% - HELD THAT:- We do not find any infirmity in the order of the CIT(A) on this issue. We find, identical issue had come up before the Tribunal in the case of group company, namely, M/s Jaypee Financial Services Ltd. [2019 (12) TMI 820 - ITAT DELHI] as held the assessee is not a member of any exchange and cannot execute CCM and the transactions on account of CCM done by the group concerns are not found to be false or untrue and since SEBI or the stock exchange has not taken any action treating the transactions to be non genuine and volume of CCM occurred are within the permissible limit allowed by the SEBI, therefore, we are of the considered opinion that there is no perversity in the order of the CIT(A) deleting the addition. Accordingly the same is upheld and the grounds raised by the revenue are dismissed. - Decided in favour of assessee. Addition u/s 36(1)(iii) on interest - Assessee could not establish that the interest bearing fund borrowed by it is wholly and exclusively used in business - assessee could not establish the diversion of interest bearing fund to Shri Gaurav Arora and M/s Arora Timber Ltd., free of interest - HELD THAT:- Since the facts of instant case are identical to the facts of the cases decided by the Tribunal in the case of sister concerns of the assessee [2020 (1) TMI 858 - ITAT DELHI], therefore, respectfully following the same, we uphold the order of the CIT(A) on this issue and the grounds raised by the Revenue are dismissed. Addition u/s 14A r.w. Rule 8D - HELD THAT:- It is an admitted fact that the assessee company has not earned any exempt income or dividend income during the year, a fact brought on record by the AO himself. It has been held by the Hon’ble Delhi High Court in the case of Cheminvest Ltd[2015 (9) TMI 238 - DELHI HIGH COURT] that in absence of any exempt income, disallowance under Section 14-A of the Act of any amount was not permissible. Also see MCDONALD'S INDIA PVT. LTD. [2018 (11) TMI 1057 - DELHI HIGH COURT] - Decided in favour of assessee. Deemed dividend addition u/s 2(22)(e) - advances in the nature of ‘loan and advance’ has been received by the assessee from M/s Jaypee Capital Services Ltd. and the assessee company has more than 10% shareholding in Jaypee Capital Services Ltd. - CIT(A) deleted the addition made by the AO holding that the transactions in the client ledger account are transactions entered in the ordinary course of business and are relating to sale/purchase of shares/currency/derivatives only - HELD THAT:- The account of the assessee is a running account, i.e., on every day there are transactions of receipt and payment and, therefore, the payments made against the business transactions are outside the purview of section 2(22)(e) - See SHRI GAURAV ARORA [2019 (3) TMI 1289 - ITAT DELHI] - The various decisions relied on by the ld. Counsel for the assessee also support his case to the proposition that the word ‘advance’ which is in the nature of money transacted to give effect to a commercial transaction would not fall within the ambit of the provisions of section 2(22)(e) of the Act. In this view of the matter and in view of the detailed reasoning given by the CIT(A) on this issue, we do not find any infirmity in his order. Accordingly, the same is upheld and the ground raised by the Revenue on this issue is dismissed.
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