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2022 (8) TMI 189 - AT - Income TaxDisallowance u/s 14A - CIT(A) has restricted the disallowance to the amount of exempt income - HELD THAT:- We notice that the decision so rendered by learned CIT(A) is supported by the decision rendered in the case of M/s Marg Ltd [2020 (10) TMI 102 - MADRAS HIGH COURT]. Accordingly, we confirm the order passed by learned CIT(A) on this issue. Disallowance of yatch expenses - As assessee could not prove that these expenses are related to business carried on by it, hence, the Assessing Officer disallowed it - HELD THAT:- The only connection between the assessee and yatch expenses is the MOU claimed to have been entered by assessee with VPPL. However, it appears that the assessee has not furnished copy of MOU before the tax authorities. We are unable to understand as to how the assessee could share profit and loss through MOU. In any case, there should not be any doubt that it is the responsibility of the assessee, to prove that the MOU has created binding legal liability upon the assessee. Accordingly, in the interest of natural justice, we are of the view that the assessee may be provided with one more opportunity to present copy of MOU and explain its claim before learned CIT(A). Accordingly, we set aside the order passed by learned CIT(A) on this issue and restore the same to this file for adjudicating them afresh. Disallowance of travelling and car expenses - AO examined these expenses and came to the conclusion that certain expenses are not related to the business and further details relating to certain items were not furnished thus disallowed 10% of travelling expenses - HELD THAT:- Before us also, no detail was furnished by the assessee to contradict the findings given by the AO on the deficiencies discussed above. Accordingly, we have no other option, but to confirm the disallowance made by the AO on this issue. Addition of deemed rental income on unsold properties - AO noticed that the assessee is in possession of certain unsold finished flats accordingly, he assessed deemed rental income from those unsold flats - HELD THAT:- We notice that the assessee has relied upon a decision rendered in the case of C.R Developments (P) Ltd [2015 (5) TMI 1161 - ITAT MUMBAI] and also case of CIT vs. Neha Builders [2006 (8) TMI 105 - GUJARAT HIGH COURT] However, we notice that the Ld CIT(A) has confirmed the addition without discussing anything on the above said case laws. In our view, the Ld CIT(A) should have dealt with the above said case laws relied upon by the assessee before confirming the addition. Accordingly, we are of the view that this issue requires fresh examination at the end of Ld CIT(A). Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to his file for examining it afresh in accordance with law. Disallowance of depreciation on motor car - AO noticed that the assessee has shown three cars as its assets, but they stood in the name of three persons, who are employees of a sister concern - HELD THAT:- There should not be any doubt that for claiming depreciation on an asset, it has to be proved that the assessee is the owner of the asset. Merely disclosing an asset as its asset in its books of account will not be sufficient to prove the ownership. Hence, in the instant case, it is imperative for the assessee to prove that, it is in fact the owner of the vehicles, though they are standing in the name of some remotely connected persons. We notice that the assessee has not furnished enough details to prove ownership except stating that it is shown as its own asset in the books of accounts, which is not sufficient. Accordingly, we are of the view that the assessee may be provided with one more opportunity to prove ownership. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of Ld CIT(A) for examining it afresh.
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