2023 (1) TMI 1006 - AT - Income Tax
Disallowance being 5% of various administrative expense claimed by the Appellant - expenses were not supported by the documentary evidences - Appellant submits that the above expenses are incurred wholly and exclusively for business purposes; hence, the disallowance thereof made by the AO shall be deleted - HELD THAT:- We note that for the AY 2009-10 and 2010-11 the Tribunal had declined to interfere in the order passed by the CIT(A) on this issue. The relevant extract of the decision of the Tribunal in the case of the assessee for the Assessment Year 2010-11 [2018 (1) TMI 1706 - ITAT MUMBAI] wherein as noticed that while deciding the issue of ad–hoc disallowance of 5% out of various expenses, the Tribunal did not interfere in the matter and upheld the disallowance. Following the order of the Tribunal, we uphold the disallowance by dismissing the ground raised by the assessee.
Disallowance u/s 14A - Appellant had offered suo moto disallowance u/s 14A - As contended on behalf of the Appellant that amount of interest paid to partners on capital should not be taken into consideration while computing disallowance u/s 14A - HELD THAT:- During the course of hearing the Ld. Authorised Representative for the Appellant had placed on record computation sheet showing disallowance computed as per the order passed by CIT(A) and had submitted that substantial relief would be granted in case the directions issued by the CIT(A) to include only income yielding investments is implemented. Accordingly, the Assessing Officer is directed to re-compute disallowance under Section 14A of the Act read with Rule 8D(2)(ii)/(iii) of the Rules by taking into account only the investments which yielded exempt income during the previous year relevant to the Assessment Year 2014-15. Accordingly, Ground raised by the Appellant are disposed off with the aforesaid directions.
Disallowance of interest Expenses - According to AO interest pertained to non-business activity and was, therefore, not allowable as deduction u/s 37 - since interest amount was already disallowed under Section 14A read with Rule 8D(2)(ii) of the Rules, the Assessing Officer disallowed the balance - HELD THAT:- CIT(A) has returned the findings that the Appellant has not placed any evidence in support of its claim that the loans and advances were given for the purpose of business other than the general submission that the same were given to builders as advance for staff accommodation and future business.
Appellant had filed before the AO/CIT(A) the details of society charged paid for accommodation of staff and for file storage as well as salary certificate of the employees wherein value of accommodation granted to the employees has been offered to tax as perquisite - Further, the Appellant had also filed details of depreciation claimed in respect of property allotted to office staff along with the reasons for providing such accommodation - The finding returned by the CIT(A), to this extent, are contrary to material on record. Therefore, we remand this issue back to the file of the AO for denovo adjudication keeping in view our findings hereinabove and after giving the Appellant a reasonable opportunity of being heard. In view of the aforesaid, Ground No. 3 raised by the Appellant is allowed for statistical purposes.