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Case Laws
Showing 201 to 220 of 1429 Records
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2014 (2) TMI 1232 - ITAT AMRITSAR
Addition to rebate to the retailers - CIT(A) deleted the addition - Held that:- We concur with the findings of the ld. CIT(A) that the A.O. has failed to record any finding in the assessment order that the case of the assessee is akin to the provisions of section 145(3) of the Act. The arguments made by the ld. counsel for the assessee before the ld. CIT(A) are that the assessee furnished audited accounts/tax audit report alongwith books of account and bills/vouchers for purchase/sales of liquor and relating to expenses were produced for verifications. The details and basis of valuation of closing stock were placed on record during the course of assessment proceedings. The state excise and taxation department keeps strict control and supervision over the liquor trade carried out by the assessee. The purchases of liquor can be made by the assessee against the permits issued by the state excise department and similarly the sales of the liquor by the assessee to the retailers having 1-2 licenses can only be made against the permits issued by the State Excise Department. The AO failed to rebut the contention of the assessee that the net rebate of ₹ 16586467/- is a part of the trading results and also the gross profit. The AO has tried to make out a case that the above stated amount of ₹ 16586467/- is the income of the assessee as per his own version by twisting the contentions of the assessee in written reply filed during the course of assessment proceedings by recording the finding that “ a fact that emerges is that whether the rebate received by the assessee is ultimately passed in toto to the retailers as per the assessee’s won version as stated above or not” because the word in toto has been introduced by the AO but the counsel of the assessee did not use this word in the written reply. The details of rebate received from the sellers from whom the liquor was purchased and paid to the purchasers L-2 License holders to whom the liquor was sold, alongwith the supporting evidence was filed before the AO during the course of assessment proceedings and no defect was pointed out by the AO either during the course of the assessment proceeding or in the assessment order. No opportunity was allowed by the AO to the assessee before making the addition of ₹ 48,16,438/-.
The contentions of the AR of the assessee are factually correct and the AO has failed to point out any discrepancy in the books of account to justify his action of estimating the income of the assessee at ₹ 16586467/- as against the income of ₹ 11770029/- declared in the profit and loss account. - Decided against revenue
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2014 (2) TMI 1231 - ITAT MUMBAI
Registration granted to Assessee u/s. 12A cancelled - Held that:- It is not the case of the revenue before us that the dominant activities of the assessee are not fitting with the objects of the Council and that the dominant activities in the nature of trade, commerce and business or that the councils dominant activities have ceased to be for the purpose of advancement of any other objects of general public utility. Merely because the income of the assessee has crossed prescribed limit of ₹ 10 lakhs, that itself cannot be ground for cancellation of its registration invoking section 12AA(3) of the Act. If any of the income arising on the activities is not in accordance with the objects of the trust, the assessees income, at best, may not get the exemption under Section 11 of the Act. Further for the previous year, during which the gross receipt income crosses limit of ₹ 10.00 lacs, the trust will not get exemption or benefit of its being charitable in nature despite its carrying out charitable activities. However, it will get such benefit if it is registered as charitable institution and income from business activities, as mentioned in first proviso to section 2(15), does not cross limit of ₹ 10.00 lacs.
Subject to our above observations, the impugned order of the DI.T(exemptions) is hereby set aside and the registration to the assessee council granted under section 12A of the Act is hereby ordered to be restored - Decided in favour of assessee
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2014 (2) TMI 1230 - ITAT PUNE
Addition on account of royalty payment - Held that:- Liable to be considered as standard bought-out components are such material on which no further processing is required and are directly fitted into the final product; and, cost of such material only needs to be deducted from the sale price to compute the royalty payable. Applying the said clarification to the present situation, considering the manufacturing process explained, it cannot be construed that the so-called constituent material are merely fitted into the final product; on the contrary, it is a case where such material also undergoes a chemical reaction in the process of producing the final product and the same are irretrievable once the finished product is manufactured. For the said reason also, in our considered opinion, the so-called ‘constituent materials’ classified by the TPO cannot be equated to standard bought-out components so as to reduce their cost from the sales value to compute the royalty payable. For all the above reasons, we therefore find no justification on the part of the TPO in rejecting the methodology adopted by the assessee to calculate net sales for the purposes of computing the royalty payable.
TPO considering 5% rate of royalty payment on export sales as arm’s length price as against 8% paid by the assessee - Held that:- We hold that the TPO erred in (i) re-working the stated value of the international transaction of royalty payment based on his interpretation of the expression ‘Net Sales’ and, (ii) considering the royalty payment by TNAPC to the AE as a comparable transaction under the CUP method for the purposes of determining the arm’s length price of the international transaction of royalty payment claimed by the assessee. As a consequence the adjustment/addition of ₹ 91,66,061/- made in respect of royalty payment is directed to be deleted.
Addition on account of the international transaction on export of a product namely, Trigonox 25C75 to the AE - Held that:- The adjusted price of ₹ 300/- per kg., in our view, is liable to be taken as an arm’s length price in respect of export of Trigonox 25C75 to the AE instead of the stated price of ₹ 239/- per kg.. As a result, the addition of ₹ 11,34,000/- made by the TPO on this count shall be scaled down to ₹ 5,49,000/-. Accordingly, we direct the Assessing Officer to restrict the adjustment on account of international transaction of export to the AE to ₹ 5,49,000/- instead of ₹ 11,34,000/2-6. Thus, on this aspect, assessee partly succeeds.
Addition on international transaction relating to receipt on intending commission and marketing support fee - selection of comoarable - Held that:- Alfred - Ostensibly, the financial data reflects inconsistent results, and in the absence of any credible explanation for the inconsistencies, it has been rightly excluded from the list of comparables.
M/s IDC (India) Ltd. - assessee is justified in claiming that concern IDC (India) Ltd. be considered as a comparable for the purposes of benchmarking international transactions of Intending commission and marketing support fees
The nature of activity being performed by the assessee in its Marketing and Sales support Segment have already been noted and on that basis we uphold assessee’s plea for exclusion on ICRA Online Ltd. (Information Services Segment) for the purposes of benchmarking its international transaction of Intending commission and marketing support fee for the assessment year 2007-08. Accordingly, the TPO is directed to re-work the adjustment on account of the Marketing and Sales support Services segment by excluding ICRA Online Ltd. from the list of comparables
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2014 (2) TMI 1229 - ITAT MUMBAI
Transfer pricing adjustment - mam selected - CUP v/s TNMM - Held that:- As relying on earlier AY 2007-08 with regard to transfer pricing adjustment the appropriate method to be adopted was CUP in place of TNMM applied by the assessee. - Decided against assessee
Addition on account of transfer pricing adjustment without granting the benefit of volume, risk adjustments and other qualitative factors - Held that:- As on account of various factors which inter-alia include an element of bad debt risk involved in the case of three parties, which is much less probable in the case of related parties, the assessee was entitled to get discount of approximately 11%. . If the same is taken into consideration, according to the facts mentioned above, no addition on this issue will survive. The impugned addition is deleted. - Decided in favour of assessee
Addition on notional interest income on alleged delay in collection of invoices - Addition made on the ground that the average realization period from the AE exceeds similar period in respect of non-AE transaction - Held that:- As the assessee did not charge any interest on non-AE transactions and in some cases the realization period of non-AE transactions was more than the similar realization period of AE transactions, hence no addition was called for.- Decided in favour of assessee
Disallowance under section 14A - Held that:- It has been shown that assessee has its own sufficient funds which are sufficient to cover the investment from where the assessee has earned tax free income. Moreover, on the major portion of the interest the AO has accepted the submissions of the assessee in subsequent year, therefore, we are of the opinion that addition on interest component is not called for. We confirm the addition to the extent of ₹ 90,000/- and delete the addition of ₹ 10,34,917/- - Decided in favour of assessee partly
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2014 (2) TMI 1228 - ITAT AHMEDABAD
Penalty u/s.271C - non deduction of tds - Held that:- As per the provisions of Section 273B no penalty u/s.273C shall be imposable in case of failure referred in the said provisions if the assessee proves that there was reasonable cause for the said failure.
In the present case, the employer company has relied upon the provisions of Section 17(2) r.w.s 192 of the IT Act for the purpose that food allowance per meal ₹ 15 per day is exempted from tax and that employees were placed on remote areas; hence, not chargeable to tax. The assessee has pleaded that under bona fide belief it was decided that reimbursement of “canteen subsidy scheme” was not subject to TDS. We have noted that in the case of Muthoot Bankers, [2011 (9) TMI 638 - ITAT COCHIN ], it was held that no penalty is leviable if there is a bona fide omission in not deducting the tax at source. We have also examined the case laws as indicated by learned Sr.D.R. but considering the facts and circumstances of the case, those case laws are distinguishable on fact and law; hence, not helpful to the Revenue Department. Resultantly, we hereby affirm the view taken by learned CIT(A) and dismiss the ground of the Revenue. - Decided in favour of assessee
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2014 (2) TMI 1227 - ITAT MUMBAI
Rent receipts - income from business or income from house property - inseparable project - Held that:- Where the assessee is engaged in the business of commercial complex and commercial exploitation of the property, the income earned from such activities constitutes "business income" of the assessee. The separate agreement made providing services and amenities clearly shows the indication to render commercial services to the tenants. The agreement for hiring and agreement for the services and the facilities were inextricably linked with similar tenures. Giving space with services and facilities which were varied and wide and such activities together would definitely constitute an organized structure for making profits, and would necessarily constitute a business and the relationship between the parties as distinguished from that merely of a landlord and his tenant.
Occupation of space was inseparable from the provision of services and amenities as held by the ITAT in the case of Gesco Corp (P) Ltd (2009 (4) TMI 549 - ITAT MUMBAI ).
Further, providing amenities like electricity, telephone, watch and ward etc are the services rendered by the assessee result of its activities carried on continuously in an organized manner with a set purpose and with a view to earn profit. Hence, all the activities which are subject matters of both the agreements entered into by the asssessee for rendering of services and letting of the office space are in the nature of commercial activities and income derived by assessee from shopping malls / business centre was assessable as "business income" and not as "income from house property" as held by the ITAT, Calcutta in the case of PFH Mall & Retail Management Ltd ( 2007 (5) TMI 258 - ITAT CALCUTTA-A ) and the same view was taken by the ITAT Cuttack also in the case of Narayah Market Complex (2012 (4) TMI 467 - ITAT CUTTACK).
Thus we are of the opinion that the both the rental and service charges are inseparable and they should be treated as "business income" and not as "income from the house property‟ as held by the AO. Therefore, the decision of the CIT (A) in allowing the assessee‟s claim of depreciation on building by holding that the rental income was "income from business" is fair and reasonable and it does not call for any interference. - Decided against revenue
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2014 (2) TMI 1226 - ITAT CHANDIGARH
Deemed dividend u/s 2(22)( e) - Whether the Tribunal was right holding that the advance (rental) received by the assessee from the company in which he is a shareholder cannot be termed as a deemed dividend for the purpose of section 2(22)( e)? - Held that:- The company had agreed to pay an advance of ₹ 10 lakhs when it had taken the first floor on lease for the purpose of meeting the cost of construction of the other three floors and that the lease deed provided explicitly that the advance so paid was to be adjusted against the rent payable for the other three floors. The amount of rent payable for those floors was also set out in the further lease. The advance therefore was required to be set off against the rents payable in future years and thus adjusted. The amount at ₹ 10 lakhs paid was clearly as advance, though it was an advance which was to be set off against the rents payable in future. - Decided in favour of the Revenue and against the assessee.
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2014 (2) TMI 1225 - ITAT DELHI
Eligible profit u/s 10B - inclusion of export profits as claimed by the assessee - reveision u/s 263 - Held that: - Since the issue in question stands squarely decided in favour of the assessee by the ITAT Special Bench order in the case of Maral Overseas Ltd. (2012 (4) TMI 345 - ITAT INDORE ), which has not been disturbed by any superior authority, is binding on us. Respectfully following the same, we hold that on merits the assessee’s computation of eligible profit u/s 10B is to be allowed after including the export profits as claimed by the assessee. In view thereof, without going into technicalities of validity of sec. 263 we uphold the action u/s 263 and the issue on merits is decided in favour of the assessee
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2014 (2) TMI 1224 - ITAT MADRAS
Depreciation claimed by the trust - assessee is a trust registered u/s.12A - Held that:- The CIT(Appeals) followed the order of the Tribunal in the case of M/s. CMS Educational & Charitable Trust in [2013 (4) TMI 771 - ITAT CHENNAI] and allowed the appeal of the assessee placed reliance on the decisions of the Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Tiny Tots Education Society reported as [ 2010 (7) TMI 377 - Punjab and Haryana High Court ] and CIT Vs. Market Committee, Pipli reported as [2010 (7) TMI 374 - Punjab and Haryana High Court ], wherein it has been held that claim of depreciation do not result in double deduction. The CIT(Appeals) applied the ratio laid down in the case of CIT Vs. Vegetable Products Ltd., reported as (1973 (1) TMI 1 - SUPREME Court ) and decided the issue in favour of the assessee.
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2014 (2) TMI 1223 - ITAT CHENNAI
Disallowance of commission - non deduction of tds - amount paid by the assessee to non-resident agents outside India for the services rendered by them outside India - Held that:- The assessee had made payments to commission agents located in foreign countries. These foreign agents have rendered services in their respective countries and had received the commission. It is also evident that the foreign agents did not have any PE in India and there was nothing brought on record to show that the agreements between the assessee & the commission agents were entered in India.
In these circumstance the decision rendered in the case of Toshoku Ltd. (1980 (8) TMI 2 - SUPREME Court ) is squarely applicable wherein held that the commission agents, who are engaged in the services executed outside India, cannot be considered to carry on any business operations in India and therefore, provisions of section 9(1)(i) of the Act and Explanation-1A will not be applicable.
Similarly, in the case of GE India Technology Cen. (P.) Ltd (2010 (9) TMI 7 - SUPREME COURT OF INDIA) has held that the expression "chargeable under the provisions of the Act in Sec.195(1)" shows that the remittance has to be of trading receipt, the whole or part of which, is liable to tax in India. If tax is not so assessable, there is no question of tax at source being deducted. - Decided in favour of assessee
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2014 (2) TMI 1222 - ITAT MUMBAI
Transfer Pricing adjustment - Retention of Zenith Infotech Ltd. as comparable company - Not granting an opportunity to the assessee with regard to acceptability of additional comparables and Internal TNMM - Held that:- Having heard the rival submissions and perused the orders of the lower authorities and the relevant material evidence brought on record in the light of the Rule 18(6) of the Income Tax Appellate Tribunal Rules 1963, in our understanding of law, internal TNMM should get precedence over the external TNMM comparables.
In the interest of justice and fair play, we restore this issue back to the files of the TPO. The TPO is directed to consider the internal comparable TNMM. The assessee is directed to provide necessary details to the TPO. Being fair to both parties, we allow the assessee to bring forth additional comparables and direct the TPO to accept/reject the same after necessary examination/verification as per the provisions of law. - Decided in favour of assessee for statistical purposes.
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2014 (2) TMI 1221 - CESTAT BANGALORE
Painting of individual houses / flats - Works contract services - Appellant paid service tax on painting of commercial complex and residential complexes but did not paid in respect of individual houses / flats - composite contract - State of VAT has been discharged on all the painting activities including individual flats - Circular No. B1/6/2005/TRU, dated 27-7-2005 - Held that:- the most important and crucial aspect to be decided is whether painting of a building amounts to repair or maintenance. On the one hand learned counsel would submit that it amounts to repair because if the painting is not proper, cracks can develop and there can be water seepage etc. Moreover, renovation or restoration is also covered and the definition also used the word “similar services”. There could be a view that painting can be covered under renovation and restoration also as far as the walls of the building are concerned.
The stand taken by the assessee that the assessee is liable to pay Service Tax treating the painting activity as a works contract cannot be found fault with at this stage subject to detailed consideration at the time of final hearing and therefore a case has been made out for waiver. - Stay granted.
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2014 (2) TMI 1220 - RAJASTHAN HIGH COURT
Reopening of assessment - disallowance of development expenses - Held that:- In the present case, apparent it is that all the facts relating to the debited expenses of ₹ 87,35,400 on account of development expenses were stated in the P&L a/c wherein, a sum of ₹ 35,00,000 was taken to the balance-sheet as provision for project development. All the facts were definitely available before the AO at the time of framing of the original assessment order. A look at the reasons recorded by the AO for the purpose of reopening makes it clear that the observations were made as if the successor AO was sitting in appeal over the original assessment order dt. 19th Dec, 2008; and it was sought to be suggested as to what was meant by a 'known liability' and as to whether the provision made on the basis of the quotations would qualify for liability or not. If was suggested that this amount, being not an expenditure, should have been added to the total income. It was further suggested that ₹ 33,48,915 was debited to the registration and stamp charges and sale of plot though registration charges are generally borne by the purchaser and not by the seller. Hence, according to the AO, these expenses were wrongly claimed by the assessee.
Evidently, all the observations by the successor AO were only of the expression of another opinion on the same set of facts. In the given circumstances, the Tribunal cannot be faulted in finding that the reassessment was based only on change of opinion and hence, unsustainable. - Decided in favour of assessee.
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2014 (2) TMI 1219 - ITAT MUMBAI
Penalty levied u/s 221(1) - Penalty payable when tax in default - Held that:- On examination of the entire gamut of circumstances, the fact that the assessee cleared its tax, interest and balance interest dues, leaving not even a rupee outstanding in dues, much before the AO triggered the penal provisions only goes to prove the assessee's fair intention.
The fact that the assessee not being a habitual defaulter with no adverse history tainted on him goes to prove that the default was committed by it without any mala fide intention and under extreme dire circumstances.In these circumstances, we cannot subscribe to the views of the revenue authorities and sustain an action which is strictly technical. We, therefore, set aside the impugned order of the CIT(A) and direct the AO to cancel the penalty levied u/s 221(1) of the Income Tax Act. - Decided in favour of assessee
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2014 (2) TMI 1218 - GUJARAT HIGH COURT
Interest charged under section 234D - Retrospectivity - ITAT cancelling the interest charged - Held that:- Explanation (2) to section 234D of the Act has been made applicable to even the assessment year commencing before June 01, 2003. The only requirement in such a case would be that the assessment has to be completed after June 01, 2003. Therefore, after insertion of Explanation 2, the operation of section 234D of charging interest on the excess refund paid to the assessee is not restricted, making operation of such section effective from June 01, 2003.
This very issue came up for scrutiny before the Bombay High Court in the case of CIT v. Indian Oil Corpn. Ltd. [2012 (9) TMI 517 - BOMBAY HIGH COURT] has held that addition of explanation (2) to section 234D of the Act by Finance Act, 2012, with retrospective effect from June 01, 2003, is made applicable even to the period under assessment year 2004-2005. In respect of excess refund granted to the assessee under section 143(1) of the Act, the interest was payable by the assessee even if it was received prior to June 01, 2003, so long as the proceedings of the concerned assessment year for which the refund was granted was completed after June 01, 2003.
We have respectfully chosen to follow the aforesaid decision of the Bombay High Court and, therefore, the order of the Tribunal in the instant case following the decision the case of Ekta Promoters (P.) Ltd. (2008 (7) TMI 452 - ITAT DELHI-E ) holding the provision of section 234D of the Act applicable only with effect from 2004-2005 and further holding that the interest under this section is not chargeable for earlier assessment years, even though the assessment has been framed after June 01, 2003, is not held to be a correct law and, accordingly, the Revenue's appeal deserves to be allowed.
Answering the substantial question of law in favour of the Revenue that in all those matters where excess refund has been granted by the Revenue, the provision of section 234D of the Act will apply and even in the case of earlier assessment years where the assessments were framed after June 01, 2003, the interest will be chargeable in accordance with law - Decided against assessee
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2014 (2) TMI 1217 - ITAT AHMEDABAD
Addition u/s 69A - CIT(A) deleted the addition - Held that:- There is no dispute about the fact that in the immediate preceding year AO has made the addition by applying peak credit theory in respect to the cash deposit in the same bank account and there was no change of circumstances during the year under appeal, therefore we feel that Ld. CIT(A) was justified in directing the AO to follow the same theory of peak credit while quantifying the undisclosed income of the assessee. Therefore we are not inclined to interfere with order passed Ld. CIT(A) and the same is hereby upheld. - Decided against revenue
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2014 (2) TMI 1216 - ITAT KOLKATA
Entitlement for the benefit of sub-section 6 of section 115JB to assessee to be a Special Economic Zone - whether assessee, functioning from Falta Export Processing Zone, admittedly a Software Technology Park, was eligible for claiming the benefit of sub-section 6 of section 115JB? - Held that:- A reading of the sub-section 6 of section 115JBwould clearly show that section 115JB will not apply to a business carried on by an entrepreneur or a Developer in a Unit or Special Economic Zone. The Sub-section does not say that the Unit has to be functioning from a Special Economic Zone. The word ‘Unit’ has not been defined under the Income Tax Act. Disjunctive expression ‘or’ has been used by the legislature between the words unit and Special Economic Zone. Implication can only be that there is no condition that a unit has to function in an SEZ for claiming the benefit of sub-section (6). Since sub-section 6 of section 115JB of the Act was inserted by Special Economic Zone, 2005, the meaning of the term ‘Unit’ given in the said Act will, in our opinion, be relevant since such word is not defined in the Income Tax Act.
The necessity to have a physical location inside an SEZ is not essential for applying the exclusionary clause of sub-section 6 of section 115JB of the Act. One of the grounds taken by Revenue says that assessee has not claimed any exemption under section 10AA of the Act for applying Section 6 of Section 115JB of the Act. We do not find any such requirement in sub-section 6 of section 115JB of the Act. Assessee was also governed by the same Rules as applicable to the Special Economic Zone and reported to the same authority mentioned under the Special Economic Zone. Therefore, ld. CIT(Appeals), in our view, was right in holding that assessee was eligible to claim the benefit of sub-section 6 of section 115JB of the Act. - Decided in favour of assessee
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2014 (2) TMI 1215 - ITAT MUMBAI
Transfer pricing adjustment - whether in case of availability of internal CUP method, TNMM could not be applied as per CIT(A) - Held that:- We are in agreement with the observations of Ld. CIT(A) that in case of availability of internal CUP method, TNMM could not be applied. What was necessary was that assessee should have been allowed the relief as per difference in the activities in the services rendered by it to related and unrelated parties. The said difference has been described in the tables submitted by the assessee to the TPO vide letter dated 29/11/2004. However, TPO did not discuss those figures in his order but these figures are discussed in the order of Ld. CIT(A). The TPO did not point out any defect in such calculation of the assessee. It has been described in the above submission that assessee had to incur additional cost to the tune of 0.29% in relation to services rendered by it to unrelated parties when the same is compared to the similar services rendered to the related parties. In view of these facts, we are of the opinion that Ld. CIT(A) was right in granting relief to the assessee and we decline to interfere in his findings on this issue.- Decided in favour of assessee
Disallowance under section 14A - CIT(A) deleted the entire addition - Held that:- Respectfully following the order of the Tribunal in assessee’s own case for A.Y 2001-02, we hold that ₹ 10,000/- should be disallowed under section 14A of the Act. Accordingly this ground of the revenue is partly allowed.
Disallowance in respect of Club Membership Fees - CIT(A) deleted the entire addition - Held that:- This issue is covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of CIT vs. United Glass Manufacturing Co. [2012 (9) TMI 914 - SUPREME COURT] holding that club membership fees for employees incurred by the assessee is business expense under Section 37 - Decided in favour of assessee.
Addition considered as capital in nature in respect of software, support services, repairs and maintenance - CIT(A) deleted the entire addition - Held that:- Similar disallowance was allowed in respect of assessment year 2001-02 to held that such expenditure was revenue expenditure.- Decided in favour of assessee.
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2014 (2) TMI 1214 - ITAT CHANDIGARH
Clubbing of Income - whether Punjab Timber Trading Company is a bogus proprietary concern? - Held that:- In the case before us, it has not been shown that any material was being purchased form M/s Punjab Plywood Industries or any amount has come from that firm. It is also not brought on record that business was conducted from the same premises. It is only on the statement recorded during the search where Smt. Meena Garg i.e the assessee has said that she was not running any business concern in the name of M/s Punjab Timber Trading Co but later on in respect of question No. 24, during the assessment proceedings she clearly stated that she was confused and nervous. Question No. 24 and its answer reads as under;-
“Q24. In the statement recorded on the date of search you have specified that you are not filing any return of income or have any business concern. Please clarify as to why you had stated so when today you are doing timber business.
Ans. I denied doing any business as I was nervous and thought the questions being asked related to my husband’s business.”
Every person during the search sometimes nervous. Further, we find that Revenue has not shown whether any capital has moved from Punjab Plywood Industries to M/s Punjab Timber Trading Company. In the absence of such nexus, there is no provision to hold that the firm i.e. M/s Punjab Timber Trading Co run by the assessee was ‘benami’ of M/s Punjab Plywood Industries. Therefore, we set aside the order of Ld. CIT(A) and hold that M/s Punjab Timber Trading Company is not a bogus proprietary concern. - Decided in favour of assessee.
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2014 (2) TMI 1213 - ITAT MUMBAI
Unexplained investment taxable u/s. 69 - CIT(A) deleted the addition - Held that:- We find that the FAA has given a categorical finding of fact that the property was not owned by the assessee in the year under consideration, whereas order of the AO is silent on this issue. DR could not controvert the fact narrated by the FAA. From the accounts of the assessee it is clear that amount in question was opening balance for the year under appeal. Therefore, no addition could have been made for the year. We are of the opinion that the order of the FAA does not suffer from any infirmity - Decided in favour of assessee
Addition made u/s. 23 - CIT(A) deleted the addition - Held that:- As assessee did not own three properties as alleged by the AO. As the order of the AO is not based on facts and the FAA has decided the issue considering the factual position, so confirming his order we decide ground no. 2 against the AO.
Deemed dividend u/s. 2(22)(e) - Held that:- Advance received by the assessee for purchase of flat could not be treated deemed dividend. We find that in the matter before us, amount received by the assessee was meant for purchasing a flat. Therefore, respectfully, following the order of the coordinating bench in the case of wife of the assessee, Mrs. Amisha B Koradia we reverse the order of the FAA and decided ground no. 1 in favour of the assessee.
Disallowance of interest - Held that:- There is no dispute about the fact that the assessee has overdrawn from the partnership firm M/s Sagar Construction; therefore, the interest paid to the Sagar Construction for the debit balance in the capital account is an allowable expenditure against the business income of the assessee and particularly against the interest/remuneration received from the partnership firm. - Decided in favour of assessee.
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