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2015 (5) TMI 895 - AT - Income TaxDisallowance on account of retention money - money retained by the various Government contractees out of the contract value till the establishment of specific performances as specified and issuance of taking over certificate - CIT(A) deleted the addition - Held that:- The issue involved is duly covered by the decision CIT -vs.- Simplex Concrete piles (India) Pvt. Ltd. [1988 (12) TMI 52 - CALCUTTA High Court] wherein held that the payment of retention money is d eferred and is contingent on satisfactory completion of the work and removal of defects and payment of damages, if any. Till then, there is no admission of liability and right to receive any part of the retention money accrues to the assesse - Decided against revenue. Disallowance of interest accrued upto end of the previous year on Government Bonds - CIT(A) deleted the addition admitting fresh evidences without giving the Assessing Officer an opportunity to examine the same - Held that:- The issue in this appeal is duly covered by the decision of Canara Bank [1991 (7) TMI 38 - KARNATAKA High Court] in which it was held that the interest ac crues or arises only on the record date or on the maturity date for the purpose of taxability. In the case of the assessee the interest on Bonds were payable on 31s t day of December and 30th day of June and, therefore, the interest for the period ended on 31s t March has not accrued and due to the assessee. In view of this fact, we do not find any infirmity or illegality in the order of the ld. CIT(Appeals).- Decided against revenue. disallowance invoking Rule 8D read with section 14A - CIT(Appeals) in rest ricting the disallowance to 1% of the dividend income - Held that:- Rule 8D has been inserted by the Income Tax (5t h Amendment ) Rules, 2008 w.e.f. 24th March, 2008. Hon’ble Mumbai High Court in the caes of Godrej & Boyce Mfg. Co. Ltd. -vs.- DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has clearly held that Rule 8D is not ret retrospective but prospective. The impugned assessment is the assessment year 2007-08 while Rule 8D has been inserted w.e. f. 24th March, 2008. Therefore, the Assessing Officer, in our opinion, is not correct in law in allowing the disallowance by applying Rule 8D. We further noted that in the case of Sanjiv Jajodia -vs. - DCIT [2010 (9) TMI 1026 - ITAT KOLKATA] has taken the view that the disallowance under sec tion 14A out of the expenses should be rest ricted only to 1% of the dividend income. Ld. CIT(Appeals) respec tfully following the said decision has rest ricted the disallowance to ₹ 1,36,794/-. In view of this fact, in our opinion, no interference is called for in the order of the ld. CIT(Appeals) in rest ricting the disallowance to 1% of the dividend income - Decided against revenue. Discrepancies found in the figures of sale disclosed in the return - CIT(A) deleted part addition - Held that:- CIT(Appeals) has duly examined the reconciliation made by the assessee along wi th the supporting documents and came to the conclusion that in respect of three parties, namely Steel Products Limited, Rukmani Elect ricals, and Unique St ructure amounting to ₹ 43,202/-, ₹ 21/-, ₹ 54,771/- respectively, documents are unreconciled. He, therefore, sustained the addition to that extent.D.R. before us even though vehemently relied on the order of the Assessing officer but could not brought to our knowledge how there is a mistake in the reconciliation as has been examined by the ld. CIT(Appeals), thus in our opinion, ld. CIT(Appeals) was justified in sustaining the addition as made by the Assessing Officer. - Decided against revenue. Disallowance on account of the insurance expenses - Held that:- when we asked the copy of the bill to prove that the deductions have been made towards the insurance expenses, the ld. A.R. expressed his inability to produce the same. In our opinion, when the assessee claims the expendi ture, the onus lies on the assessee to prove the genuinity of the expenses. In view of this fact, we do not find any infirmity or illegality in the order of the ld. CIT(Appeals) sustaining the addition - Decided against assesse. Disallowance of the commission payment - Held that:- Ld. A.R. even though vehemently contended that the commission paid by the assessee in the subsequent year has been allowed by the Assessing officer while determining the taxable income of the assessee, but he could not adduce any cogent material or evidence before us, which may prove that the commission has been paid by the assessee to the same very person. Even ld. A.R. could not adduce any evidence which may prove that the assessee has paid the commission to M/s. Kidar Sons Industries (P) Ltd. in respect of the services rendered by him. - Decided against assesse.
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