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2018 (9) TMI 1686 - AT - Income TaxDisallowance of expenses - genuineness of expenditure - dispute settled by Court of Arbitration - Held that:- Payments have been made through banking channel. From the details of expenses incurred by JBPL, exhibited elsewhere, it can be seen that all the payments have been made to Haryana Town and Planning Department. Thus, being statutory payments, their genuineness cannot be doubted. It would not be out of place to refer here that initially a dispute arose between the appellant and JBPL in relation to expenditure and the dispute was settled by Court of Arbitration, which held that this is the liability of the appellant-company, which has been discharged by JBPL. Interestingly, while framing the assessment in the case of JBPL for assessment year 2014-15, the Assessing Officer of JBPL has categorically held that expenses incurred by it has been reimbursed by the appellant company and hence the liability of JBPL seized to exist and the same is taxable u/s 41(1)(a) of the Act. The assessment order under consideration is dated 24.02.2014 and that of JBPL was framed on 29.12.2016 which means that it was passed subsequent to assessment order of the appellant company. The Assessing Officer of JBPL, while framing the assessment order in its case, has taken a clue from the arbitration award. The above facts clearly show that there was a liability of ₹ 53 crores which was discharged by the appellant company and claimed it as expenditure which it is lawfully entitled for. Both the lower authorities have grossly erred in not appreciating the facts in true perspective while making disallowance. Considering the facts of the case in totality, in our considered opinion, the assessee is entitled for deduction of ₹ 53 crores. We accordingly direct the Assessing Officer to allow the same. - Decided in favour of assessee Addition on account of failure by the assessee to prove the identity, credit worthiness and genuineness of the unsecured loans and advances received - Held that:- The undisputed fact is that the loan liability amounting to ₹ 2.66 crores is coming from earlier years and therefore, provisions of section 68 do not apply on the brought forward balances. In so far as unsecured loan of ₹ 1 crore is concerned, the same is received from another group Krrish Reality Ventures Pvt. Ltd which was also subjected search and whose assessment has also been framed by the same Assessing Officer and in its case, transaction has been accepted. Therefore, we do not find any reason to interfere with the findings of the ld. CIT(A). - Decided in favour of assessee
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