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2021 (1) TMI 774 - AT - Income TaxComputation of income/profit - not excluding sales and corresponding profit thereon in computing the total income as per normal provisions as well as u/s 115 JB - HELD THAT:- The issue involved for this assessment year is directly and substantially involved for the assessment year 2007-08 and there is no change is in facts or in law, we find it difficult to take a different view that was taken for the assessment year 2007-08. Ld. CIT(A) dealt with this issue in extenso to reach a conclusion that the starting point for computing of the profits is the audited financial statement as prepared under the Companies Act, which is subject to further additions/deductions in terms of various upward and downward adjustments provided in various clauses of explanation given below subsection (2) of section 115 JB of the Act, and such a finding is well fortified by the findings of the Tribunal in assessee’s own case for the assessment year 2007-08.Findings of the Ld. CIT(A), therefore, cannot be found fault with and are to be confirmed. Addition u/s 2(22)(e) - deemed dividend - loan advanced by RSML to the assessee and Mr. Sanjiv Arora is a common shareholder holding substantial interest in both the companies i.e., RSML and the assessee - HELD THAT:- Shareholding pattern of the assessee during the relevant previous year, a perusal of which reveals that Mr. Arora merely held 1633632 equity shares in the assessee, which constitutes merely 14.09 % of the total voting power, and therefore, Mr. Arora did not hold 20% of the voting power in the assessee and consequently, the assessee cannot be regarded as a company in which Mr. Arora has substantial interest. We, therefore, find that the relationship as contemplated in section 2(22)(e) of the Act, to apply the mischief of the said section is not at all satisfied in the facts of the present case. Thus the provisions of section 2(22)(e) of the Act are not at all attracted in the present case since the assessee was not a concern in which any of the shareholders of RSML had substantial interest. Disallowance u/s 14A read with Rule 8D - HELD THAT:- There is no dispute that during the relevant previous year, the assessee did not earn any exemptdividend income from investments held in subsidiaries. When no exempt income is actually earned by an assessee from investments held during the year, no portion of expenses incurred during the year can be disallowed under section 14A of the Act - we are of the considered opinion that where there is no dispute of fact that no dividend has been earned by the assessee during the year, no disallowance is called for under section 14 A - Decided in favour of assessee. Disallowance of foreign travel expenses - CIT-A upholding disallowance on the ground that the said expenditure was incurred for foreign travel for personal purposes - HELD THAT:- As factually the assessee failed to establish the nexus between the travel and the business purpose for this year and, therefore, we do not find any ground to interfere with the findings of the Ld. CIT(A) on this aspect. While upholding the findings of the Ld. CIT(A), we dismiss Ground No. 1 of assessee’s appeal.
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