TMI Blog2012 (9) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of royalty payment covered u/s 194J and resultantly disallowance u/s 40(a)(ia) is called for - Decided against assessee Loan to relatives without Interest - held that:- As no nexus between the interest bearing loans and its utilization for the purpose of profession was shown, the A.O. disallowed proportionate interest attributable to interest free deposit of loan as being not wholly and exclusively for profession. - Decided in favor of revenue. - ITA No.2707/Mum/2012 - - - Dated:- 6-7-2012 - Shri R.S.Syal and Shri Amit Shukla, JJ. Appellant by : Shri Rajeev Khandelwal Respondent by : Shri Subachan Ram (CIT-DR) ORDER Per R.S.Syal, AM : This appeal by the assessee arises out of the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(1)(vi). Further in the absence of the assessee having made any deduction of tax at source u/s 194J, the Tribunal upheld the disallowance u/s 40(a)(ia). The learned Counsel for the assessee fairly admitted at the very outset that the facts of the current year are similar to those of preceding year. However, he submitted that the Tribunal was wrong in treating this amount as royalty and consequently making disallowance u/s 40(a)(ia). He argued that the order passed by the Tribunal was per incuriam and liable to be ignored. The main emphasis of his submissions was that the said amount could not be considered as royalty and consequently there was no question of deduction of tax at source or any disallowance u/s 40(a)(ia). On a pertinent query ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of more members. Doubting the correctness of the earlier view is only an exception and not a rule. Adverting to the facts of the instant case we are not convinced with the submissions advanced on behalf of the learned AR in an attempt to persuade us to deviate from the view of the Tribunal in the preceding year. It is a case in which the tribunal originally decided the issue against the assessee. Thereafter, two miscellaneous applications filed by the assessee met with the fate of dismissal. Now if the assessee is still aggrieved against such order of the Tribunal, it has got legal remedies available with it to appeal to the Hon ble High Court. In so far as the forum of the tribunal is concerned, this issue cannot be reviewed. In our consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s personal practice with return of income. The assessee was called upon to file the copy of income and expenditure account, personal capital account and balance sheet, which the assessee failed to file. On the perusal of the return of income for assessment year 2007-2008, it was observed that the assessee had disclosed loan liability at Rs.76.24 lakh and loans and deposits of Rs.11.55 lakh to assessee s relatives. Such loan of Rs.11.55 lakh was given without interest for non-business purposes. As no nexus between the interest bearing loans and its utilization for the purpose of profession was shown, the A.O. in the assessment order for assessment year 2007-2008 disallowed proportionate interest of Rs.72,963 attributable to interest free dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one expenses as well. The learned CIT(A) upheld the disallowance. 9. Having heard the rival submissions and perused the relevant material on record it is seen that similar disallowance was made in the preceding year as well which was accepted by the assessee. It is not a case as if the disallowance has been made without there being anything adverse against the assessee. It is an admitted position that the assessee did not maintain any log book to show that the car was used for business purposes. Similar position prevails in respect of telephone expenses as well. The contention of the learned AR that in no case 20% of depreciation on account of motor car can be disallowed, is devoid of merit. Section 38(2) dealing with the disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which deduction has been claimed in the current year on the payment of tax. The claim of the assessee for deduction in the current year for the said amount of Rs.2,50,000 and Rs.1,22,845 is based on the fact that the same was disallowed for assessment year 2007-2008 because of the late deposit of tax u/s 40(a). In principle, we agree with the argument advanced that if in the preceding year these amounts were disallowed u/s 40(a) due to non deduction/payment of tax at source and in the current year the tax has been paid, the assessee should be entitled to deduction. However the challan now sought to be filed before us was not there before the AO or learned CIT(A). In our considered opinion, it will be just and fair if the impugned order on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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