TMI Blog2014 (6) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... ision for interest income and CIT(A) had rightly appreciated the facts - assessee had about Rs.12.77 crores of share capital and reserve at the close of the AY 2002-03 whereas the loan to Unitech Ltd. is only to the extent of Rs.8.05 crores - CIT(A) has rightly appreciated about surplus funds available with the assessee and has rightly deleted the addition - Regarding the addition of brokerage there was no force in the argument of revenue and CIT(A) has rightly appreciated the facts and allowed the relief – Decided against Revenue. - I.T.A. No.492/Del/2007, Cross Objection No.119/Del/2008 - - - Dated:- 23-5-2014 - Shri I. C. Sudhir And Shri T. S. Kapoor,JJ. For the Petitioner : Shri Gagan Sod, DR. For the Respondent : Shri G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee had advanced the amount of Rs.1,93,10,000/- to M/s DEIL out of money borrowed on which heavy amount of interest was paid. Therefore, he made the addition applying notional interest rate of 15% per annum. 3. The third addition ofRs.1,85,324/- was made by the Assessing Officer as he held that commission paid by the assessee was not justified as he observed that bills issued by the payees revealed that the commission was paid to them by M/s Unitech Ltd. and not by assessee. 4 Aggrieved with the order, the assessee filed appeal before Ld CIT(A). The Ld CIT(A) after going through the various submissions of the assessee allowed relief to the assessee by holding as under:- Regarding Ist addition: In the present case we see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the findings of Assessing Officer and also the contentions of the appellant furnished in the written submissions. I am convinced that the case law in the case of Wall Street Construction Ltd. v. JCIT 2006 is not applicable in this case because the investment was not in a project that has not come up for sale during the previous year under consideration. One important fact has been left to be appreciated that appellant has a share capital of Rs.11,00,01,000/- and reserve and surplus of Rs.2,70,79,906/- totaling to Rs.13,71,79,906/-. This huge amount on which no interest has been paid is sufficient enough to cover the advance given to DEIL for booking the units. This is also correct that neither interest on the amount borrowed was cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In view of these the two brokers namely Shri Vinay Jain and Shri RS Dhingra has issued the bills in the name of Unitech Ltd. But these are never charged to Unitech Ltd and had been provided only in the books of appellant company. When called for the appellant produced the books of accounts to show that the amount of brokerage of Rs.1,85,324/- was paid to Shri Vinay Jain and Shri RS Dhingra. This is also a fact that the appellant company had in agreement with Unitech Ltd. authorizing the Unitech Ltd to sale/transfer on behalf of the appellant company. The copy of the agreement is on the record. The name of Unitech Ltd. on the concerned bills makes no difference as the amount of brokerage was ultimately paid by the appellant company. The n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and it was submitted that agreement in the present case was not cancelled. The Ld AR further relied on the judgment of Hon'ble Supreme Court in the case of CIT v. Excel Industries Ltd. with the proposition that no tax can be levied on any hypothetical income and income becomes accrued only when it becomes due and it becomes liability of other parties to pay and the probability and improbability of realization is to be considered in a realistic manner. He further pointed out that it was laid down that the Assessing Officer must take a pragmatic view and should not adopt pedantic approach. In view of all these facts and circumstances the Ld AR argued that Ld CIT(A) has rightly appreciated the facts of the case and has rightly deleted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome which is uncertain did not make any provision for interest income and Ld CIT(A) had rightly appreciated the facts. Regarding second addition, we find that assessee had about Rs.12.77 crores of share capital and reserve at the close of the assessment year 2002-03 whereas the loan to Unitech Ltd. is only to the extent of Rs.8.05 crores. The Ld CIT(A) has rightly appreciated about surplus funds available with the assessee and therefore has rightly deleted the addition. Regarding third addition of brokerage we find no force in the argument of Ld DR and Ld CIT(A) has rightly appreciated the facts and allowed the relief. In view of the above, the appeal filed by the revenue is dismissed. 12. Regarding cross objection the Ld AR did not pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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