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2015 (9) TMI 279 - ITAT PUNE

2015 (9) TMI 279 - ITAT PUNE - TMI - Addition invoking Ss. 36(1)(iii) and 40A(2)(b) - Held that:- As decided in assessee's own case [2015 (7) TMI 361 - ITAT PUNE] there is no question of disallowance of interest on account of interest free advances given to related parties. It is a reverse case wherein the assessee has obtained the loan from related parties by paying exorbitant rate of interest for which the Assessing Officer disallowed the excess interest paid to the related parties by invoking .....

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had admitted that it has incurred certain expenses although the same is negligible which cannot be correctly ascertained and since certain additions were made during A.Y. 200607 and 200809 by the Assessing Officer u/s.14A and nothing has been brought on record as to the outcome of the same including the quantum, therefore, we do not find any infirmity in the order of the CIT(A) upholding the disallowance made u/s.14A r.w. Rule 8D for the impugned assessment year. - Decided against assessee. < .....

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diture. We therefore uphold the order of the CIT(A) on this issue and the ground raised by the assessee is dismissed. - Decided against assessee.

Adhoc disallowance of various expenses - Held that:- We direct the AO to restrict such disallowance to 5% of the expenses claimed as against 10% disallowed by him and upheld by the CIT(A) - Decided partly in favour of assessee. - ITA No. 518/PN/2014 - Dated:- 21-8-2015 - SHRI R.K. PANDA AND SHRI VIKAS AWASTHY, JJ. For The Appellant : Shri M .....

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the Act without passing a 'speaking order' by properly dealing with the arguments of the appellant and solely relying on the A.O.'s version for A. Y. 200910. Since the invoked provisions of S. 36(1)(iii) & 40A(2)(b) are not applicable to the facts of the case the addition confirmed by CIT(A) be deleted. 2) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the addition made by the A.O. invoking the provisions of S. 36(1)(iii) r.w .....

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n the return itself exceeds the amount of loans paid to persons covered by S. 40A(2)(b). In view of the statutory presumption advances/loans were presumed to have been given out of the current income of the year on which tax is already paid which goes to build up the interest free funds. The addition of ₹ 33,37,059/is unwarranted and it be deleted. 3. The Ld. Counsel for the assessee at the outset submitted that the above grounds are decided against the assessee by the decision of the Trib .....

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the Tribunal in assessee s own case vide ITA No.849/PN/2013 order dated 11082014 for A.Y. 200910 has decided the issue by observing as under : 6. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer disallowed an amount of ₹ 33,37,059/being excess interest paid to the Directors, .....

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offered the same to tax in writing and by giving the individual details for calculating the disallowance the assessee is now agitating on the ground that there was misconception of law. 6.1 In our opinion, it is not a legal issue and is purely a factual issue. The Assessing Officer had clearly brought on record the rate of interest paid to outside creditors at 9%, to the banks at 14.75% and 21% paid to the related parties. Since there was huge difference between the rate of interest paid to the .....

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the Ld. Counsel for the assessee challenging the disallowance of addition of ₹ 33,37,079/. 6.2 So far as the decisions relied on by the Ld. Counsel for the assessee are concerned, none of the case relates to a situation where the assessee having offered for taxation of the excess amount of interest has got relief. No doubt, the banks ask lot of formalities for sanctioning of loan which are not required for loans obtained from private parties. However, in the instant case, the assessee has .....

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r in excess of the loans advanced to persons covered u/s.40A(2)(b). In the instant case, there is no question of disallowance of interest on account of interest free advances given to related parties. It is a reverse case wherein the assessee has obtained the loan from related parties by paying exorbitant rate of interest for which the Assessing Officer disallowed the excess interest paid to the related parties by invoking the provisions of section 40A(2)(b) of the I. T. Act. Since the assessee .....

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Tribunal in assessee s own case for A.Y. 2009-10 as well as A.Y. 2010- 11 the above grounds by the assessee are dismissed. 6. Ground of appeal No.4 by the assessee reads as under : 4) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the disallowance made by A.O. of ₹ 93,288/resorting to provisions of S.14A r.w.r. 8D of the I. T. Rules, 1962. There is no finding to the effect that any expenditure was incurred for earning the exempt dividen .....

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r earning this income before claiming the exemption. On being questioned by the AO it was submitted that no expenditure has been incurred for earning this income. Following the order of his predecessor for A.Y. 2009-10 and applying the provisions of section 14A r.w. Rule8D the AO disallowed an amount of ₹ 1,07,291/- (wrongly taken in the grounds as ₹ 93,288/-). In appeal the Ld. CIT(A) upheld the action of the AO. 8. Aggrieved with such order of the CIT(A) the assessee is in appeal b .....

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he Tribunal in assessee s own case for the A.Y. 200910. The Tribunal vide ITA No.849/PN/2013 order dated 11082014 has dismissed the grounds raised by the assessee by observing as under : 10. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. From the copy of the assessment order, we find on being questioned by the Assessing Officer to explain as to why proportionate disallow .....

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s. 200607 and 200809 by the Assessing Officer and nothing was brought to our notice as to the outcome of such disallowance made by the Assessing Officer. The relevant observations of the Assessing Officer at para 4.2 and 4.3 of the assessment order read as under : 4.2 Since the explanation of the assessee as above was not acceptable in pursuance to the provisions of section 14A of the Act rwr 8D of the I, T. Rules, 1962, and further that disallowance was made in this regard in the assessment ord .....

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penses for exempted income (i.e. Dividend)". 4.3 In response to the above, the assessee company , vide submission dt. 12/09/2011, in Sr. No. 11, the assessee company replied as under: "11. Regarding the disallowance of interest on share application money, I would like to state before your honour that, the share application . money paid for IPO's of various companies remain with those companies for a very short period, and dividend if any received on the shares allotted from such co .....

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e certain additions were made during A.Y. 200607 and 200809 by the Assessing Officer u/s.14A and nothing has been brought on record as to the outcome of the same including the quantum, therefore, we do not find any infirmity in the order of the CIT(A) upholding the disallowance made u/s.14A r.w. Rule 8D for the impugned assessment year. The case decision relied on by the Ld. Counsel for the assessee is of no help to it in absence of giving full details and to explain as to how the said ratio is .....

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the Tribunal in assessee s own case and in absence of any contrary material brought to our notice the order of the CIT(A) on this issue is upheld and the ground raised by the assessee is dismissed 12. Ground of appeal No.5 by the assessee reads as under : 5) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in disallowing an amount of ₹ 2,53,759/out of foundation day expenses of ₹ 12,68,794/being excessive and the addition of ₹ 2,53,759/be d .....

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on of 50 years since the inception of the company. The company had conducted a Golden Jubilee ceremony during the year under consideration. The details of the same are enclosed herewith for your honour kind perusal . 14. During the course of assessment proceedings, the AO further noted that the expenditure amount appears to be on the higher side for which he asked the assessee as to why 20% of such expenses should not be disallowed. Since the Authorised Representative of the assessee agreed for .....

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to show that there was no acceptance by the assessee for such offer or the assessee was in possession of relevant bills and vouchers justifying such expenditure. We therefore uphold the order of the CIT(A) on this issue and the ground raised by the assessee is dismissed. 16. Ground of appeal No.6 by the assessee reads as under : 6. On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the adhoc disallowance of ₹ 1,32,400/on account of various .....

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re that the entire expenses under this head were incurred for the purpose of business. The AO accordingly disallowed on adhoc basis of such expenses and thus made addition of ₹ 1,32,400/-. In appeal the Ld. CIT(A) upheld the action of the AO for which the assessee is in appeal before us. 18. After hearing both the sides, we find the Tribunal in assessee s own case in the immediately preceding assessment year following the order for A.Y. 2009-10 restricted such disallowance to 5%. The relev .....

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