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2015 (9) TMI 1228 - ITAT PANAJI

2015 (9) TMI 1228 - ITAT PANAJI - TMI - Disallowance u/s 14A r/w rule 8 - CIT(A) deleting part of the addition - Held that:- As perused the Balance-sheet of the Assessee it is noticed that the investments are carry forward investments right from 2008-09. There is no new investment during the relevant assessment year. The assessment order for the A.Y 2008-09 was also found which also says there is no disallowance made u/s 14A. Further, it is noticed that the Assessee does not have any exempt inco .....

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actually reduced during the relevant assessment year when compared to the earlier assessment year, it shows that these advances were of the earlier years and substantial portion of the advances have been returned. Admittedly, there is no disallowance on this count in the earlier year also. In the circumstances, following the principles of consistency, no disallowance can be made for this year also in view of the decision of the Hon'ble Karnataka High Court in the case of Sridev Enterprises [1991 .....

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rcumstances, we are of the view that the finding of the ld. CIT(A) was on a right footing and does not call for any interference. - Decided in favour of assessee.

Addition on account of taxing of profits on the basis of percentage completion method on the construction of villas - Assessee was booking profits of villas by following the completed contract method - CIT(A) in deleting the addition - Held that:- CIT(A) has followed the decision of V.S. Dempo & Co. Pvt. Ltd. [1993 (9) TMI 3 .....

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ssessee. - ITA Nos. 321 & 426/PNJ/2014, CO No. 43/PNJ/2014 - Dated:- 9-7-2015 - N. S. Saini, AM And George Mathan, JM,JJ. For the Appellant : Sandip Bhandare, CA For the Respondent : B Balakrishna, Ld. DR ORDER Per : George Mathan 1. ITA No. 321/PNJ/2014 is an appeal filed by the Revenue against the order of ld. CIT(A), Hubli in ITA No. CIT(A)487/HBL/2011-12/AY 2009-10 dt. 30.5.2014 for the A.Y 2009-10 and CO No. 43/PNJ/2014 is the Cross objection filed by the Assessee in the Revenue's app .....

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/w rule 8D. It was the submission that the Assessee had made investment in shares by using borrowed funds. It was the submission that the investment was to the extent of ₹ 10.77 crores. It was the submission that the AO had made disallowance u/s 14A and the same was reduced by the ld. CIT(A). It was the submission that the order of the ld. CIT(A) was liable to be reversed. 3. In reply, the ld. AR submitted that the Assessee did not have any dividend income much less exempt income which cal .....

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ase of Winsome Textiles Industries Ltd. reported in 319 ITR 204. It was the submission that no addition itself was called for in the hands of the Assessee u/s 14A. 4. We have considered the rival submissions. We have also perused the Balance-sheet of the Assessee found at pages 59 to 69 of the paper book. It is noticed that the investments are carry forward investments right from 2008-09. There is no new investment during the relevant assessment year. The assessment order for the A.Y 2008-09 was .....

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sallowance u/s 14A can be made in the hands of the Assessee. Consequently, ground no. 2 of the Revenue's appeal stands dismissed. 5. In respect of ground no. 3, it was submitted by the ld. DR that the issue was against the action of ld. CIT(A) in deleting the disallowance of expenditure of interest paid on loans taken at interest and advances to sister concerns without charging any interest. It was the submission that the ld. CIT(A) had deleted the same. It was the submission that that the o .....

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val submissions. As it is noticed that the advances to the associates has actually reduced during the relevant assessment year when compared to the earlier assessment year, it shows that these advances were of the earlier years and substantial portion of the advances have been returned. Admittedly, there is no disallowance on this count in the earlier year also. In the circumstances, following the principles of consistency, no disallowance can be made for this year also in view of the decision o .....

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ng interest on borrowed funds ranging from 18% to 24% to the partners, relatives and persons who are covered u/s 40A(2) of the Act whereas the interest paid to the bank was below 18%. It was the submission that consequently the AO had disallowed the interest payment in excess of 20%. It was the submission that the ld. CIT(A) had enhanced the same to 22%. It was the submission that the order of the ld. CIT(A) was liable to be reversed. 9. In reply, the ld. AR submitted that no comparable case had .....

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e of the view that the finding of the ld. CIT(A) was on a right footing and does not call for any interference. Thus, ground no. 4 raised by the Revenue stands dismissed. 11. In respect of ground no. 5 it was submitted by the ld. DR that the issue was against the action of ld. CIT(A) in deleting the addition on account of taxing of profits on the basis of percentage completion method on the construction of villas whereas the Assessee was booking profits of villas by following the completed contr .....

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& Co. Pvt. Ltd. reported in 131 CTR 203 has held that the completed contract method is an acceptable method and that consistency is to be followed. 12. We have considered the rival submissions. As it is noticed that the ld. CIT(A) has followed the decision of the Hon'ble Bombay High Court in the case of V.S. Dempo & Co. Pvt. Ltd. referred to supra, as also the decision of the Hon'ble Supreme Court in the case of Realest Builders and Services Ltd. reported in 307 ITR 202 and as t .....

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s objection. Consequently, the Cross objection filed by the Assessee stands dismissed as withdrawn. ITA No. 426/PNJ/2014 - 15. In respect of ground nos. 2 & 2A of the Revenue's appeal it was submitted by the ld. DR that in the course of assessment the AO had disallowed brokerage claimed to have been paid by the Assessee in respect of sale of villas as the Assessee could not prove with evidence the genuineness of the transaction. It was the submission that the ld. CIT(A) had confirmed the .....

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he ld. AR did not raise any serious objection. Consequently, the direction given by the ld. CIT(A) in respect of the issue of disallowance of brokerage which read as follows "However, the A.O is directed to allow the brokerage expenses in the year in which corresponding income is offered for taxation." stands deleted. The AO shall conduct necessary verification and examination of the details in respect of the brokerage payments, if any, claimed by the Assessee when the Assessee sells t .....

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