9911796707
TMI Blog2015 (10) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... red in confirming the addition of Rs. 10,000 on account of alleged perquisite on account of services rendered by CA Shri. Whora B.A. On the facts and in the circumstances of the case the said addition be cancelled. 1.2 The learned CIT (A) failed to appreciate that Jain Irrigation Systems Ltd., (JISL) had paid professional charges of Rs. 2,79,000 to said Mr. B. A. Whora only for rendering services to the said company and no part of such payment could be treated as perquisite in the hands of the appellant on account of honorary services rendered by Mr. Wohra to the appellant. 1.3 Alternatively, the value of alleged perquisite be restricted to a nominal amount as against the addition of Rs. 10,000 which is excessive." 2.1 Facts of the case, in brief, are that the assessee is an individual and derives income from rent and other sources. During the course of assessment proceedings the Assessing Officer noted that one Shri B.A. Wohra, Chartered Accountant filed the returns of group cases of 5 Gents and 4 Ladies of the family as well as Jain Irrigation System Ltd. The services of two employees of the company are also utilised for this purpose. The total number of group cases are 30 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book filed on behalf of the assessee. There is no dispute to the fact that Shri B.A. Wohra is getting huge professional fess of Rs. 2,79,000/- from Jain Irrigation System Ltd., (JISL). At the same time, there is also no dispute to the fact that Shri B.A. Wohra is attending to the individual tax matters of the assessee and various family members and have not charged anything separately from them. It is the case of the Revenue that a part of the remuneration paid by JISL should be attributable in the hands of the assessee as perquisite for which the AO made addition of Rs. 10,000/- in the hands of the assessee and the same has been upheld by the CIT(A). It is the case of the Ld. Counsel for the assessee that there is no bar for anybody rendering voluntary services. Further, there is also no material on record to suggest that the company has paid any sum to the consultant on behalf of the assessee for rendering professional services. We find merit in the above submission of the Ld. Counsel for the assessee. It is not mandatory or compulsory for any professional to charge for the professional services rendered to any director or relative of a director or close family members of dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 7.2 It was submitted by the assessee that there is no justification for making the addition on this account. It was submitted that it is not unusual for property owners to collect interest free deposits. Relying on various decisions it was submitted that under the I.T. Act, only the real income could be brought to tax unless there is a specific provision to the contrary. The assessee further submitted that provisions of section 28 deals with income from business or profession and the rent from letting out is taxable. It was further submitted that no such addition has been made in the preceding assessment years on this account. 7.3 However, the AO was not satisfied with the explanation given by the assessee. So far as the argument of the assessee that no addition has been made in the preceding assessment years he held that each assessment year is a separate and independent assessment year. Distinguishing the various decisions cited by the assessee before him he made addition of Rs. 16,48,208/- to the total income of the assessee u/s.2(24)(iv) of the I.T. Act. While doing so, he observed that such a huge rent and huge security deposit has been given to the assessee simply bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Digvijay Cement Vs. CIT 138 ITR 45 (Gujarat) and the decision of Hon'ble Madhya Pradesh High Court in the case of Birla Gwalior Pvt. Ltd., Vs. CIT 44 ITR 847 (MP). 9. However, the Ld.CIT(A) was also not satisfied with the explanation given by the assessee. Instead of giving any relief the Ld.CIT(A) enhanced the addition to Rs. 19,54,208/- by observing as under : "10. I have gone through the details filed and submissions made, besides the reasons for addition as stated by the AO in his order. I find that the interest free deposit of Rs. 3.06 crore to the appellant for hiring the land was totally disproportionate to the market practice and the value of the property. Besides, the company was paying a hefty yearly rent of Rs. 25,50,000/- (net of TDS) to the appellant which also seems to be disproportionate to the market rent. As mentioned earlier, I find that the interest free deposit received is highly excessive and disproportionate to the value of the property and the amount of rent charged. I am therefore, of the considered view that AO was justified in treating the notional interest on security deposit u/s 2(24)(iv) of the Act as perquisite. The AO has calculated interest @ 12% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said decision he submitted that it has further been held that non-charging of interest on advances to directors would not constitute perquisite u/s.17(2) of the I.T. Act. Referring to the decision of the Hon'ble Calcutta High Court in the case of CIT Vs. P.R.S. Oberoi reported in 183 ITR 103 he submitted that the Hon'ble High Court in the said decision has held that interest free loan obtained by a director of a company is not to be regarded as benefit provided by the company within the meaning of section 2(24)(iv) of the I.T. Act. He accordingly submitted that the order of the CIT(A) be set-aside and the addition be deleted. 11. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He drew the attention of the Bench to page 8 of the assessment order and submitted that the AO has categorically given a finding that this is only a paper transaction and the directors have availed undue advantage from the company who has borrowed money by paying huge interest and diverted the same to the directors free of interest. He accordingly submitted that the order of the CIT(A) be upheld. 12. We have considered the rival arguments made by both the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in 183 ITR 103 deleted the addition. When the matter travelled to the High Court, the Hon'ble High Court decided the issue in favour of the assessee and against the Revenue by observing as under : "5. Before considering the arguments raised by the learned counsel for the parties, the provisions of law as it existed, relevant for the Assessment Years in question reads as under: "2. In this Act, unless the context otherwise requires - xxx xxx xxx 24. "income" includes - xxx xxx xxx (iv) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid; 6. Learned counsel for the appellant has relied upon two judgments of Madras High Court reported as Additional Commissioner of Income Tax Vs. Late A.K.Lakshmi & others (by LRs) 113 ITR 368 and Commissioner of Income Tax, Madras Vs. S.S.M.Lingappan 129 ITR 597. In A.K.Lakshmi's case (supra), it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest is charged at a rate lower than the rate of interest, which the Central Government may, having regard to the rate of interest charged by it from its employees on loans for such purpose granted to them, such benefit will be regarded as "perquisite". But such amendment was repealed in the very next year. In view of the said amendment, the Court held to the following effect: ".......The question therefore arises whether the enjoyment by the assessee of interest-free credit an be treated as a "benefit or perquisite" within the meaning of section 2(24) (iv) of the Income- tax Act, 1961. The intention of the Legislature seems to be very clear that the expressions 'benefit" and/or "perquisite" did not include the enjoyment of loan or credit, free of interest or at a concessional rate. This aspect has been recognized by the statute itself and to bring such items in /the net of taxation, the law was amended by the Taxation Laws (Amendment) Act, 1984. By this amendment, as already indicated, a new sub-clause (vi) was inserted in Section 17 (2) and similarly another sub-clause (vi) was I was inserted in clause (b) of Explanation 2 to Section 40A (5). The effect of these amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Laws (Amendment) Act, 1984 and consequent repeal by the Financial Act, 1985. Such intervention makes the intention of the Legislature clear that had the existing provisions been sufficient to treat the benefit of interest free loan, as deemed income, the same would not have been incorporated by way of amendment and subsequent repealed. In the aforesaid case, the assessee was in appeal aggrieved against the judgment of Karnataka High Court, wherein reliance was placed upon judgments of Madras High Court, as mentioned above. The Hon'ble Supreme Court has also quoted with approval, the passage from the judgment of P.R.S. Oberoi's case (supra). It observed: "......The amendment made by the 1984 Amending Act was both to Section 17(2) and Section 40A (5). In the impugned judgment reference in fact had been made to inclusion of Sub Clause (vi) in Clause (2) of Section 17. Moreover, the High Court in the impugned judgment did not consider the amendments made by the Amending Act, 1984 on the ground " it is difficult to see how this amendment can have any bearing upon the interpretation of the then existing provisions of the Act.". We do not think this approach was also correct. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epeal by Finance Act, 1985 provide a clear direction to interpret the provisions of section 17(2) and 40A(5) before insertion of clause (vi). Therefore, when a company obtains loan by paying interest and advances the same to directors without charging any interest, the interest attributable to the amounts advanced to directors could not be treated as perquisite. 12.2 We further find that the Ld. Departmental Representative could not controvert the submission of the Ld. Counsel for the assessee that no such disallowance was made in scrutiny assessments in the past and no 263 proceedings or 148 proceedings were initiated after completion of the assessment. In view of the above discussion, we are of the considered opinion that no addition on account of interest u/s.2(24)(iv) is required on interest free deposit advanced to the assessee. Ground raised by the assessee is accordingly allowed. 13. Ground of appeal No.3 by the assessee reads as under : "3. Addition/enhancement u/s.14A of the Act. 3.1 The Ld.CIT(A) erred in enhancing the assessment by way of disallowance u/s.14A of Rs. 88,921/-. On the facts and in the circumstances of the case, the disallowance u/s.14A be cancelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 to 14 of the paper book drew the attention of the Bench to the computation of income and submitted that the assessee has not claimed any expenditure from the dividend income. Referring to the decision of the Pune Bench of the Tribunal in the case of ACIT Vs. M/s. Magarpatta Township Development and Construction Company Pvt. Ltd., vide ITA No.2114/PN/2012 order dated 27-05-2014 for A.Y. 2009-10 he submitted that the Tribunal in the said decision has held that no disallowance u/s.14A r.w. Rule 8D is required when there is no direct or indirect expenditure incurred by the assessee in relation to earning exempt income. He also relied on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities and Power Ltd., reported in 313 ITR 340 and the decision of the Pune Bench of the Tribunal in the case of Dharmveer Sambhaji Urban Coop. Bank Ltd., Vs. Adl.CIT vide ITA No.1287/PN/2012 order dated 20-09-2013 for A.Y. 2008-09. 15. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that the assessee himself has calculated the disallowance u/s.14A r.w. Rule 8D which has been accepted by the Ld.CIT(A). Under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atic and nor is dependent merely on the existence of an exempt income in the hands of the assessee. In support of the aforesaid proposition, A.Y. 2009-10 a gainful reference can be made to the judgement of the Hon'ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. (supra) as well as the judgement of the Hon'ble Delhi High Court in the case of Maxopp Investment Ltd. & Ors. vs. CIT (2012) 247 CTR 162 (Del). The Pune Bench of the Tribunal in the case of Kalyani Steels Ltd. (supra) has also considered the aforesaid judgements and concluded that section 14A(2) of the Act envisages a condition precedent for invoking rule 8D of the Rules and computing disallowance; and, such condition being that the Assessing Officer records that he is not satisfied with the correctness of the claim of the assessee in respect of expenditure incurred in relation to income which does not form part of the total income under the Act, having regard to the accounts of the assessee. Notably, the aforesaid precedents also bring out that the satisfaction which is mandated in terms of section 14A(2) of the Act must be based on reasons and on relevant consideration. In other words, the invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-rule (2) of rule 8D of the Rules. As per the CIT(A), the manner and the working for considering Rs. 3,00,19,761/- for the purposes of clause (ii) of subrule (2) of rule 8D of the Rules has not been recorded by the Assessing Officer in his order. The CIT(A) further records that the Assessing Officer has not examined the accounts of the assessee so as to arrive at a satisfaction and finding regarding incurrence of direct or indirect expenses in connection with earning of the exempt income, as required by sub-section (2) of section 14A of the Act. The CIT(A) also observed that assessee has made the investment from own funds and therefore question of any expense on account of interest for earning of impugned exempt income, "in the given set of facts and circumstances of the case, does not arise". 10. Pertinently, we find no such reasons to distract from the aforesaid findings of the CIT(A) which are clearly borne out by the material on record. In-fact, discussion in the assessment order, which has been referred to by the learned CIT-DR before us does not show as to how the categorical assertions of the CIT(A) are wrong. Though, the Assessing Officer does say that he is "not satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT (A) failed to appreciate that Jain Irrigation Systems Ltd., (JISL) had paid professional charges of Rs. 2,79,000 to said Mr. B. A. Whora only for rendering services to the said company and no part of such payment could be treated as perquisite in the hands of the appellant on account of honorary services rendered by Mr. Wohra to the appellant. 1.3 Alternatively, the value of alleged perquisite be restricted to a nominal amount as against the addition of Rs. 62,406 which is excessive." 18.1 After hearing both the sides, we find the above ground is identical to ground of appeal No.1 in ITA No.735/PN/2013. We have already decided the issue and the ground raised by the assessee has been allowed. Following the ratio, this ground by the assessee is allowed. 19. Ground of appeal No.2 by the assessee reads as under : "2. Enhancement by Rs. 25,41,694/- u/s.14A 2.1 The learned CIT (A) erred in enhancing the assessment by way of disallowance u/s. 14A of Rs. 25,31,694. On the facts and in the circumstances of the case, the disallowance u/s. 14A be cancelled. 2.2 The learned CIT (A) erred in making enhancement on the ground not mentioned in the assessment order and consequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21,98,43,410 4 0.5 % of the Average value of investment, income from which is exempt As on 31.03.2008 13,39,25,086 As on 3 1.03.2009 52,86,127 Total 13,92,11,213 Average 6,96,05,606 0.5 % of the Average 3,48,028 Total 25,31,694 20. The Ld. Counsel for the assessee submitted that the assessee has not claimed any administrative expenses. He submitted that as against interest expenditure of Rs. 68,96,925/- incurred by the assessee he has claimed deduction of only Rs. 56,16,040/-, i.e. to the extent of interest income. Thus, he has not claimed balance interest of Rs. 12,80,885/-. He accordingly submitted that from the disallowance of Rs. 21,83,666/- computed by the Ld.CIT(A) benefit of Rs. 12,80,885/- should be given and only the balance amount may be disallowed. So far as the administrative expenses is concerned he submitted that since the assessee has neither claimed nor incurred any administrative expenses, no disallowance is called for. He accordingly submitted that the disallowance u/s.14A r.w. Rule 8D should be confined to Rs. 9,02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artly allowed for statistical purposes. 24. Ground of appeal No.3 being general in nature is dismissed. ITA No.780/PN/2013 (By Revenue) (Shri Atul B. Jain) : 25. Ground of appeal No.1 by the Revenue reads as under : "(1) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 4,80,09,600/-, while in para-8 of his order, he himself held that the transaction of gift of shares to a private limited company as a debatable issue. Thus, the Ld.CIT(A) has erred in not considering the provisions of section 28(iv) which does not speak that there should be two persons and it speaks only 'from business or profession'." 25.1 Facts of the case, in brief, are that the assessee was the proprietor of M/s. Jain and Sons Investments Corporation. The assessee was holding 181208 shares of Jain Irrigation System Ltd., as stock in trade. The cost of acquisition of such shares is Rs. 46,97,998/- which was shown in the balance sheet. The assessee gifted 180000 shares valued at Rs. 46,66,675/- to JISL by passing a journal entry in the books of account of the proprietary concern by debiting capital account and crediting share account. The done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question were not sold during the year. The assessee had only passed an accounting entry by transferring shares account in his own capital account in his books of account without involving any other person. It was submitted that the assessee has not received any benefit in kind or otherwise which could be brought to tax u/s.28(iv) of the I.T. Act. Various decisions were cited before the Ld.CIT(A) and it was submitted that only the real income can be brought to tax under the I.T. Act. Therefore, the transaction which really involves transfer of funds or assets from one pocket to a different pocket of the same individual does not spell any income even though it may be reflected in book entries of what appear to be of two different assessees. 26. Based on the arguments advanced by the assessee the Ld.CIT(A) called for a remand report from the AO. After confronting the same to the assessee, the Ld.CIT(A) deleted the addition by observing as under: "8. I have carefully gone through the assessment order, submission of the appellant and the material available on record. I have also gone through the audited financial statements of the donee company and the assessment order passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd was unconditional and irrevocable. The donee company was authorized to accept the gift as per its Memorandum of Association and Article of Association. Further, the appellant has stated that sec.25 of Indian Contract Act does not invalidate the gift of shares made to the above company. The appellant vide letter dt.3/12/2012 has stated that the provisions of sec. 47(iii) of the Act also do not apply in his case. There is nothing on record to prove that any consideration or benefit has been passed on to the appellant. In short, the addition of Rs. 4,80,09,600/- cannot be justified either on facts or in law, there being no income accruing to the appellant within the meaning of sec. 28 (iv) of the Act. The same is deleted. 26.1 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 27. The Ld. Departmental Representative strongly opposed the order of the CIT(A). Referring to para 8 of the order of the CIT(A) he submitted that the Ld.CIT(A) in the said decision has observed that the gift of shares to Pvt. Ltd., Company is a debatable issue. This shows that the Ld.CIT(A) himself was doubtful about the alleged transaction. Although it is a fact that no 2 perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue should be dismissed. 29. 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. In the instant case, we find the assessee is the proprietor of M/s. Jain and Sons Investments Corporation, Jalgaon. It was holding 181208 shares of JISL. Cost of acquisition of such shares was Rs. 46,98,998/-. The assessee gifted 180000 shares valued at Rs. 46,66,675/- to JISL by passing an accounting entry in the books of the proprietary concern debiting capital account and crediting share account. The AO invoking the provisions of section 28(iv) made addition of Rs. 4,80,09,600/- being the difference between the market value as on 07-11-2008 and the cost of 180000 shares. We find the Ld.CIT(A) deleted the addition by holding that there is no evidence on record that the assessee received any consideration directly or indirectly from the donee company in view of the gifted shares. The gift deed dated 07-11-2008 inter alia mentions that the gift of shares has been made without any monetary consideration. He f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56,16,040/- for investment made in FDs with bank/companies and shares of Cooperative Bank. Since the interest paid on borrowed funds was higher than the interest earned the assessee restricted the deduction to the interest paid to Rs. 56,16,040/- excluding the excess interest paid on Rs. 12,80,885/-. Since there was no business activity during the year the AO was of the opinion that allowing interest paid on borrowings does not arise. The income from interest on FDs/Dividend and other income has to be taxed under the head "income from other sources". Since the assessee did not furnish any evidence of utilization of borrowed funds towards earning of interest and did not furnish the balance sheet and capital account, the AO added an amount of Rs. 56,16,040/- being interest earned on investment under the head income from other sources. 31. In appeal the Ld.CIT(A) deleted the addition by holding that the fact of existence of borrowings could not be denied. The assessee himself has restricted the claim of deduction of interest to the extent of receipt of interest. Further in the past also, the department and assessee have accepted the claim for deduction but limiting the same to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,406 on account of alleged perquisite on account of services rendered by CA Shri. Whora B.A. On the facts and in the circumstances of the case the said addition be cancelled. 1.2 The learned CIT (A) failed to appreciate that Jain Irrigation Systems Ltd., (JISL) had paid professional charges of Rs. 2,79,000 to said Mr. B. A. Whora only for rendering services to the said company and no part of such payment could be treated as perquisite in the hands of the appellant on account of honorary services rendered by Mr. Wohra to the appellant. 1.3 Alternatively, the value of alleged perquisite be restricted to a nominal amount as against the addition of Rs. 62,406 which is excessive. 35.1 After hearing both the sides, we find the above ground is identical to Ground of appeal No.1 in ITA No.735/PN/2013 in the case of Shri Bhavarlal Hiralal Jain. We have already decided the issue and the ground raised by the assessee has been dismissed. Following the same ratio, this ground by the assessee is dismissed. 36. Ground of appeal No.2 by the assessee reads as under : "2. Addition of notional interest Rs. 7,31,870/-. 2.1 The learned CIT (A) erred in enhancing income from house property be add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT (A) ought to have appreciated that deduction in respect of interest paid is claimed only to the extent of interest received, which is offered to tax and ignoring the claim for excess payment. 3.4 The learned CIT (A) erred in ignoring the fact that the investment in shares of the company (dividend from which being exempt) was made long ago and that too out of owned/non interest bearing funds. 3.5 The learned CIT (A) failed to appreciate that in the absence of any nexus between the borrowed funds and investment in shares of the company income on which was exempt, interest payment of Rs. 1,10,18,000 ought o have been ignored while calculating disallowance u/s. 14A r.w.r. 8D. 3.6 WITHOUT PREJUDICE, the disallowance u/s. 14A r.w.r. 8D should be restricted to Rs. 5,19,298." 39.1 Facts of the case, in brief, are that the Ld.CIT(A) during appeal proceedings observed that assessee has received dividend of Rs. 16,05,568/- from M/s. Jain Irrigation System Ltd., The assessee has also paid interest of Rs. 10,18,000/- on borrowed funds. He, therefore, asked the assessee to explain as to why provisions of section 14A r.w. Rule 8D should not be invoked. In response to the same, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, no relief should be granted to the assessee and the order of the CIT(A) be upheld. 42. We have heard the rival arguments made by both the sides. Admittedly, the assessee had earned interest income of Rs. 60,17,336/- and paid interest of Rs. 1,10,18,000/- and has not claimed the excess interest paid to the extent of Rs. 50,00,664/-. We have decided an identical issue in the case of Shri Atul Bhavarlal Jain at para 19 to 23 of the order and the arguments of the assessee have been partially accepted. Following the same ratio, we direct the AO to recompute the disallowance u/s.14A r.w. Rule 8D after giving due opportunity of being heard to the assessee as per law. This ground by the assessee is accordingly allowed for statistical purposes. 43. Ground of appeal No.4 being general in nature is dismissed. ITA No.779/PN/2013 (Shri Ashok Bhavarlal Jain) (By Revenue) : 44. Ground of appeal No.1 by the Revenue reads as under : "(1) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 13,95,53,921/-, while in para-8 of his order, he himself held the transaction of gift of shares to a private limited company as a debatable issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was partner and later on assessee's name was made on 26-07-1999. According to the AO, the assessee was not owner of the property on the date of execution of rent deed. He further observed that when the company was the owner of the property then why it sold its property to the firm and later on taken out the property on exorbitant rent plus deposit. According to the AO, it clearly shows the intention was to give benefit to the assessee who is holding key position in the company and the company funds have been utilized for the personal benefit of the assessee on one hand and on the other hand the company is also paying huge amount of interest for above capital. He, therefore, brought to tax an amount of Rs. 6,17,270/- u/s.2(24)(iv) of the I.T. Act being interest @12% on the outstanding balance of Rs. 51,43,912/- as on 31-03-2009. Relying on various decisions the Ld.CIT(A) deleted the addition by holding that notional interest on such income should be treated as "income from house property". He however directed the AO to calculate such notional income @12% on the opening balance of Rs. 60,98,915/- which comes to Rs. 7,31,870/-. Thus he enhanced the income from house property to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8,05,375/- to Rs. 13,17,685/-. AO's action in treating the income from house property as income from other sources is also not found to be justified. This issue has been discussed in detail in paras 13 and 14 below." 46.2 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 47. The Ld. Departmental Representative supported the order of the AO. 48. We have heard the rival arguments made by both the sides. We find in the assessee's appeal while deciding ground No.2 we have setaside the order of the CIT(A) and directed the AO to delete the addition of notional interest on interest free deposit given to the assessee on account of letting out of the bungalow. Therefore, this ground by the Revenue becomes infructuous. Accordingly, the same is dismissed. ITA No.738/PN/2013 (Shri Ajit Bhavarlal Jain) : 49. Ground of appeal No.1 by the assessee reads as under : "1. Addition of Rs. 62,406/- alleged perquisite 1.1 The learned CIT (A) erred in confirming the addition of Rs. 62,406 on account of alleged perquisite on account of services rendered by CA Shri. Whora B.A. On the facts and in the circumstances of the case the said addition be cancelled. 1.2 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the claim for excess payment. 3.4 The learned CIT (A) erred in ignoring the fact that the investment in shares of the company (dividend from which being exempt) was made long ago and that too out of owned/non interest bearing funds. 3.5 The learned CIT (A) failed to appreciate that in the absence of any nexus between the borrowed funds and investment in shares of the company income on which was exempt, interest payment of Rs. 70,32,427 ought to have been ignored while calculating disallowance u/s. 14A r.w.r. 8D. 3.6 WITHOUT PREJUDICE, the disallowance u/s. 14A r.w.r. 8D should be restricted to Rs. 7,49,195." 51.1 Facts of the case, in brief, are that during the course of appeal proceedings the Ld.CIT(A) noted that the assessee has received dividend of Rs. 49,01,113/- from Jain Irrigation System Ltd. The assessee has also paid interest of Rs. 70,32,427/- on borrowed funds. He, therefore, asked the assessee to explain as to why the provisions of section 14A r.w. Rule 8D should not be invoked. He calculated such disallowance at Rs. 46,72,667/-. The assessee filed a revised computation according to which such disallowance comes to Rs. 43,72,666/-. The Ld.CIT(A) accordingly issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the light of our direction therein. This ground by the assessee is accordingly allowed for statistical purposes. 55. Ground of appeal No.4 being general in nature is dismissed. ITA No.778/PN/2013 (By Revenue) : 56. Ground of appeal No.1 by the Revenue reads as under : "(1) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 8,42,21,366/-, while in para-8 of his order, he himself held the transaction of gift of shares to a private limited company as a debatable issue. Thus, the Ld. CIT(A) has erred in not considering the provisions of section 28(iv) which does not speak that there should be two persons and it speaks only 'from business or profession'." 56.1 After hearing both the sides, we find the above ground is identical to ground of appeal No.1 in ITA No.780/PN/2013. We have already decided the issue and the ground raised by the Revenue has been dismissed. Following the same ratio, this ground by the Revenue is dismissed. 57. Ground of appeal No.2 by the Revenue reads as under : "(2) On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 53,99,347/-. The Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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