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2016 (1) TMI 113 - ITAT DELHI

2016 (1) TMI 113 - ITAT DELHI - TMI - Deduction being the interest paid representing ‘late payment of interest’ on the monies admittedly borrowed - whether as allowable deduction while computing the income from property as was utilized for acquiring the property whose income was assessed to tax? - Held that:- The claimed deduction has been denied on the basis that the same was not allowable as it was not an interest paid on the capital borrowed from HDFC Bank. There is no dispute that for purcha .....

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006. Thus, in our view, the interest paid at ₹ 2,21,879 cannot be treated differently in comparison to the interest paid to the HDFC Bank as the very purpose for both the interest was to facilitate the payment of amount in consideration for acquisition of the property. We thus while setting aside the orders of the authorities below in this regard direct the Assessing Officer to compute the interest of ₹ 2,21,879 claimed as allowable while computing income from property as provided un .....

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ion, has been fully and wholly allowed as deduction. The Learned CIT(Appeals) has himself held at page No. 26 para No. 7.13 of the First Appellate Order that admittedly the loan amount was used as working capital in its real estates business. Under these facts, we are of the view that the Learned CIT(Appeals) was not justified in arriving at a conclusion that the assessee company has not commenced the business of real estates. This conclusion of the Learned CIT(Appeals) is set aside with this fi .....

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the stock in trade since the aforesaid land had been acquired in the course of its business which is an admitted fact and so admitted by when it had been contended by the assessee that it is a developer in real estates and as such in our opinion the said land was a stock in trade. The approach of the assessee is apparently contradictory which cannot be upheld. Thus, in our view, the Learned CIT(Appeals) was right both on facts and in law in not holding that the said land was not a stock in trad .....

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o.4 as discussed above does not stand and the same is accordingly rejected, with this finding that the land in question was actually stock-in-trade.

Disallowance out of interest paid to HDFC Bank and the bank charges - Held that:- when Learned CIT(Appeals) himself has admitted that funds have been utilized as working capital of the real estates business in his finding in para No. 7.13 at page No. 26 of the order, he was not justified in denying the claimed deduction of interest paymen .....

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) was not justified in coming to the conclusion that the real estates business had not commenced. We thus while setting aside orders of the authorities below direct the Assessing Officer to delete the disallowance of ₹ 39,31,938 claimed on account of interest and bank charges paid against the loan raised for investment in the acquisition of the property - Decided in favour of assessee

Disallowance sustained under the head “employees cost” - Held that:- It is a trite law that aft .....

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nditure for the purpose of its business. In absence of such evidence and especially when in the preceding years, similar expenditure has been allowed, we are of the view that there was no justification on the part of the authorities below to make and uphold the disallowance out of the claimed expenditure. We thus while setting aside orders of the authorities below in this regard, direct the Assessing Officer to delete the disallowance - Decided in favour of assessee.

Disallowance of e .....

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ineness of the expenditure of the assessee. We thus while setting aside orders of the authorities below in this regard direct the Assessing Officer to delete the disallowance - Decided in favour of assessee.

Treatment to interest income - Business income or income from other sources - Held that:- The business is continuing process and merely because there may not be any income from all resources, of course, which is not the case herein, does not by itself mean that the assessee is not .....

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allowance u/s 14A - Held that:- As making disallowance under sec. 14A read with Rule 8D, it is a pre-condition for the Assessing Officer to record his satisfaction that the submissions made by the assessee in relation to the expenditure if any incurred for earning the exempt income is not correct. In absence of recording of such satisfaction by the Assessing Officer, the only option available with the Learned CIT(Appeals) was to delete the disallowance.- Decided in favour of assessee. - ITA No. .....

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iples of natural justice, the order of assessment had to be quashed or annulled. 2. That without prejudice and in the alternative, the Learned CIT(Appeals) ought to have restored such of the matters to the Assessing Officer to decide those issues, in respect of which additions had been made and were been made admittedly in violation of principles of natural justice i.e., without providing any opportunity whatsoever of being heard e.g. income under the head income from property. 2.1That the Learn .....

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been correctly computed by the Assessing Officer in accordance with law and as such there was no justification either on facts and on circumstances of the case to hold that, the claim of deduction of ₹ 1,12,479 was since made by the assessee at page 110 of the paper book, same cannot be allowed as a deduction. The findings are based on erroneous assumptions and without appreciation of facts that assessee had not made any such claim of ₹ 1,12,479 in the computation of income filed by .....

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of interest on the monies admittedly borrowed, as allowable deduction while computing the income from property as was utilized for acquiring the property whose income was assessed to tax. 3. That the Learned CIT(Appeals) has further erred in upholding the findings of Assessing Officer who held that the assessee had not commenced its business in the real estate. He has failed to appreciate that admittedly the business had been set up and even otherwise too, it was incorrect to hold both in law an .....

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pholding the disallowance of interest and bank charges of a. (i) ₹ 26,86,143 Representing interest on (ii) ₹ 3,88,138 monies borrowed for the (iii)Rs.2,21,879 purposes of business and (iv) ₹ 10,815 and utilized for the same b. ( v) ₹ 8,63,651 representing bank charges. All aggregating to ₹ 41,70,626, while computing or determining the total income of the assessee company. 6. That in any case and without prejudice there was absolutely no justification to disallow a f .....

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onate disallowance made on an assumed basis. 7. That the Learned CIT(Appeals) has further erred in sustaining the disallowance of ₹ 5,89,433, a sum disallowed by the Assessing Officer out of the travelling and conveyance on ad hoc basis, being 50% of the total expenditure incurred. He has failed to appreciate that there was no dispute that the expenditure has been incurred for the purposes and was allowable and no ad hoc disallowance could thus have been made. 2. Heard and considered the a .....

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built up area on 3rd floor in a building by the name and style of Capital Fort situated at Munirka for a total consideration of ₹ 9,37,33,600 besides stamp duty and registration expenses. The property was purchased with effect from 22.9.2005 when the assessee paid a sum of ₹ 6,12,98,805 and subsequently requested the seller that since this property was purchased on 22.9.2005 they are also entitled to rent from 23.9.2005. The property was on lease with Lal Bhai Reality Finance Pvt. L .....

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nance Pvt. Ltd. on 22.9.2005, it paid interest on the unpaid amount to Lal Bhai Reality Finance Pvt. Ltd. of ₹ 2,21,879 prior to the deduction of tax at source. 6. It was submitted that from 23.9.2005, the assessee received rent from the tenant Energy Infra-structure India Pvt. Ltd. . The rent received in the year under consideration from 23.9.2005 aggregated to ₹ 59,45,525. Besides the aforesaid rent, the assessee also received rent of ₹ 27,67,500 from another property owned b .....

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AR submitted that the disallowance was made by the Assessing Officer without application of mind as he proceeded to compute income on the basis of profit and loss account and not on the basis of computation of income filed by the assessee. Had the Assessing Officer examined the claim under the head income from property separately then he would not have committed such an error of disallowing the entire claim debited in the profit and loss account which aggregated to ₹ 71,12,593 which was th .....

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rned CIT(Appeals) has failed to appreciate that the assessee has paid the interest on the amount borrowed from HDFC Bank and has also paid interest on the unpaid amount to Lal Bhai Reality Finance Pvt. Ltd. till the same was paid on 10.2.2006. In this regard, he referred page No.. 364 of the paper book. He submitted that not only interest paid to HDFC Bank of ₹ 29,41,967 was allowable as deduction but also unpaid amount to Lal Bhai Reality Finance Pvt. Ltd. represented borrowed amount and .....

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der the head income-from house property . 10. Having gone through the orders of the authorities below, we find that the claimed deduction has been denied on the basis that the same was not allowable as it was not an interest paid on the capital borrowed from HDFC Bank. There is no dispute that for purchasing the property at Munirka for a consideration of ₹ 9,37,33,600, the assessee had taken loan from HDFC Bank for ₹ 6.50 crores on which the authorities below have allowed the interes .....

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cilitate the payment of amount in consideration for acquisition of the property. We thus while setting aside the orders of the authorities below in this regard direct the Assessing Officer to compute the interest of ₹ 2,21,879 claimed as allowable while computing income from property as provided under sec. 24(b) of the Act. The ground No. 2.4 is thus allowed. 11. Ground No.3: It is regarding the finding of the Learned CIT(Appeals) that assessee company has not commenced the business of a r .....

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g Officer accordingly disallowed interest and bank charges claimed as deduction. The Assessing Officer could not have arrived at such a conclusion since assessee company had even during the year under consideration given advances for purchase of flats/land, as would be evident from the following table: Date To whom paid Amount(Rs.) Purpose of payment 11.11.2005 Repayment to Sh. S.K. Jatia of amount received on 07.10.2005 in Kotak Bank. 90,00,000 Repayment of amount received earlier (page 158 of .....

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ittedly utilized as working capital of the real estates business. The Learned AR referred page No. 26 of the First Appellate Order in this regard. He pointed out that even in the assessment order framed under sec. 143(3) of the Act for the assessment year 2005-06, it is an admitted fact by the Assessing Officer that assessee is engaged in the work of real estates. In support, he referred page Nos. 374 to 282 of the paper book i.e copy of the assessment order for assessment year 2005-06. He point .....

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arned Senior DR on the other hand placed reliance on the orders of the authorities below with this contention that under the facts of the present case, the Learned CIT(Appeals) has rightly come to the conclusion that the assessee company had not commenced the business of real estates. The assessee was in several business activities and it was not clear that as to which business was commenced during the year. 15. Considering the above submission, we find that in the assessment year 2005-06 in the .....

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ablished position of law that any expenditure incurred after the date of setting up of the business is allowable deduction and it is an unrebutted fact of the present case that in the preceding assessment years, as submitted by the Learned AR hereinabove, the expenditure incurred and as debited in profit and loss account like in the year under consideration, has been fully and wholly allowed as deduction. The Learned CIT(Appeals) has himself held at page No. 26 para No. 7.13 of the First Appella .....

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6. Ground No.4: This ground has been raised as an alternative and without prejudice to the above submissions that in view of finding of Learned CIT(Appeals) agitated above in ground No.3, the Learned CIT(Appeals) ought to have held that the land held and owned by the assessee in Village: Bhondsi measuring 38.09 hector is an agricultural land despite the fact that the same was shown in the balance sheet, under the head stock in trade of the value of ₹ 3,11,24,826. 17. The learned Senior DR, .....

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menced. He has, however, noted that the assessee is holding 38.09 hectors of agricultural land for which land use conversion had not been granted by the concerned authorities for residential and commercial purposes. Thus, the land in possession of the assessee remained agricultural only and no construction development activity has obviously been started on it or can be started on it in the absence of the requisite permission. He accordingly held that the land is not ready for commencement of bus .....

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de since the aforesaid land had been acquired in the course of its business which is an admitted fact and so admitted by when it had been contended by the assessee that it is a developer in real estates and as such in our opinion the said land was a stock in trade. The approach of the assessee is apparently contradictory which cannot be upheld. Thus, in our view, the Learned CIT(Appeals) was right both on facts and in law in not holding that the said land was not a stock in trade as has been con .....

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above does not stand and the same is accordingly rejected, with this finding that the land in question was actually stock-in-trade. 19. Ground No.5: It is in respect of disallowance out of interest paid to HDFC Bank and the bank charges of ₹ 39,37,932. The break-up of the charges is as under: SNo. Particulars Amount (Rs.) 1. Interest paid on HDFC loan ₹ 800 lacs. 26,86,143 2. Interest paid ICICI Home Loans 3,88,138 3. Bank Charges 8,63,651 Total 39,37,932 20. The figure stated in the .....

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r the purpose of business as would be clear from the details discussed earlier. The Learned AR submitted that the Learned CIT(Appeals) has failed to appreciate that assessee in the course of its business had borrowed funds for the purpose of its business and made advances towards acquisition of land and properties. In fact, the Learned CIT(Appeals) has himself admitted that the funds have been admittedly utilized as working capital of the real estates business (Page No. 26 of the First Appellate .....

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of interest paid to ICICI Bank of ₹ 3,88,138 was for purchase of two flats in Vatika Limited, which flats were delivered in the financial year 2007-08 and was duly reflected in the balance sheet and out of the two flats one is sold in financial year 2009-10 and income accruing on the sale thereof has been shown as business income. He referred copy of loan agreement with ICICI Bank made available at page No. 179 to 197 of the paper book and agreements for purchase of flats with Vatika Ltd. .....

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d in the business of consultancy, trading of products and business income had been assessed at ₹ 18,77,042, thus, there was business of assessee company and the interest paid was allowable as deduction, contended the Learned AR. 22. In respect of remaining sum, the Learned AR submitted that ₹ 8,63,651 represents bank charges in respect of loan raised for the acquisition of the property, where advance was paid to M/s. GE Capital Services and Smart Tourism Pvt. Ltd., since the bank cha .....

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ly dealt with the same in his order. In fact, since he held that the amount of interest paid to HDFC Bank of ₹ 26,86,143 on loan of ₹ 8 crores and interest paid to ICICI Bank of ₹ 3,88,138 cannot be regarded as business expenditure, he sub-silentio upheld the disallowances made of the bank charges paid to the HDFC Bank. The Learned AR accordingly prayed that the amount of interest paid of ₹ 26,86,143, ₹ 3,88,138 and of ₹ 8,63,582 as bank charges aggregating to .....

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investment made in stock in trade. The Learned CIT(Appeals) has disallowed the claimed interest payment on the basis that the business for the purpose of which loan was raised and interest was paid was not commenced. We have decided this issue hereinabove in ground No. 3 that keeping in view the facts and circumstances of the case and the approach of the Assessing Officer in preceding assessment years in allowing the claimed expenditure, the Learned CIT(Appeals) was not justified in coming to th .....

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of ₹ 12,31,084 as debited in the profit and loss account under the head employees cost . 26. At the outset of hearing, the Learned AR submitted that similar expenditure had been incurred in the preceding years 2001-02 (Rs.22,24,713), 2002-03 (Rs.23,13,054), 2003-04 (Rs.13,77,196), 2004-05 (Rs.9,83,823) and 2005-06 (Rs.12,38,588) have been held allowable. The Learned AR submitted that in each of the preceding years including in the assessment years 2001-02 and 2005-06 when assessments were .....

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es and as such, only expenses to the extent there is business income is allowable. We, thus computed the disallowance accordingly. The stand taken by the Assessing Officer has no legal basis. He placed reliance on the following decisions: i) 91 ITR 544 (S.C) - CIT vs. Dhanrajgirji Raja Narshingji; ii) 118 ITR 261 (S.C) Sassoon J David and Co. (P) Ltd.; & iii) 254 ITR 377 (Del) CIT vs. Dalmia Cement (P) Ltd. iv ) 265 ITR 77 (Allahabad) - Abbas Wazir (P) Ltd. vs. CIT; 27. The Learned AR submit .....

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vs. CIT; iii) 242 ITR 450 (S.C) - Rajasthan State Warehousing Corporation vs. CIT; iv ) 128 ITR 189 (P&H) - Punjab State Cooperative Supply & Marketing Federation Ltd. Vs. CIT. 28. The learned Senior DR on the other hand placed reliance on the orders of the authorities below. 29. Considering the above submission, we find that in the preceding years, similar expenditure has been allowed and out of these assessment years 2001-02 to 2005-06 in the assessment years 2001-02 and 2005-06 the as .....

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to support the allegations of the authorities below that assessee had not incurred the claimed expenditure for the purpose of its business. In absence of such evidence and especially when in the preceding years, similar expenditure has been allowed, we are of the view that there was no justification on the part of the authorities below to make and uphold the disallowance out of the claimed expenditure. We thus while setting aside orders of the authorities below in this regard, direct the Assess .....

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e of 50% of the claimed expenditure on the assumption that the aforesaid expenditure could not have been incurred to earn a receipt of ₹ 22.36 lacs. The Learned CIT(Appeals) has upheld the disallowance. 32. In support of the ground, the Learned AR submitted that details of claimed travelling and conveyance expenses of its employees incurred at ₹ 11,78,186 were furnished before the Assessing Officer and a copy thereof has been made available at page No. 367 of the paper book. The Lear .....

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m of deduction without any justification. He submitted that it is not a case where the Assessing Officer or Learned CIT(Appeals) has disputed either of incurring of expenditure or genuineness thereof. The only objection of the authorities below remained that no prudent businessman would have incurred expenses on travelling and conveyance to the tune of ₹ 11.78 lacs to earn receipts of ₹ 22.36 lacs since many other expenses overheads would also be there. Both the authorities have note .....

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arned AR submitted further that even otherwise, there is no basis to disallow 50% of the eligible business expenditure incurred by the assessee company and placed reliance on the decision of Hon'ble Supreme Court in the case of State of Orissa vs. Maharaja Shri B.P. Singh Deo (1970) - 76 ITR 690 (S.C). 34. The Learned DR on the other hand placed reliance on the orders of the authorities below. 35. Considering the above submission, we find substance in the contention of the Learned AR that a .....

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ard direct the Assessing Officer to delete the disallowance of ₹ 5,89,433 made out of the claimed expenditure of ₹ 11,78,186 incurred on conveyance and travelling. The ground No. 7 is accordingly allowed. 36. In result, the appeal is allowed. ITA No. 3052/Del/2010: 37. The Revenue has questioned First Appellate Order on the following grounds that Learned CIT(Appeals) has erred in: i) allowing deduction under sec. 24 of the Income-tax Act, 1961 of ₹ 27,70,088 to the assessee on .....

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de by the assessee towards interest on the amount borrowed by it for the purchases of Property No.103A, Third Floor, Capital Court at Munirka, New Delhi, while computing its income from property. 39. In support of the ground, the Learned DR placed reliance on the assessment order. The Learned AR on the other hand adopted similar arguments as advanced by him in support of ground No.2.4 of the appeal preferred by the assessee hereinabove. He tried to justify the First Appellate Order with this sub .....

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Bhai Reality Finance Pvt. Ltd. from whom the property was purchased, an interest on the unpaid amount was paid to them represented borrowed amount and as such it was eligible for deduction under sec. 24(b) of the Act. The Learned CIT(Appeals) was thus justified in allowing the claimed deduction of ₹ 27,20,088. The same is upheld. Ground No (i) is accordingly rejected. Ground No.(ii): 41. The Revenue has disputed the allowability of the claim of expenditure of ₹ 15,24,479 representing .....

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nted out that a copy of the said details has been made available at page No. 368 of the paper book. He submitted that the purpose of incurring the aforesaid expenditure was to pay consultancy charges incurred to various professionals for the purpose of business. He pointed out that similar expenditure incurred in past in the course of business had been held allowable as such. In this regard, he referred the assessment years 2001-02 to 2006-07 wherein expenditure incurred in this regard has been .....

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o justification to disallow any expenditure incurred by the assessee when the expenditure was incurred by it in the course of business and the claim is supported with complete details with evidence mainly on the basis that the assessee did not act prudently while incurring such expenditure. We thus do not find infirmity in the First Appellate Order deleting the disallowance in question. The same is upheld. Ground No.(ii) is accordingly rejected. 45. In result, the appeal is dismissed. ITA No. 11 .....

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income from business and there was no change in the facts and the circumstances. 2. That the Learned CIT(Appeals) has further failed to appreciate that, the assessee is engaged in the various business activities namely as a developer of real estate and dealer in real estate etc., and only one of it, was from income by way of interest. 3. That the Learned CIT(Appeals) has erroneously held, that merely because, in the instant year, that a part of the interest of ₹ 13,46,708 had been earned, .....

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to advances made in earlier years . 4. That the Learned CIT(Appeals) has further failed to comprehend the facts of the instant case in its proper and correct prospective. In fact, he has failed to comprehend that, assessment for the assessment years 2005-06 and 2006-07 were completed u/s. 143(3) of the Income-tax Act, and incorrectly been stated in the table at page 15 of his order u/s. 143(1) of the Income-tax Act, 1961. 5. That the Learned CIT(Appeals) has erred in his conclusion that, as two .....

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failed to appreciate that, so long the business carried did not cease to be carried on, any expenditure incurred in the course of such business, is an allowable deduction u/s. 37(1) of the Income-tax Act, 1961 which expenditure had to be set off from income under any other head of income, as has been held by the Apex Court in the case of CIT vs. R.P. Mody reported in 115 ITR 519 and as such the aggregate disallowance of expenditure incurred of ₹ 2,09,62,446 was erroneous both on facts and .....

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expenditure was either unverifiable or was unsubstantiated, claim of expenditure. The entire sum of expenditure of ₹ 1,79,09,346 was thus ought to have been allowed as a deduction, while computing the total income of the assessee. That even otherwise and without prejudice the disallowance of the expenditure is neither logical nor is based on valid material and is highly arbitrary being excessive. 8. The Learned CIT(Appeals) has further erred in upholding the disallowance of a sum of ₹ .....

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in relation to the income derived from the dividend. 9. In any case and without prejudice the disallowance made could not have exceeded the sum of ₹ 8,497 which was calculated by the assessee in accordance with rules. 10. That the Learned CIT(Appeals) ought to have held that, no interest was leviable on the assessee u/s. 234B of the Income-tax Act, 1961 and as such interest levied of ₹ 15,61,030 ought to have been deleted. 47. In ground Nos. 1 to 7: We have discussed the facts of th .....

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rom sales of ₹ 19,917, rental income of ₹ 1,98,31,020 and other income of ₹ 84,31,874 which included the interest income of ₹ 83,65,124 and dividend income of ₹ 66,750. Against the aforesaid, the assessee had claimed expenditure of ₹ 2,77,77,591. The Assessing Officer framed the assessment under sec. 143(3) at the income of ₹ 1,51,50,290 as against the returned income at nil. The Assessing Officer held that interest income is taxable under the head incom .....

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he Learned CIT(Appeals) with regard to disallowance made under sec. 14A of the Act by the Assessing Officer has, however, set aside the matter to the file of the Assessing Officer for verification, which has been questioned by the assessee in ground Nos. 8 and 9. 50. In ground No.10, the assessee has questioned validity of charging of interest under sec. 234B of the Income-tax Act, 1961 at ₹ 15,61,030. 51. We thus find that following three issues have been raised in the above grounds: i) A .....

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15, 61,030 under sec. 234B of the Act? (Ground No. 10) 52. Issue No. (i) - Ground Nos. 1 to 7: In support of these grounds involving the issues, the Learned AR submitted that the assessee had been engaged in the earning income from advancing money on interest since last many preceding assessment years and the interest income earned in each of such assessment years had been offered as business income and same has also been accepted in all the preceding assessment years i.e. 2002-03 to 2007-08 and .....

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to the preceding assessment years and they have overlooked that it is not a case wherein all the preceding assessment years, the interest income was accepted as business income under sec. 143(1) of the Act. As such Revenue cannot take a stand that assessee is not engaged in advancing the money and earning interest as business income. In support, he placed reliance on the following decisions: i) CIT vs. Neo Poly Pack Pvt. Ltd. - 245 ITR 492 (Del.); ii) CIT vs. Excel Industries Ltd. (2013) - 358 I .....

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i) SG Mercantile Corporation (P) Ltd. vs. CIT - 83 ITR 700 (S.C); ii) CIT vs. Bokaro Steel Ltd. - 236 ITR 315 (S.C); 54. The Learned AR submitted that the assessee is in the business of development of real estates, sale and purchase of woods and related items, business of providing consultancy, earning service income by providing infra-structure facility for maintenance of property and earning of interest income. He submitted that it is not denied that during the year under consideration apart .....

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.C); ii) Additional CIT vs. Rajender Flour & Allied Industries Pvt. Ltd. - 128 ITR 402 (Del.); iii) CIT vs. Jacobs - 160 ITR 570 (Ker.); 55. Without prejudice to the above submissions, the Learned AR submitted that even for the sake of arguments, if it is presumed that the assessee did not carry out any business activity during the year, though the assessee seriously dispute the same, then too, it is submitted that expenditure incurred by the assessee during the normal course of activities i .....

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ceeded to compute the income not from profit and loss account but from the computation of income, while making the disallowance to adopt the figure as per profit and loss account by disregarding the computation of income filed by the assessee. He, in fact, had not computed income from business on the ground that the assessee had not carried any business and thus he did not even allow the set off the unabsorbed loss as claimed by the assessee, submitted the Learned AR as an alternative plea. 57. .....

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been accepted. It has not been denied by the Revenue that facts of the case on the issues during the year are similar to that of earlier assessment years. Principles of maintenance of consistency in the approach of the revenue on an identical issue under similar facts and circumstances are well established proposition of law. In its recent decision, the Hon'ble Supreme Court in the case of CIT vs. Excel Industries Ltd. (supra) has been pleased to hold that Revenue cannot be allowed to flip f .....

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assessment years. Hon'ble Delhi High Court in the case of CIT vs. Neo Poly Pack Pvt. Ltd. - (supra) has been pleased to hold that there would be no specification to alter the head of income once in past such head of income was accepted to be the head under which the income had been earned. In the case of CIT vs. Rajender Flour & Allied Industries Pvt. Ltd. (supra), the Hon'ble Delhi High Court upheld the view taken by the ITAT that the lease was essentially a temporary measures to ti .....

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ources, of course, which is not the case herein, does not by itself mean that the assessee is not engaged in the business and is not carrying on business activities in that year. Under these facts and circumstances, we are of the view that the Assessing Officer was not justified in treating the interest income of ₹ 83,65,124 as income from other sources against the claimed income from business. We thus while setting aside the orders of the authorities below in this regard direct the Assess .....

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have been incurred by the assessee to earn the exempt income; and the Assessing Officer has not recorded any satisfaction vis-à-vis books of account of the assessee that any expenditure has been incurred by the assessee to earn the exempt income. In support, he placed reliance on the following decisions: i) CIT vs. Taikisha Engg. India Ltd. - ITA No. 114 of 2014 and 119 of 2014 dated 25.11.2014 (Delhi High Court); ii) HPP Energy (P) Ltd. vs. ACIT - ITA No. 4138/Del/2013 dated 20.3.2015. 6 .....

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