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Jaidev Prasad Agarwal C/o Rawalwasia Trading Company Versus I.T.O., Ward-35 (2) , Kolkata

2017 (4) TMI 958 - ITAT KOLKATA

Disallowance u/s 14A - Held that:- Ground should be restored to the file of AO, as he has not examined the disallowance u/s 14A of the Income Tax Act, 1961 (Act) with respect to share of profit received by the assessee from partnership firms which are also not includible in the total income liable to tax of the assessee. The ld. DR has rightly relied on the judgement of ITAT Ahmedabad Bench in the case of Vishnu Anant Mahajan vs ACIT (2012 (6) TMI 297 - ITAT, Ahmedabad) - Deemed dividend add .....

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ies granted by such company in lieu of such mortgage and in lieu of the same, the company grants some interest free advance to the assessee, such transaction is not a gratuitous transaction. This principle is fulfilled in the case on hand. Thus respectfully following the same we allow this ground of the assessee as the amount advanced by the company to the assessee is not a gratuitous transaction. - Decided in favour of assessee. - Disallowance of interest paid - Held that:- The claim of the .....

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l/2014 - Dated:- 12-4-2017 - SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER For The Appellant : Shri V.N.Purohit, FCA For The Respondent : Md. Ghayas Uddin, JCIT ORDER This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-XX, Kolakata dt.24.07.2014 relating to A.Y.2010-11 on the following grounds :- 1. On the facts and in the circumstances of the case the Ld. C.IT.(A) has erred in confirming the disallowance u/s. 14A of the 1. T. Act, 1961 read .....

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usiness. 4. On the facts and in the circumstances of the case the Ld. C.I.T.(A) has erred in confirming the estimated income of House Property at ₹ 63,000/- by the Ld. A.O. 5. Other grounds of Appeal may be argued before or at the time of hearing of this appeal. 2. After hearing the rival contentions I find that ground no.1 should be restored to the file of AO, as he has not examined the disallowance u/s 14A of the Income Tax Act, 1961 (Act) with respect to share of profit received by the .....

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ip Kumar Malhotra vs CIT (2011) 203 Taxman 110/15 taxmann.com 66 (Calcutta) and submitted that the assessee pledged his properties to the bank by way of equitable mortgage and also stood as a guarantor for the credit facilities taken by the company and that the company had reciprocally passed a resolution to provide interest free funds to the assessee upto a maximum limit of ₹ 1 crore in lieu of his pledging his properties and standing as guarantor for the loan. The ld.DR opposed this cont .....

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has not arisen. 4. After hearing the rival submissions I find that the Jurisdictional High Court in the case of Pradip Kumar Malhotra held as follows :- The phrase by way of advance or loan appearing to sub-clause (c) of section 2(22) must be construed to mean those advances or loans which a shareholder enjoys for simply on account of being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in prof .....

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oan or advance is given in return to an advantage conferred upon the company by such shareholder. In the instant case the assessee permitted his property to be mortgaged to the bank for enabling the company to take the benefit of loan and in spite of request of the assessee, the company was unable to release the property from the mortgage. In such a situation, for retaining the benefit of loan availed from the bank if decision was taken to give advance to the assessee such decision was not to gi .....

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