TMI Blog2017 (11) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... end income earned by assessee in the year under consideration. Therefore, the question of making disallowance u/s. 14A of the Act does not arise. Disallowance on account of commission expense - Held that:- As the assessee failed to bring any evidence to justifying the payment of commission expense. Therefore we are not inclined to interfere in the order of Ld. CIT(A). We uphold the same. Hence, this ground of assessee’s CO is dismissed. Disallowance on account of service charge - Held that:- No documentary evidence furnished by assessee to justify the business connection for payment of such expenses.Hence, this ground of assessee’s CO is dismissed. - ITA No. 727-728/Kol/2017, C.O. No. 41-42/Kol/2017 - - - Dated:- 31-10-2017 - Shri Waseem Ahmed, Accountant Member And Shri S.S.Viswanethra Ravi, Judicial Member By Assessee : Shri Khettra Mohan Roy, FCA By Respondent : Shri Arindram Bhattacharjee, Addl-CIT-DR ORDER Per Bench These two appeals by Revenue and Cross Objections (CO) by the assessee are directed against the different orders of Commissioner of Income Tax (Appeals)-9 Kolkata dated 19.01.2017. Assessments were framed by ITO Ward-32(2), Kolkata u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that all the payments of employees PF were made before the due date of income tax return filing. Therefore, the same cannot be disallowed in view of judgment of Hon'ble jurisdictional High Court by the decision of Hon ble jurisdictional High Court in the case of CIT v. M/s Vijay Shree Limited vide ITAT No.245 of 2011 in GA No.2607 of 2011 dated 7th September, 2011, wherein it has been held as under:- After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec. 43(B) of the income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April, 1988. Such being the position, the deletion of the amount paid by the Employees contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned investment by observing as under:- Secured Loan ₹ 358.97 lakh Total investment including share application money ₹ 387.88 lakh Total sales - ₹ 1448.28 lakh Total purchase - ₹ 1341.42 lakh Less: S/debtors ₹ 148.17 lakh Less: S/creditors ₹ 53.48 lakh Sales net of sundry debtors ₹ 1300.11 lakh Purchase net of Sundry creditors Rs.1287.94 lakh Hence, receipt of ₹ 1300.11 lakh out of net sales is on the higher side as against net purchase of ₹ 1287.94 lakh. Further, secured loan of ₹ 358.94 lakh is below total investment of ₹ 387.88 lakh which indicates total investment out of secured loans. No nexus of the subject investments with the assessee s business during the relevant previous year could also be proved by the assessee. It is thus evident that total investments have been made out of secured loans and the explanation given by the assessee is not found to be based on the facts on record. In view of the above, AO after having reliance on the judgment of Hon'ble Punjab Haryana High Court in the case of CIT vs. Abhishek Industries Ltd. Reported in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial expediency of the advances in question given to the sister concerns, the ld. Counsel for the assessee has invited my attention to the balance-sheet of the assessee placed at page no. 21 of his paper book which clearly shows that the assessee at the relevant time was having own funds of ₹ 6.61 crores, which were sufficient to give the impugned advances to its sister concern. On the other hand, the loans taken by the assessee at the relevant time stood only at ₹ 1.65 crores, which were entirely used for the purpose of its business. In my opinion, these facts and figures clearly evident from the relevant balance-sheet of the assessee; which have remained undisputed or uncontroverted by the ld. DR are sufficient to show that there was no diversion of borrowed funds by the assessee for non-business purpose and the disallowance made by the Assessing Officer on account of interest was unsustainable. In that view of the matter, I uphold the impugned order of the ld. CIT(Appeals) deleting the disallowance made by the Assessing Officer on account of interest and dismiss Ground No.3 of the Revenue s appeal. Respectfully following the same, we uphold the order of Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see failed to substantiate the commercial expediency. 2. That on the fact and circumstances of the case the Ld. CIT(A)-9, Kolkata erred in deleting the addition of ₹ 1,21,442/- in respect of disallowance made u/s. 14A read with Rule 8D as the assessee firm made substantial investment in shares which were capable of yielding exempt income. 3. That the Appellant craves leave to put forward additional ground at the time of hearing. 22. The facts of both the issue in the year under appeal are identical to the facts for A.Y. 2012-13 except the amount involved and the sections under which the order has been passed. As the rest of the facts and circumstances are similar following our order in Para 9 to 15 of this order, we decide the effective grounds of appeal for under appeal against the AO. We hold accordingly. 23. In the result, Revenue s appeal is dismissed. Coming to assessee s CO No.42/Kol/2017 for A.Y. 13-14. 24. In the CO, the assessee has merely supported the impugned order of Ld. CIT(A), whereby he deleted the disallowance made by the AO. Since we have already uphold the order of Ld. CIT(A) giving relief to the assessee on this issue while dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1.50 lakh was added to the total income of assessee. 33. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who confirmed the order of AO in the absence of any documentary evidence filed by the assessee. Aggrieved by this, the assessee has come up in CO before us. 34. Before us Ld. AR submitted that the expense incurred the service charges were directly connected with the business and therefore it is eligible deduction. On the other hand, Ld. DR heavily relied on the order of Authorities Below. 35. We have heard the rival contentions of both the parties and perused the material available on record. At the outset, it was observed that Ld. AR for the assessee failed to bring any documentary evidence to justify the business connection for the payment of commission expense. In the light of above reasoning we hold that the order of the Ld. CIT(A) is correct and in accordance with law and no interference is called for. Hence, the ground raised by assessee in its CO is dismissed. 36. In the result, assessee s CO is dismissed. 37. In combine result, Revenue s appeals stand dismissed and that of assessee s COs No. 41/Kol/2017 stand dismissed and CO No.42/Kol/2017 d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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