TMI Blog2017 (12) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground of appeal raised by assessee is dismissed. Disallowances of service charges - no TDS made - CITA) confirmed the action of AO holding that the assessee has admitted that no TDS has been made. Secondly, the assessee had debited the expenses on the basis of debit notes sent be service provider. The said expenses have not paid by the assessee and claimed as not payable to Tripura on line Lottery so the expenses were not paid wholly and exclusively for the purpose of business - Held that:- We have noted the assessee has not placed on record any material to convince us to take a contrary view; hence the ground of appeal raised by assessee is dismissed. Lottery terminal charges and logistic paper charges - non deduction of TDS as the provisions of section 40(a)(ia) are applicable - CIT(A) confirmed the action of AO on both the disallowance holding that the assessee has admitted that no TDS has been made - Held that:- The assessee had debited the expenses on the basis of debit notes sent be service provider. The said expenses have not paid by the assessee and claimed as not payable to Tripura on line Lottery so the expenses were not paid wholly and exclusively for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al: - 1. On the facts and in the circumstances and in law, the learned C.I.T. (A) erred in upholding the validity of the proceedings initiated u/s 147 of the I.T. Act. 2. On the facts and in the circumstances and in law, the learned C.I.T. (A) erred in upholding the validity of the assessment order passed u/s 143(3) r.w.s.147 of the I.T. Act. 3. On the facts and in the circumstances and in law, the learned C.I.T. (A) erred in confirming the action of the A.O. and upholding the addition made of ₹ 6,21,306/- u/s 2(22)(e) of the Act. 4. On the facts and in the circumstances and in law, the learned C.I.T. (A) erred in confirming the action of the A.O. and upholding the disallowance of service charges amounting to ₹ 34,18,011/- 5. On the facts and in the circumstances and in law, the learned C.I.T. (A) erred in confirming the action of the A.O. and upholding the disallowance of EMI lottery terminal charges amounting to ₹ 15,36,000/- 6. On the facts and in the circumstances and in law, the learned C.I.T. (A) erred in confirming the action of the A.O. and upholding the disallowance of logistics paper charges amounting to ₹ 7,82, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,093/- in their balance sheet as at 31.03.2006. Since Mr. Narendra Kothari is having substantial (94.54%) interest in the company M/s Model Sales Agency Pvt. Ltd., which has advanced loan to companies/ concerns in which Mr. Narendra Kothari is having substantial interest, the provisions of section 2(22)(e) are applicable. I, therefore have reason to believe that income has escaped assessment in the hands of Mr. Narendra Kothari for the A.Y. 06-07 needs to be reopened as per provision of section 147 of the I.T. Act. 1961. 4. The assessee filed its objection vide letter dated 01.12.2010 and again on 08.12.2010. The objections of the assessee were not accepted by the AO and proceeded to make re-assessment of the income. The assessment was completed under Section 143(3) r.w.s 147 on 30.12.010. The AO while passing the assessment order made following additions: - Addition under Section 2(22)(e) Rs.6,21,306/- Service Charges Rs.34,18,011/- EMI Lottery terminal charges Rs.15,36,000/- Logistic paper charges Rs.1,01,997/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the assessment of M/s. Model Sales Agency Pvt. Ltd. Thus, in our opinion this information was sufficient to make a belief by the AO that income has escaped assessment. Thus the reopening of assessment was valid. The assessee has not paced on record any material to prove the facts otherwise. Thus, the re-opening of assessment under section 147 is valid. In the result the ground No.1 2 are dismissed. 8. The ground No.3 relates to the addition of deemed dividend under Section 2(22)(e) of ₹ 6,21,306/-. The AO treated the advance as deemed dividend holding that the assessee was having substantial interest of 94.54% in Model Sales Agency Pvt Ltd which has advanced loan to the concern. The ld CIT(A) confirmed the action of AO holding that in a company where the public have no substantial interest may not recover the loans or allow them to be barred by time, which would be that the amount of loan would become the income of the shareholder and they would not meet the requirement to pay the tax on such income. We have seen that the assessee has not placed on record any material to convince us to take a contrary view; hence the ground of appeal raised by assessee is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) challenging these disallowances. We have noted there is no adjudication of these grounds of appeal by ld CIT(A). Even otherwise the assessee has not filed any documentary evidences to substantiate his claim that all expenses were made wholly and exclusively for business. Hence, this ground of appeal is also dismissed. 13. Ground no.9 related to disallowance under section 14A. The AO made the disallowance as per Rule 8D and disallowed ₹ 5,65,514/-. The ld CIT(A) partly sustained the disallowance @ 5% of the exempt income on the basis of decision of Hon ble Bombay High Court in Godrej Boyce Manufacturing Company Ltd. Vs DCIT [2010] 234 CTR1. We have seen that in absence of any explanation or documentary evidences on record the disallowance sustained by ld CIT(A is reasonable one. Hence, this ground of appeal is also dismissed. 14. Ground No10 relates to denial of benefit of section 10(36) of the Act. The AO denied the benefit of section10 (36) for the want of evidence. The ld CIT(A) confirmed the action of AO that no proof was furnished by assessee even at the stage of appeal. We have not that the assessee has not placed any evidence before us except raising the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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