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TMI Blog2017 (4) TMI 1561X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment u/s. 143 (3) of the Act, on 20/12/2010, determining its income at Rs. 5.43 crores. 2. First ground of appeal is about confirming the addition of Rs. 1.15 lakhs, being difference between royalty income as per the books and as per tax deducted at source certificates. During the assessment proceedings,the AO found that there was difference in the amount of tax deducted at source. He directed the assessee to reconcile the difference. After considering the submission of the assessee, the AO held that assessee could reconcile the difference to the extent of Rs. 14.85 lakhs out of the total difference of Rs. 15.02 lakhs, that it had not disclosed income of Rs. 1.5 lakhs on account of royalty whereas it had claimed the tax deducted at s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o afford a reasonable opportunity of hearing to the assessee, who would submit all the necessary papers before the AO with regard to royalty received. Accordingly, first ground is decided in favour of the assessee, in part. 3. Next ground is about disallowance of Rs. 23 155 lakhs made u/s. 36(1)(ii) of the Act, being commission paid to one of the directors. The AO found that the assessee had paid an amount of Rs. 47,10,386/- to its Director as commission, that both the directors were paid Rs. 23.55 lakhs each, that one of the directors was a major stake holder in the company. He asked the assessee as to why commission paid to Sh.Atul Bhagwati(AB) should not be disallowed as per the provisions of section 36(1)(ii) of the Act. In its reply, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard Resolution, that in the earlier year similar expenditure was allowed by the AO, that the director had paid taxes on the commission received, that the higher slab of tax rate was applicable in both the cases. Considering these facts, we are of the opinion that the order of the FAA cannot be endorsed. Ground No.2, is decided, in favour of the assessee. 4. Last effective Ground of appeal (GOA3 -4)deals with disallowance on account of depreciation and repair and maintenance of Rs. 4.45 lakhs and Rs. 1.15 lakhs respectively. During the assessment proceedings, the AO found that, the assessee had credited an amount of Rs. 50.31 lakhs as rental income for the year ended on 31/03/2008, that it had treated Rs. 46.34 lakhs out of the entire rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by assessee were deductible. He referred to pages-36(1)(ii) and 45 of the PB. The DR supported the order of the FAA. 4.3. We find that the FAA had specifically mentioned that the assessee had not filed the full audit report during the appellate proceedings, that the assessee was using its Mumbai property as commercial asset, in absence of correct and full details the AO and FAA had made and upheld the disallowance. Considering the peculiar facts and circumstances of the case, we are of the opinion that matter should be restored back to the file of AO for fresh adjudication. He is directed to afford a reasonable opportunity of hearing to the assessee and decide the case accordingly. Both the grounds are decided in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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