TMI Blog2022 (1) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... - From the facts of the case, it is apparent that the assessee has furnished the particulars of the loan creditors such as name, address, PAN etc. It is also a fact that the transactions are routed through banking channels. In this situation, the Ld. Revenue Authorities ought to have made some further enquiry on this regard before making addition in the hands of the assessee. It is also apparent that the assessee had repaid the amount of ₹ 62,50,000/- to M/s. Kawrat Associates and also obtained confirmation statement from Sri Ganesh Associates. In this situation, we are of the view that the addition made by the Ld. A.O. which was further sustained by the Ld. CIT(A) is unwarranted. Hence, we hereby set aside the order of the Ld. CIT(A) on this issue and direct the Ld. A.O to delete the addition made invoking the provisions of Section 68. Revision u/s 263 - nature of payment received by the assessee- As per CIT-A amount received by the assessee is managerial remuneration and not professional fees - HELD THAT:- The assessee is a Doctor by profession and the assessee has got controlling interest in the Ravindranath GE Medical Associates Private Limited which is running hospi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the crux of the issue is that: The Ld. CIT(A) has erred in directing the Ld. A.O. to examine the nature of payment received by the assessee amounting to ₹ 3 Crs. ITA No. 535/Hyd/2018 4. The brief facts of the case are that the assessee is an individual earning income from medical profession, house property and other sources, filed his return of income on 30/09/2013 declaring total income of ₹ 1,75,80,550/-. Thereafter, the case of the assessee was taken up for scrutiny and assessment was completed vide order dated 29/03/2016 wherein the Ld. A.O. made addition of ₹ 80,96,491/- towards disallowance of interest expenditure and further made an addition of ₹ 3 Crs U/s. 68 of the Act towards unsecured loan received from M/s. Kawrat Associates and Sri Ganesh Associates of ₹ 1.5 Crs each. On appeal, the Ld. CIT(A) confirmed the order of the Ld. A.O. by agreeing with his view aggrieved by which the assessee is in appeal before us. 5. Ground No.(i) Disallowance of interest of ₹ 80,96,491/- 5.1. During the course of scrutiny assessment proceedings, it was observed by the Ld.AO that the assessee had utilised his borrowed funds for making i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fails on the face of it. The AO observed that from the balance sheet of RGEMAPL as on 31.03.2013 that the appellant holds only 29.36% equity shares whereas, M/s. Indivision India Partners, Mauritius is holding 47.60% of the shares. Therefore, the submission of the appellant that he has 65% of the controlling interest in the said company is incorrect. (vi) The contention that interest is allowable U/s.36(1)(iii) also does not hold any water for / the reason that the borrowed funds invested in the company were not incurred wholly and exclusively for the purpose of profession of the appellant. (vii) It is interesting to note that the appellant has not claimed interest to the extent of ₹ 4,92,28,255/- (out of total interest expenditure of ₹ 5,73,24,746/- only ₹ 80,96,491/- was claimed as interest expenditure). No rationale / basis has been furnished for only claiming a portion of interest expenditure as allowable expenditure. (viii) The appellant failed to show Commercial Expediency for the said investment in the company and therefore, is not covered by the ratio of Hon'ble Supreme Court in the case of SA Builders Ltd (supra). On the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the Ld. CIT(A) confirmed the order of the Ld. A.O. by observing as under: 9. I have carefully considered the issue and the submissions made by the AR. In respect of M/s. Kawrat Associates, the appellant failed to discharge the primary onus of furnishing confirmation letter from the creditor. It was contended that the appellant has repaid ₹ 62,50,000/- during the year under consideration, which establishes the genuineness of the borrowing. This argument of the AR is farfetched and misplaced. The requirements under the provisions of Section 68 are to prove the identity, genuineness and credit worthiness of the creditor. subsequent repayment of loan has no relevance on discharging of the onus cast on the appellant. It is worthwhile to note that no interest has been provided by the appellant for he said loan for the reasons best known to him. 9.1 With regard to M/s. Sri Ganesh Associates, the AO has brought out clearly the deficiency/discrepancies in the confirmation letter produced before her. These are significant discrepancies which couldn't be made up by the appellant to discharge the onus cast on him u/s.8 of the Act. It is worthwhile to note that in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Ganesh Associates. In this situation, we are of the view that the addition made by the Ld. A.O. which was further sustained by the Ld. CIT(A) is unwarranted. Hence, We hereby set aside the order of the Ld. CIT(A) on this issue and direct the Ld. A.O to delete the addition of ₹ 3 Crs made invoking the provisions of Section 68 of the Act. ITA No. 1087/Hyd/2018 11. The Ld Pr. CIT in his order observed that the assessee has received professional fees of ₹ 3 Crs from M/s. Ravindranath GE Medical Associates Pvt Ltd., and claimed expenditure of ₹ 1,22,98,908/-. The Ld. CIT(A) opined that the amount received by the assessee is managerial remuneration and not professional fees. Hence, he was of the view that the expenditure claimed by the assessee may not be allowable as deduction. Therefore, he set aside the order of the Ld. A.O. for the limited purpose of examining the nature of payment of ₹ 3 Crs received by the assessee. 12. At the outset, We do not find any merit in the order of Ld. PCIT. It is an admitted fact that the assessee is a Doctor by profession and the assessee has got controlling interest in the Ravindranath GE Medical Associates Priva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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