9911796707
TMI Blog2022 (7) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal: "1. That under the facts and the law, the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.2,72,157/- towards loss from other source and set off u/s.71 of IT Act, 1961. Prayed to allow the loss of Rs.2,72,157/- to bet set under the head income from business as per section 71 of IT Act, 1961. 2. That under the facts and laws, the learned CIT(A) further erred in confirming the addition of Rs.23,21,099/- by wrongly estimating accrued interest on loan. The bank guarantee invoked by the bank Rs.12,75,000/- has not been considered by the learned CIT(A) while deciding the case. It was also ignored by the learned CIT(A), that the return of income were filed u/s.44AD of the Income Tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t without any success. 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 6. We have heard the Ld. Departmental Representative (for short 'DR), perused the orders of the lower authorities and the material available on record. Controversy involved in the present appeal hinges around three issues, viz. (i) disallowance of the assessee's cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady given full effect, the A.O declined the assessee's claim for set-off of the aforesaid amount of business expenditure against his deemed income disclosed u/s.44AD of the Act. 8. After having given a thoughtful consideration to the aforesaid issue, we find substance in the view taken by the A.O that now when the assessee had opted to disclose his income under the deeming provisions of section 44AD of the Act, then, it was not permissible on his part to have separately claimed set-off of the aforesaid expenses as the same were to be deemed to have been already given full effect while computing his income under the aforesaid deeming provision. The mandate of law to the said effect can safely be gathered from a perusal of sub-section (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in making/sustaining the addition of Rs.23,21,099/- u/s.43B(e) of the Act. Controversy qua the issue in hand lies in a narrow compass. During the assessment proceedings it was observed by the A.O that the assessee had incurred interest expenditure on the secured loans raised from Bank of India, as under: Description of bank a.y.09-10 a.y.08-09 Increment (Interest) BOI c/c a/c 30340003 Rs.1,12,77,208/- Rs.94,53,284/- Rs.18,23,924/- BOI T/L A/c. No.70230038 Rs.48,60,849/- Rs.45,28,830/- Rs.3,32,019/- BOI T/L A/c No.9470626100000001 Rs.37,69,519/- Rs.36,04,363/- Rs.1,65,156/- Total Rs.23,21,009/- Observing, that neither the assessee had acquired any depreciable asset nor there was any change in his stock duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 385/- out of total contract receipt of Rs.1,88,96,707/- and out of this amount the assessee paid interest of Rs.36,28,649/-, claimed depreciation of Rs.5,00,054/-. Hence for a.y.08-09 the proportionate expenses against the total receipt is 23.82%. Therefore, for a.y.09-10, proportionate contract receipt against the amount of Rs.27,56,813/- [Interest Rs.23,21,099/-+ depreciation Rs.2,03,321/-+ income Rs.2,32,393/-] will be Rs.1,15,73,522/-. Against this receipt, I estimate an amount of Rs.9,25,881/- @8% on the total civil contract turnover of Rs.1,15,73,522/-............" After recasting the financial results of the assessee it was concluded by the A.O that as the assessee had claimed as an expenditure bank interest of Rs.23,21,099/- but ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of bank interest of Rs.23,21,099/-u/s.43B(e) of the Act is concerned, we are unable to find favour with the same. In our considered view, now when the assessee had disclosed his income u/s.44AD of the Act, therefore, no disallowance of the aforesaid amount was called for in his hands. As the disallowance u/s.43B presupposes raising of a claim for deduction, therefore, now when in the case before us the assessee had not sought any deduction of bank interest of Rs.23,21,099/-, there could have been no justification in disallowing the same. We, thus, in terms of our aforesaid observations are unable to sustain the disallowance of bank interest of Rs.23,21,099/- made by the A.O u/s.43B(e) of the Act. Accordingly, the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
