TaxTMI 
TaxTMI 
2013 (10) TMI 784
X X X X Extracts X X X X
X X X X Extracts X X X X
....ess activity instead of verifying the genuineness of revised agreement with the other party with whom the receipts are shared. 3. The learned CIT(A) erred in confirming disallowance of interest of Rs.56,18,466 on the ground that there is diversion of borrowed funds to M/s.Mohan Project contractors without appreciating the fact that it is advanced for business purposes and not otherwise. 4. The learned CIT(A) erred in confirming disallowance of expenses of Rs.5,38,219 being 10Yof the expenses claimed that is made by the AO on the ground that similar such disallowance was made in the earlier year and that the assessee has not produced bills and vouchers for all expenses, without appreciating the fact that the AO has not specified as to what is the quantum of expenditure for which bills and vouchers are not produced. 5. The learned CIT(A) while confirming disallowance of expenses of Rs.5,38,219 ailed to appreciate the fact that the accounts of the company are audited and that the auditors have not pointed out any omission or failure on the part of assessee to produce bills and vouchers and thereby erred in confirming the disallowance of Rs. 5,38,219 . 2. Briefly stated facts of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch document has been filed/placed on record, after the completion of assessment and on any case, having regard to such admission made by the appellant vide their letter filed on 30.01.2009. CIT(A) held that the said agreement stipulating for payment of 15% of the maintenance receipts to M/s. Deep Corporation Pvt. Ltd., was actually in force during the current previous year and hence that amount of Rs.12,75,855/-, which has been short admitted by the assessee in its gross revenue, is liable for addition in the hands of the assessee for this Assessment Year 2007-08. CIT(A) further held even though the assessee states that M/s. Deep Corporation Pvt. Ltd., which is an associate concern of the assessee, has shown income in their case, taking into account 20% of such maintenance receipts, on basis of such plea, it cannot be accepted that the assessee has shown its receipts correctly for this assessment year. Since, the assessee has to share only 15% of the maintenance receipts (excluding common area receipts), received from the tenants during the previous year, which fact has already admitted before the AO on 30.01.2009, as stated above, it clearly shows that the assessee has suppressed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has been utilized in giving interest-free advance to Mohan Project Contractor Pvt. Ltd., has not been utilized for the business purpose of the assessee, the interest attributable to the said amount given to that concern, cannot be allowed deduction in the hands of the assessee and the interest on the loan taken by a third party Mohan Project Contractors Pvt. Ltd, cannot be allowed deduction against the taxable income of the assessee for the Asst. Year 2007-08, which has arisen wholly from maintenance of a building. Therefore, CIT(A) opined that such disallowance of interest made by the AO in the assessment order is justified. The CIT(A) observed that the assessee has referred to the decision of the Hon'ble Supreme Court in S.A. Builders Ltd., (supra), in support of its claim for deduction of interest. However, it has not been explained as to how there was commercial. expediency in giving such advance to that company after taking a loan from HDFC Bank during the previous year. CIT(A) further observed that merely on basis of such verbal contention, it cannot be accepted that the said amount was given free of interest to that concern for business purpose. In fact, the assessee has fai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee company at @ 80% as per revised agreement filed amounted to Rs.2,01,07,979/- and the share of the owner was Rs.48,33,805/-. It was submitted that in the balance sheet of Deep Corporation Pvt. Ltd., the operational income shown at Rs.7,32,88,884/-, includes the said share of Rs.48,33,805/-. It was stated that the A.O. wrongly followed the old agreement, as per which 15% has to be paid to the owner of the building. With these submissions and stating that such amount was wrongly added by the A.O. in the assessment order the learned A.R. requested that the same may be deleted. 12. The learned Counsel for the assessee Shri A.V. Raghuram, also stated that the audited final accounts show that 20% of the gross maintenance received has been shared with the owner and has been shown by the other party which can be verified. 13. In these circumstances, we deem it fit to restore the issue to the file of the Assessing Officer to verify the accounts and examine whether the amount of 20% has been shown in the hands of the owner as his share and verify the genuineness of the revised agreement with the other party and if the Assessing Officer finds the verification to be positive, he shal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee has not brought out evidence to substantiate that the advance has been given for business purpose of the assessee company. Hence, we remit the issue to the file of the Assessing Officer to give one more opportunity to the assessee to place on record the material to show that such advance was given for commercial expediency and the Assessing Officer shall after giving an opportunity to the assessee decide the issue in accordance with law. 17. With respect to ground Nos. 4 and 5, the learned Counsel for the assessee Shri A.V Raghuram, submitted that while objecting to such disallowance made by the A.O. in the assessment, the learned AR submitted that principle of res-judicata does not apply to Income Tax assessment proceedings. Stating that each assessment year is separate and distinct, the learned AR contended that such disallowance made by the AO is not justified. 18. We find that the assessee has not been able to produce all bills and vouchers in respect of the claim of expenditure. The assessee has not brought out any evidence to prove that 10% of expenditure should not be disallowed as in the preceding year. Since, no new proof has been given for this year distingui....