TaxTMI 
TaxTMI 
2013 (11) TMI 229
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....n money. 2 The ld. CIT(A) has erred in deleting the addition of Rs. 47,86,474/- on account of retention money." 3 Ground No. 1 - After hearing both the parties we find that during assessment proceedings the AO noticed that the assessee has not made payment of Rs. 59,81,538.84 to the Cane Growers as money was retained for the purpose of issuing share of the Society to such growers. On further enquiry it was submitted as under: "The share deduction money account amounting to Rs. 59,81,538/- reflected in the balance sheet under the head share capital is basically the share application money pending allotment which is taken from the growers in the form of deduction from the payments made to them and the same is purely capital in nature. It i....
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....me of the appellant. The addition has wrongly been made by the Assessing Officer and is accordingly deleted. Ground of appeal no. 2 is dismissed." We are of the opinion that the ld. CIT(A) has correctly adjudicated the issue because the money which remained payable to the Cane growers was ultimately adjusted by issue of shares which means the share capital has gone up and increased the liability of the assessee. Accordingly we find nothing wrong with the order of the ld. CIT(A) and confirm the same. 8 Ground No. 2 - After hearing both the parties we find that during assessment proceedings it was further noticed that the assessee has retained a sum of Rs. 47,86,474/-. On enquiry it was explained as under: "The retention money is a part of....
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....at same can be adjusted if there was a short fall in the supply by the farmers because under the agreement the assessee had a right to impose penalty for such short fall. In case no penalty is imposed this amount is settled through final payment. Accordingly we find nothing wrong in the order of the ld. CIT(A) and confirm the same. 14 In the result, appeal No. 650/Chd/2012 is dismissed. ITA No. 1256/Chd/2012 - Revenue's appeal 15 In this appeal the revenue has raised the following grounds: "1 The ld. CIT(A) has erred in facts as well las laws in deleting the addition of Rs. 671/-made by the Assessing Officer on account of share deduction money. 2 The ld. CIT(A) has erred in facts as well as law in deleting the addition of Rs. 22,91,833....
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....not made by the cane grower. If any penalty is levied on the cane grower, the same is squared up by way of transferring money from retention money account and the balance amount is paid to the members. It cannot be said that this amount, in any way, is income of the appellant. The addition of this amount has been wrongly made by the Assessing Officer and the same is deleted. Ground of appeal No. 3 is deleted." 22 in our opinion, the ld. CIT(A) has correctly adjudicated the issue because the money was retained by the assessee so that same can be adjusted if there was a short fall in the supply by the farmers because under the agreement the assessee had a right to impose penalty for such short fall. In case no penalty is imposed this amount ....
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....drej & Boyce Manufacturing Vs. DVIT, 328 ITR 81 (Bom). 28 On the other hand, the ld. DR for the revenue strongly supported the order of ld. CIT(A) and Assessing Officer. 29 After considering the rival submissions we find that the assessee had made detailed submissions before the ld. CIT(A) and therefore, it was wrong on the part of the ld. CIT(A) to say that this ground was not pressed. It has been held by Hon'ble Bombay High Court in case of Godrej & Boyce that rule 8D cannot have retrospective application and the same was applicable only for Assessment year 2008-09. At the same time reasonable disallowance has to be made. Therefore, considering overall circumstances of the case, we are of the opinion that against the dividend income of ....