TaxTMI 
TaxTMI 
2015 (2) TMI 248
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....the following Grounds of Appeal :- "1. On the facts and in the circumstances of the case and in law, the learned CIT(A), Aurangabad erred in deleting the addition of Rs. 1,23,600/- made by applying provisions of section 50C of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 15,21,946/- made on account of interest on advances for non-business purposes." 3. In brief, the relevant facts are that assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of dealing in all types of tea leafs, tea powder and sugar, etc.. For the assessment year 2009-10, it filed a return of income dec....
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....ction 50C of the Act he brought to tax the difference of Rs. 1,23,600/- (i.e. Rs. 13,23,600/- minus Rs. 12,00,000/-). 5. The CIT(A) noted that assessee had declared a business income of Rs. 9,55,080/- with respect to the impugned transaction and such income was offered to tax by the assessee @ 30% as it was a regular income. The CIT(A) further noted that if the income on sale of shops was to be treated as a capital gain, assessee would require to pay lesser tax i.e. @ 20%. Further, the CIT(A) noted that if the said shop was to be treated as a capital asset then the same was to be treated as a long term capital asset and assessee was to be entitled to the benefit of indexation while computing the long term capital gain. For all the above re....
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....of income from capital gains are applied to the present case, the resultant tax payable would be lower than what has been returned by the assessee. The aforesaid factual matrix has not been controverted by the Revenue before us and therefore, we affirm the order of the CIT(A) in deleting the addition of Rs. 1,23,600/- made by the Assessing Officer. Thus, on this aspect Revenue fails. 7. The second issue relates to an addition of Rs. 15,21,946/- made by the Assessing Officer on account of interest expenditure. In brief, the relevant facts are that the Assessing Officer noted that assessee had given interestfree advances of Rs. 1,34,00,000/- to the four parties. The Assessing Officer further noticed that assessee was paying interest on loans....
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....erated in the course of relevant financial year apart from substantial share holders fund, presumption stands established that the investments in sister concerns were made by the assessee out of interest free funds and therefore, no part of interest on borrowings can be disallowed on the basis that the investments were made out of interest bearing funds. In the case under appeal, the income returned by the appellant company for the year under appeal is Rs. 13,00,32,140/- and the interest free funds available on account of reserves/accumulated profit as on 31/03/2009 were Rs. 1398.43 Lakhs. In view of the above facts and the ratio laid down by the decision of Hon'ble Bombay High Court and also the decisions relied on by the appellant, no....
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....en dealt with by the CIT(A). The said aspect is in relation to a reference made by the Assessing Officer to section 14A of the Act. On this aspect, the CIT(A) noted that though the Assessing Officer has referred to section 14A of the Act in the discussion, yet no disallowance has been determined by invoking section 14A of the Act and instead the disallowance has been determined by making recourse to section 36(1)(iii) of the Act. However, the CIT(A) held that even in terms of section 14A of the Act, no disallowance was merited. In this context, the CIT(A) has made the following discussion :- "7.2.2 The disallowance u/s 14A is also not justified as the appellant is also engaged in the business of trading in shares and has declared profit fr....