TaxTMI 
TaxTMI 
2016 (8) TMI 68
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....irst we take up ITA No.1253/Mds./15 (A.Y. 2006-07). 3. The first ground in this appeal is with regard to disallowance of notional expenditure at Rs. 2,84,062/- u/s.14A of the Act. 4. The facts of the issue are that the AO had disallowed notional expenditure at Rs. 2,84,062/- u/s.14A of the Act. The assessee had invested in shares and had earned dividend income. The AO found that the assessee had not claimed any expenditure relatable to exempted income. There is total cumulative investment up to the end of financial year amounting to Rs. 5,68,12,236/-. Therefore, the AO had disallowed 0.5% of investments i.e. Rs. 5,68,12,236/-, that comes to Rs. 2,84,062/-. Aggrieved, the assessee carried the appeal before the Ld.CIT(A). On appeal, the....
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....s security deposit, which shall be refunded by the landlord on satisfaction of the terms of the contract. As per terms of the contract, the assessee is under obligation to construct a pent house but due to non- approval of the permission from local authorities, the assessee could not construct the pent house. Hence, it is claimed that the landlord did not return the deposit as the assessee failed to satisfy the terms of the agreement. Relevant portions of the agreement are as follows: "10. The second party has paid an amount of Rs. 30,00,000/- (Rupees Thirty lakhs only) by way of cheques as security deposit interest free for due performance of the contract which the first party shall return without interest after completion of the first ....
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....d compensation. The P&L A/c for the account year ending 31st March 2006, shows the same amount under the head 'provisions for claims and compensation". Further CIT(A) observed that the said amount is a provision for compensation. This cannot be treated as bad debt written off, as it is still appearing in the balance sheet. This is also cannot be treated as a trading loss. This amount was deposited as security deposit. Therefore,, it is capital in nature. Thus CIT(A) observed that the said amount cannot be held as an expenditure and confirmed the order of AO. 9. We have heard both the parties and perused the material on record. The amount of Rs. 30 lakhs was still appearing in the balance sheet of assessee under the head "'provisions for ....
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....ssessee. 14. The facts of the case are that the assessee is the Managing Director of Allu Entertainment Private Ltd.(AEPL). During the F.Y 2004- 05, AEPL has taken two Key Man Insurance Policies each amounting to Rs. 100 lakh on the life of the assessee. Of which, one policy was assigned in favour of the assessee on 31.03.2006. The surrendered value of the policy amounting to Rs. 58,74,752/- was offered as income taxable as perquisite u/s.173(3) of the Act in that year itself i.e. assessment year 2006-07. Subsequently, the assessee en-cashed the policy at Rs. 97,03,083/- on 29.06.2006. The AO has added the sum of Rs. 38,28,331(Rs. 97,03,083 - Rs. 58,74,752). Against this, assessee carried the appeal before the CIT(A). 15. On appeal, t....
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....urrender value. in the above mentioned case there are two situations after assignment. (1) employee does not continue the policy and does not pay further premiums, then he would get only surrender value; or (ii) employee continues the policy and pays subsequent premiums, then he would get full amount on maturity. in the case of Rajan Nanda supra, second situation has occurred as on assignment, the director assessee did not surrender the same to the LIC and chose to continue with the policy by making payment for remaining period of the policy. In that case the court held that the character of the insurance policy changes and it gets converted into an ordinary policy. The CIT(A) observed that in the present case before CIT(A) no prem....