2017 (2) TMI 1094

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....ereinafter 'the Act'). 2. The first issue in this appeal of assessee in ITA No.1694/Mum/2016 is as regards to the order of CIT(A) confirming the disallowance made by AO by invoking the provision of section 14A of the Act, qua expenses relatable to exempt income amounting to Rs. 8,63,15,825/-. 3. At the outset, the leaned Counsel for the assessee first of all took us through the order of Income Tax Settlement Commission dated 28-11-2004 passed u/s  245D (4) of the Act. He took us through the final finding of Settlement Commission at page no.61 in Para 28.6, wherein the settlement commission has restricted the disallowance at Rs. 4,27,76,189. The relevant to Para 28.6 was read by the learned Counsel which reads under: - "28.6 In view....

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....o this addition only. When this was confronted to the learned CIT DR, he objected to the same. 5. After hearing the rival contentions and gone through the facts of the case, we find that this issue is settled by Income Tax Settlement Commission in its order vide settlement application No.MH/MUCC-4/118/2012-13/IT for the A.Y. 2008-09, the year under consideration, and restricted the disallowance at Rs. 4,24,76,189/-. We direct the AO to adopt the Income as directed by the Income Tax Settlement Commission. This issue of assessee's appeal is partly allowed. 6. The next issue in this appeal of assessee is against the order of CIT(A) confirming the disallowance of expenses for non-deduction of TDS u/s 40a(ia) of the Act amounting to Rs. 31,71,....

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....group entities. * Depreciation on sample flats. We have considered the submissions made and the Report of the Director of Income Tax (Investigation). We are in agreement with the view of DIT (Inv.). Further in the absence of any comments by the Department no disallowance is called for as regards the above six issues." 8. We have gone through the order of Settlement Commission and find that the issue is adjudicated and hence no disallowance can be made by the AO. The orders of the lower authorities are set aside and this issue of assessee's appeal is allowed. 9. The next issue in this appeal of assessee is against the order of CIT(A), giving the direction to the AO to reduce the value of investment reflected in the balance sheet of the....

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....appellant company has purchased of Odeon Theater Pvt. Ltd. for Rs. 31,26,65,954/- including brokerage of Rs. 66,90,000/-, the cost of which is reflected in investments in Balance Sheet. It is further submitted that the brokerage of Rs. -66,90,000/- was not debited to the Profit & Loss Account and therefore, the same should not be considered for disallowance u/s. 40(a)(ia) of the Act. 30. Since the payment made is capitalized, there is merit in the contention that addition cannot be made to the taxable income. Tus the taxable income computed in the current year will not be affected by this. The amount of investment reflected in the Balance Sheet should be treated as lower to the extent of brokerage on which TDS was not effected. The assess....