TaxTMI 
TaxTMI 
2017 (12) TMI 796
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....ing the disallowance made u/s. 14A read with Rule 8D despite the express mandate to do so u/s. 14A of the IT Act. 2. On the facts and in the circumstances of the case, Ld. CIT(A) erred in that no disallowance u/s. 14A read with Rule 8D can be made when there is no exempt income despite there being no such condition stipulated in the IT Act. 3. On the facts and in the circumstances of the case, Ld. CIT(A) erred in deleting the addition of Rs. 2 crores being payment made to M/s. Maginot Trading Company thereby disregarding the admission of bogus accommodation entry by Shri Balakrishna Goenka and also the evidence found in the seized material. 4. On the facts and in the circumstances of the case, Ld. CIT(A) erred in ....
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....on'ble Delhi High Court. Furthermore, the Hon'ble jurisdictional High Court in the case of Pr. CIT vs. Ballarpur Industries Ltd. in ITA No. 51 of 2016, it has been held as under: By this income tax appeal the appellant-Department challenges the orders of the Commissioner of Income Tax and the Income Tax Appellate Tribunal, Nagpur. On hearing the learned Counsel for the Department and on a perusal of the impugned orders, it appears that both the Authorities have recorded a clear finding of fact that there was no exempt income earned by the assessee While holding so, the Authorities relied on the judgment of the Delhi High Court in Income Tax Appeal No. 749/2014, which holds that the expression "does not form part of the....
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....ing Officer to examine as to whether the assessee has earned exempt income or not. If the assessee has not earned any exempt income, then as per the ratio emanating from the above, the Hon'ble jurisdictional High Court decisions, no disallowance u/s. 14A is required. Needless to add, the assessee should be granted adequate opportunity of being heard. Accordingly, we uphold the same. Apropos addition of Rs. 2 crores of bogus accommodation entry: 8. The order of the Assessing Officer in this regard making disallowance of Rs. 2 cores reads as under: 7. Bogus Billing: 7.1 Assessee has debited bogus expenditure amounting to Rs. 2,00,00,000 under the head 'Land Development' in the name of M/s. Maginot Trading Co. Pvt. ....
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....-l. An enquiry was conducted at the address given in the memo, however, no such party was found to be existing at either of the addresses given in the memo. Please furnish the address of this party and explain the transactions with them? Ans: The payments made to M/s. Maginot Trading Co. Pvt. Ltd., amounting to total of Rs. 5 Cr, in the current financial year, made on account of supply of muram at the Raigad site of M/s. Welspun Maxsteel Ltd., is nothing but an accommodation entry arranged by one of the broker for generation of cash by debiting bogus expenses. I confirm that we have taken an accommodation entry to generate cash for expenditure. I have also taken a similar entry in the accounts of M/s.Welspun Syntex Ltd., for an amo....
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....claimed any deduction of whatsoever nature in respect of Land development expenses nor any deduction on account of depreciation was claimed thereon. The disallowance of any expenses presuppose the claim of deduction of such expenses which is absent in this case. Therefore, in my opinion the addition made by the AO is unwarranted and liable to be deleted from the hands of the appellant. Even otherwise also the phraseology used in section 69C in respect of unexplained expenditure shows that for invoking the provisions of section 69C, the condition precedent is to establish the existence of expenditure not explained satisfactory by evidence or material on record. In the case of the appellant, payment of Rs. 2 crores was made to M/s. Maginot Tr....
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....actions with them. Ans: The payments made to M/s. Maginot Trading Co.Pvt. Ltd., amounting to total of Rs. 5.Crores, in the current financial year, made on account of supply of muram at the Raigad site of M/s. Welspun Maxsteel Ltd., is nothing but an accommodation entry arranged by one of the broker for generation of cash by debiting bogus expenses. I confirm that we have taken an accommodation entry to generate cash for expenditure. I have also taken a similar entry in the accounts of M/s. Welspun Syntex Ltd., for an amount of Rs. 2 Cr. in the current financial year. I take this opportunity to surrender this amount of Rs. 7 Cr.(Rs.5 Cr. In the hands of M/s. Welspun Maxsteel Ltd., & Rs. 2 Cr. In the hands of M/s.Welspun Syntex Ltd.)....