TaxTMI 
TaxTMI 
2018 (5) TMI 145
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....rms of Section 2(22)(e) 53,98,617/- 5 Disallowance of interest expense 2,56,006/- 6 Disallowance of business promotion expenses 1,00,000/- 7 Disallowance of telephone and car expenses 1,77,868/- 8 Disallowance on account of low withdrawal for household expenses 1,20,000/- 3. In the appeal preferred, learned CIT(A) by way of impugned order, deleted the disallowances at S.Nos.1,2,4 and restricted the disallowance in respect of Item No.3 above to 10% as against 25% disallowed by the AO. Learned CIT(A) confirmed the other additions. 4. Aggrieved by the order of the learned CIT(A) sustaining the disallowance of advertisement expenses to 10% and the other additions made by the AO vide S.Nos.5 & 8, assessee preferred ITA No.5820/Del/2010 whereas challenging the deletion of the disallowance u/s 40(a)(1a), 40A(2)(b) and 2(22)(e) of the Act and also restriction of the disallowance on account of the advertisement expenses to 10% as against 25% levied by the AO, the Revenue is in appeal in ITA No.693/11. 5. In so far as disallowance u/s 40(a)(ia) of the Act is concerned, case of the assessee is that assessee is a real estate dealer on commission basis and dealing i....
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....dealt with by the Tribunal in ITA Nos.4854/Del/2010 and 4555/Del/2010 for Asstt. Year 2007-08 and answered similarly. In ITA No.4142/Del/2012 in the case of Surendra Buildtech P. Ltd., the Hon'ble jurisdictional High Court also held the issue in favour of the assessee. In ITA No.4996 and 4930/Del/2012 for asstt. Years 2006-07 and 2008-09, a coordinate bench of this Tribunal by order dated 30.6.2013 held the issue in favour of the assessee. 9. In view of this consistent view taken by the first appellate authority as well as the Tribunal and the Hon'ble High Court, we do not find any reason to interfere with the finding of the learned CIT(A) on this issue. As such, ground No.1 of revenue's appeal is dismissed. 10. Now coming to the issue relating to the disallowance u/s 40A(2)(b) of the Act, this relates to the disallowance of commission paid to sub brokers, namely, Mr. Vinay Mukhija and one Ms Shruti Agarwal. Ld. AO is of the clear opinion that the payment of the commission to the sub brokers is common in the line of business of the assessee. However, he disputed these two particular payments. Firstly, on the ground that the payment to Mr. Vinay Mukhija appears to have been covere....
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....ed on such payments. Since the clipping of the newspapers is very voluminous, the assessee produced various cuttings of newspapers in which the advertisement was published and at no point of time, the learned AO pointed out any item which was not vouched. In the absence of any defect being pointed out, it is not open for the authorities below to make any disallowance of the expenses. 15. We have gone through the record. There is no dispute as to whether or not the assessee incurred this expenditure. Further, there is no denial of the fact that the assessee produced the copy of the account of the advertisement expenditure as maintained in the books of accounts, invoices besides stating that the TDS had also been deducted on such payments. Explanation offered by the assessee for inclusion the name of M/s Surendra Buildtech P. Ltd. was only for this business of the assessee inasmuch as the inclusion of such name will boost the psychological confidence of the prospective buyer and induced them to invest their hard earned money in the pre launched booking because of the persons of group concern. 16. We do not find any abnormality in this submission on behalf of the assessee because to....
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....unil Chopra (2010) 2 ITR (Trib) 469 (ITAT Delhi); (iii) CIT vs Ambassador Travels P. Ltd. (2009) 318 ITR 375 (Del), Learned CIT(A) reached a conclusion that this kind of transactions do not fall within the ambit of Section 2(22)(e) and on that premise he deleted the addition of Rs. 33,98,617/-. 20. In so far as Rs. 20 lacs advanced to Shri S.M. Mukhija (HUF), ld. CIT(A) found that any amount given as loan or advance to another person cannot be taxed in the hands of the assessee and inasmuch as Shri S.M. Mukhija is a separate person from the assessee for income-tax purposes, any loan or advance given to him cannot be taxed in the hands of the assessee and at best that can be considered in the hands of Shri S.M. Mukhija (HUF). He, therefore, deleted the addition of Rs. 20 lacs. 21. Revenue failed to demonstrate before us that the findings of the learned CIT(A) are factually incorrect. Record reveals that at one point of time, the assessee is having credit balance and at times he is having debit balance. It justifies the submissions on behalf of the assessee that in view of peculiarities involved in this line of business depending upon the need, there is exchange of money between di....
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....AR that if the AO or CIT(A) are not sure as to the purpose so mentioned in the application to the bank, it is within their powers to verify the same by exercising the powers under the Act from the bank. Instead of doing what is to be done under the law, the authorities below based their conclusions on suspicion; whereas Ld. DR justified the findings of the Ld. CIT(A) on the grounds recorded by him. 25. On a consideration of the submissions on either side, we are of the considered opinion that if at all the authorities below wanted to know the reliability of the document submitted by the assessee to ICICI bank for the end use of the loan amount, nothing prevented them from verifying the same from ICICI bank as to whether they had approved the same or not. Further, in CIT vs Goyal Gases, 173 Taxman 34, the Hon'ble jurisdictional High Court held that even though initially the amount has been borrowed for certain other purposes but utilization has been made for the purpose of business, the interest paid on such loan is allowable as business expenditure. In this case, there is no fact finding of the authorities below to the effect that the loan was not utilized for business. In the abs....