TaxTMI 
TaxTMI 
2018 (10) TMI 1352
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....d. ClT (Appeals) erred in confirming the conclusion of the Assessing Officer that the flat purchased for providing residential accommodation to its Managing Director is a "Non-Business Transaction" of the appellant. 2 On the facts and in the circumstances of the case, Ld. CIT(Appeals) erred m confirming the conclusion of the Assessing Officer that the cost of the flat that was provided as residential accommodation To the Managing Director is a deemed dividend within the meaning of Section 2(22)(e) of The Act. 3. On the facts and in The circumstances of the case, Ld. CIT(Appeals) erred in confirming the disallowance of Rs. 22,72,715/- being the repayment of loan installment during the year in respect of the loan availed for....
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....bstantially interested, engaged in the business of 'specialty eye care hospital' and there was no change in assessee's business of the assessee during the year under consideration. The assessee purchased the residential flat at Dadar for which the total value was capitalized in the books to the tune of Rs. 3,47,20,373/-. The assessee claim the depreciation claim @ 10% to the tune of Rs. 34,72,037/- as against the allowable claim to the extent of 5% as per the Income Tax Act. The notice was given and after the reply of the assessee, the depreciation was reduced @ 5% of the cost of flat to the tune of Rs. 17,36,019/-. The assessee purchased the residential property bearing flat no.602 in the building namely Ornate Galaxy, located at L.T. Road....
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....l repaid during the year under consideration. The total in sum of Rs. 47,35,000/- which was disallowed u/s 37(1) of the Act. The claim regarding the electricity in connection with the flat in question to the tune of Rs. 40,772/- and foreign travel expenses to the tune of Rs. 1,77,746/- was also disallowed and added to the income of the assessee. The total income of the assessee was assessed to the tune of Rs. 1,04,07,420/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the order of the AO, therefore, assessee has filed the present appeal before us. ISSUE Nos. 1 to 6:- 4. Issue nos. 1 to 6 are inter-connected, therefore, are being taken up together for adjudication. Basically, the AO declined the claim....
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....t for his CMD where he can treat the patient of the hospital very conveniently when the residence is near to hospital, therefore, it is a business necessity, accordingly the finding of the CIT(A) is not justifiable. It is also argued that the loan was taken by assessee company and the claim in connection with the loan was also denied wrongly and illegally, therefore, the finding of the CIT(A) is not justifiable. It is also argued that the AO cannot dictate his term and is not entitled the interfere in the business decision of the assessee company, therefore, the finding of the CIT(A) is not justifiable. It is also argued that the transaction if any can be considered as tax planning which is not against the law and facts, therefore, the find....
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....ing on the part of the assessee company but there is no violation of any provision of the Income Tax Act. The claim of the assessee is not liable to be declined. In this regard, we also find support of law settled in case titled as Union of India Vs. Azadi Bachao Andolan 263 ITR 706 (SC), Madras High Court in M.V. Vallipan Vs. CIT 170 ITR 238 & Bhoruka Engg. Ltd. Vs. DCIT 356 ITR 25. The assessee company neither transferred the funds outside the company nor to the director, therefore, the provision of Section 2(22)(e) of the Act is not applicable to the facts of the case. Accordingly, we set aside the finding of the CIT(A) in this regard. Since the finding given by lower authorities attracting the provision of Section 2(22) (e) of the Ac....