TaxTMI 
TaxTMI 
2018 (10) TMI 1352
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....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 the purchase of the flat That was provided as residential accommo....
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....o 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, Dadar (E), Mumbai. The total value was capitalized in balance-sheet. The assessee was engaged ....
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....owed 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 of the assessee regarding purchase of the flat in sum of Rs. 3,47,20,373/- along with ancillary claim....
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....r 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 finding of the CIT(A) is not justifiable in view of the law settled in Union of India Vs. Azadi Bachao Andol....
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..... 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 Act is not justifiable, therefore, ancillary claim is also not liable to be declined. So far as disallowanc....