TaxTMI 
TaxTMI 
2014 (1) TMI 1851
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....t of unrealized sales without appreciating the fact that the assessee has accounted for 90% of the sales on Mercantile basis and remaining 10% on cash basis, which was in contravention of Sec. 145 of the Act. 2. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 27,36,668/- u/s. 14A on account of interest and Rs. 1,00,000/- for administrative expenses without controvorting the judicial decisions relied upon by the AO and not considering the decision of Delhi High Court in the case of Moxopp Investment Ltd. (347 ITR 272)." 3. The first ground of appeal relates to addition of unrealized sales amounting to Rs. 40,32,955/-. The observation of the AO while making this addition was summarized by Ld. CIT(A....
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....8 ITO381." 4. In the first inning the Hon'ble ITAT vide its order dated 30-08-2011 restored the matter back to the file of Ld. CIT(A) with following direction:- "5.2. In the instant case before us, the Ld. CIT(A) did not analyse the relevant terms and conditions of various contracts in relation to retention money nor recorded his specific findings as to the method of accounting regularly followed by the appellant. As is apparent the impugned order suffers from lack of reasoning and is not a speaking order. The Ld. CIT (A) without going into the terms and conditions of the relevant contracts, merely upheld the findings off the A 0. In view of the foregoing, especially when the Ld CIT(A) has not analysed the relevant terms and con....
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.... method of accounting regularly followed by assessee upheld the order of the AO making the addition of Rs. 40,32,955/-. Hon'ble ITAT therefore restored the matter back to the file of Ld. CIT(A) with specific direction to decide the issue after analyzing the relevant terms and conditions of the contracts in relation to the retention money as to whether or not any amount retained by the respective customers actually accrued to the assessee in the year under consideration and whether this action of the assessee is in conformity with the method of accounting regularly followed by him. In compliance of this, Ld. CIT(A) after analyzing the terms of payments of purchase orders in respect of various parties has given a categorical finding that the ....
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.... appeal is dismissed 7. Ground No. 2 relates to addition of Rs. 27,36,668/- u/s. 14A on account of interest and Rs. 1,00,000/- for administrative expenses. The observations of the AO while making this disallowance have been summarized by Ld. CIT(A) as under:- "4.1 The appellant has not furnished details of exact source of investments in shares/mutual funds during the year under consideration. There is no mention as to whether or not the appellant has maintained separate accounts of interest bearing fund and non interest bearing fund utilized for investment. Further the appellant has not submitted the day today fund flow statement to substantiate their claim. In absence of any specific details of source of investment in shares / ....
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....hat the ITAT had no occasion to consider these decisions in the preceding year and therefore, matter may be restored to the file of the ld. CIT(A) for re-adjudicating the issue in the fight of these decisions. The learned DR on the other hand supported the orders of the authorities below. We have heard both the parties and gone though the facts of the case. We find that neither before the A.O nor before the ld. CJT(A), the appellant furnished details and evidence that funds borrowed by it were utilized for the purpose of their business alone and not by way of investments in equity shares/mutual funds. Resultantly, the A.O made an estimated disallowance of interest on borrowed funds and out of administrative expenses, following his ....
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....various judicial pronouncements. Including those referred to above, after allowing sufficient opportunity to both the parties. Needless to say that while re-deciding the issue, the learned CIT(A) shall pass a speaking order, keeping in mind, inter alia, the mandate of provisions of sec, 250(6) of the Act, bringing out clearly as to whether or not borrowed funds had indeed been utilized in investment in shares/mutual funds for earning exempt income. With these observations ground Nos. 2 & 3 in the appeal are disposed off." In compliance of above directions, Ld CIT(A) after going through the submissions of the assessee which have been reproduced by him in his order gave relief to the assessee. 9. Before us Ld. DR vehemently suppor....