TaxTMI 
TaxTMI 
2020 (11) TMI 692
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....ssee is engaged in the business of real estate. We find that assessee during the year had paid a sum of Rs. 1,32,79,515/- as interest @10% in respect of advances received from buyers of property. We find that the ld. AO had observed that assessee had given interest free advances to the tune of Rs. 163,93,07,264/- on one hand, but on the other hand had paid interest on advances received from buyers of the property. Hence, he presumed that the interest free advances given to the sister concerns and to the outsiders were made out of interest bearing funds of the assessee. Accordingly, the ld. AO proceeded to disallow the entire interest payment in the sum of Rs. 1,32,79,515/- in the assessment. We find that the ld. CIT(A) had deleted the same by appreciating the fact that assessee had sufficient interest free funds of Rs. 176,82,74,751/-. As against this, the interest bearing liabilities were only to the tune of Rs. 13,27,95,150/-. Hence, it could be safely presumed that assessee had sufficient own funds to make interest free advances to its sister concerns and to its outsiders. By placing reliance on the decision of the Hon'ble Bombay High Court in the case of Reliance Utilitie....
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....t the ld. AO to restrict the disallowance to Rs. 9 lakhs at 20% of total salary paid to the Director. Accordingly, the ground No.2 raised by the revenue is dismissed. 4. The next issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in restricting the disallowance of 50% of total advertising and publicity expenses in the facts and circumstances of the case. 4.1. We have heard the rival submissions and perused the materials available on record. We find that a sum of Rs. 17,92,000/- was paid by the assessee company to M/s. GMR Sports Pvt. Ltd. towards cost of 32 corporate box booking tickets for each of the 7 IPL cricket matches held at Feroz Shah Kotla Cricket Stadium, New Delhi. It is not in dispute that M/s. GMR Sports Pvt. Ltd possessed the sponsorship of IPL team of Delhi Dare Devils. Hence, for providing advertisement during the IPL matches in Delhi, GMR Sports Pvt. Ltd. provided corporate box on purchase of specified number of tickets and accordingly, assessee had paid Rs. 17,92,000/- for purchase of 32 tickets in corporate box for each of the 7 matches of IPL. We find that the assessee had pleaded that this expenditure was incurred towards adv....
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....ing their offices at the same premises. The assessee submitted that it had occupied only basement and ground floor whereas the first, second and third floor were occupied by the remaining 16 companies. This explanation was not found satisfactory to the ld. AO on the ground that assessee being a single company was occupying basement and ground floor, whereas the remaining 16 companies were occupying three floors. Accordingly, the ld. AO proceeded to disallow 60% of the total rent paid amounting to Rs. 24,26,976/- (60% of 40,44,960/-) as expenditure not relatable to the business of the assessee. We find that the ld. CIT(A) had observed that the ld. AO had not given any concrete finding to arrive at the conclusion that 60% of the rent is to be disallowed in view of the fact that total 17 concerns are operating in the same premises including the assessee and out of that 16 concerns were using only three floors and single company i.e. the assessee was using basement and ground floor. The ld. CIT(A) also observed that the ld. AO should have analysed the requirement of each company and payment made by each company in this regard in view of the fact that out of 16 companies, only thr....
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....find that assessee had not preferred any appeal against this order of the ld. CIT(A) before us. We have already held that since the same premises has been occupied by various concerns of the assessee, the entire expenses has to be apportioned in a just and fair manner based on the usage and the ld. CIT(A) had restricted the disallowance to 10% thereon. As stated supra, since no appeal has been preferred by the assessee before us against the order of ld. CIT(A), we do not deem it fit to interfere with the finding of the ld. CIT(A) especially when assessee was not categorically able to prove even before us that the subject mentioned expenditure were incurred only for the business purpose of the assessee. Hence, the disallowance restricted to 10% on adhoc basis by the ld. CIT(A) does not require any interference. Accordingly, the ground No.5 raised by the revenue is dismissed. 7. The ground No.6 raised by the revenue is with regard to the action of the ld. CIT(A) in deleting the addition of Rs. 4,14,39,084/- made on account of disallowance with respect to cost of goods sold. 7.1. We have heard rival submissions and perused the materials available on record. We find that assessee....
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....ny assessment u/s 143(3) of the Income Tax Act for the A Y 2008-09 has already been completed in the case of Assessee Company. As the scrutiny assessment has already been completed and as such details in respect of opening stock have already been verified by the department and are a/so available with the assessing officer. b) Purchase and project expenses From the perusal of the Para of the assessment order it may be observed that the cost of goods sold have been estimated in respect of project at Medicity. The cost incurred on project at medicity comprises or purchase or area and project expenses. The details in respect of purchase of area being the copy of the collaboration agreement along with the copy of account in respect of amount paid for .purchase, of area has already been filed during the course of assessment proceeding vide submission dated 23/12/2011 (the copy of submission dated 23/12/11 is enclosed and forms part of paper book at page no 01 to 06. Further documentary evidence in respect of construction and other direct, expenses incurred in respect of project has also been filed during the course of assessment proceeding. c) Closing stock ....