TaxTMI 
TaxTMI 
2022 (7) TMI 62
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....s promoter and developer. It maintained two sets of books of accounts, one, for such projects on which the benefit of deduction under section 80IB(10) of the Income-tax Act, 1961 (hereinafter also called `the Act') is available [80B(10) projects] and the others for such projects on which no benefit of deduction under section 80IB(10) is available [non-80IB(10) projects]. It also made separate Profit and loss accounts and Balance sheets in respect thereof. During the year under consideration, the assessee showed to have paid VAT of Rs.1,13,42,282/- relating to the period 2006 to 2010. Deduction of such an amount was claimed in the Profit and loss account of non-80IB(10) projects. On a specific query, the assessee admitted that the VAT of ear....
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.....12 crore on which deduction u/s 80IB(10) of Rs.2.06 crore was claimed. He opined that the amount of VAT could not be allowed as deduction during the year either in the Profit and loss account of 80B(10) projects or non- 80IB(10) projects because the liability pertained to earlier years. The ld. CIT(A) also countenanced the view of the AO on section 14A disallowance. 4. I have heard the rival submissions and gone through the relevant material on record. It is seen as an admitted position that the assessee separately maintained books of account for 80IB(10) projects and non-80IB(10) projects. Corresponding Profit and loss accounts were also drawn accordingly. There is no dispute that the amount of VAT was paid by the assessee during the yea....
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....progress thereof as there was no revenue under this stream for the year. Thus, the closing figure of work-in-progress in the 80IB(10) projects would increase by the sum on Rs.1.13 crore. However, income for the year under consideration from non-80IB(10) projects, which is otherwise chargeable to tax and not eligible for the deduction, would increase accordingly as the amount of VAT paid and claimed as deduction therein shall get disallowed on moving to the Profit and loss account of 80IB(10) projects. 6. The alternative view point of the AO for making disallowance u/s.14A cannot be countenanced because deduction is admissible under 80IB(10) projects and the assessee admittedly did not have any income from such projects. Once there is no ex....
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.... certain loans and advances without interest to partners and outsiders. On perusal of such details, the AO observed that the assessee paid advance of Rs.45.00 crore to Mr. S.K. Kotkar, a partner of the assessee firm, for purchase of TDR. The assessee admitted that Mr. S.K. Kotkar was not in possession of TDR at the time when advance was given and further that there was no MOU with Mr. S.K. Kotkar for purchase of TDR. In fact, Mr. S.K. Kotkar received Rs.45.00 crore as advance and re-invested the same into the assessee firm as his capital on the same date. The AO did not accept the theory of `business purpose' for the advance given to the partner and computed the disallowance of interest at Rs.61,01,315/- towards negative balance in capital ....
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....an A/c. of the partners. If there is debit balance in the accounts of any partner interest at the same rate shall be payable by him. The partners may change the above rate of interest from time to time as required by the exigencies of business." 11. On going through the above clause of the partnership deed, it is clear that the partners are entitled to simple interest at the rate of 12% per annum on the amount standing to the credit of their capital account etc. If there is debit balance in the account of any partner, interest at the same rate shall be charged by the firm. A copy of capital account of Mr. S.K. Kotkar has been placed at pages 10 to 12 of the paper book along with the respective credit/debit balances on each date with the ....