TaxTMI 
TaxTMI 
2022 (11) TMI 1487
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....fficer [AO] u/s. 143(3) of the Act. However, the facts as well as issues are substantially the same in both the years. At the time of hearing, none appeared for the assessee. Accordingly, the appeals were heard with the able assistance of Ld. Sr. DR who pleaded for dismissal of the appeals. The assessee being resident corporate assessee is stated to be engaged in hotel and restaurant business. 2. Upon perusal of grounds of appeal for AY 2008-09, we find that two issues fall for our consideration i.e., i) Disallowance of Rs. 19.71 Lacs; ii) Disallowance of Rs.5.11 Lacs. After considering material on record, the same are adjudicated as under. 3. Disallowance of Rs. 19.71 Lacs: 3.1 An amount of Rs.19.71 Lacs was due to assessee from i....
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....rnative argument that the subsidiary was promoted to promote the brand CGH Earth and to bring more tourism and business to the assessee by opening a restaurant and a marketing wing for the hotel chain in Germany. The formation of subsidiary entity was in the normal course of business with a view to improve the profitability. The loss arising therefrom should be viewed as a loss of revenue in nature and not a capital loss since the investments were in furtherance of business interest of the assessee. The main purpose of the investment was not to acquire any manufacturing capacity but to carry on a new business. It was solely to boost the assessee's existing business and to make business more profitable. As such, the investments were in norma....
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.... the investment thus lost was claimed as an expenditure. The Ld. AO disallowed the same on the ground that it was capital item. The Ld. CIT(A) confirmed the same but directed Ld. AO to treat the loss as long-term capital loss which would be allowed to be carried forward. 4.2 We find that Ld. CIT(A) has clinched the issue in correct perspective. The loss of equity investment could not be allowed as revenue expenditure. The same is in capital field for which adequate directions have been issued by Ld. CIT(A). The same do not require any interference on our part. This issue stand dismissed. The appeal stands partly allowed in terms of our above order. 5. Assessment Year 2009-10 In this year, the additional issues that arises for our a....
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....rder u/s 143(3) was in further appeal. Rejecting the same, Ld. AO treated the aggregate interest of Rs.21.17 Lacs as income of the assessee. 7.2 The Ld. CIT(A) held that the amount would be taxable on cash basis i.e., whenever the same is received by the assessee. As per the decision of Hon'ble Kerala High Court in Smt. K. Devayani Amma vs. DCIT (328 ITR 10), interest u/s 244A would be assessable in the year in which the refund was granted. The Ld. CIT(A) noted that the figure of Rs.21.17 Lacs was erroneous computation since component amount of Rs.8.62 Lacs was a reduction from earlier amount of Rs.12.54 Lacs. The Ld. CIT(A) directed Ld. AO to examine whether the interest of Rs.12.54 Lacs was assessed to tax in AY 2008-09. If so, then no....