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2016 (2) TMI 753 - ITAT KOLKATADeemed dividend u/s 2(22)(e) - Held that:- Advance has been given by one Group Company to another so that that company is able to carry out and pursue its business activities with another party. This has not been doubted by the AO. It therefore, implies that this was a genuine business advance and not a ploy to pass on the profits as an advance and not as dividend in order to save payment of tax on dividend distribution. Base on above discussion, it is to be held that advance given by M/s. ABP Pvt. Ltd to the appellant cannot be categorized as deemed dividend u/s. 2(22)(e) of the I.T Act, 1961 - Decided in favour of assessee. Nature of expenditure - revenue v/s capital - Held that:- The expenditure incurred by the assessee towards brokerage, stamp duty and registration charges for acquiring the office space of 5650 sq.ft at Gariahat Mall on lease for the purpose of assessee’s business was squarely allowable as revenue expenditure and cannot be added at any stretch of imagination as capital expenditure.- Decided in favour of assessee. Filing fees paid to Registrar of Companies [ ROC] towards increasing of authorized capital is not allowable as revenue expenditure. See Punjab State Industrial Development Corporation Vs. CIT reported in (1996 (12) TMI 6 - SUPREME Court) - Decided against assessee Legal & professional charges - Held that:- We also find that the ld. AO had merely disallowed the said legal & professional expenses by treating the same as capital in nature without adducing any reason for the same. We hold that these expenses are required for obtaining clearances/licenses in connection with business activity of the assessee. Accordingly, it is squarely eligible for deduction. - Decided in favour of assessee Disallowance u/s 14A - Held that:- We find that the assessee had incurred only long term capital loss after indexation and in order to invoke the provisions of section 14A of the Act, the existence of exempt income is sine qua non . The ld. AO has not disputed the long term capital loss claimed by the assessee and had allowed the same. Hence, in this scenario invoking the provisions of rule 8D(2)(iii) of IT Rules 1962 directly without recording the satisfaction in terms of rule 8D(1) is not warranted in accordance with law. - Decided in favour of assessee
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