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2019 (8) TMI 1835 - ITAT PUNEAddition on account of bank interest on deposits belonging to the society - HELD THAT:- Contention of the assessee that the “interest income” accrued on the deposits of the society is not taxable in the hands of the assessee, stands rejected by the Tribunal over the years. Considering the above written submission on this issue on hand and the order of the Tribunal in assessee’s own case for the assessment year 2010-11 [2017 (12) TMI 1398 - ITAT PUNE] on the identical issue, we are of the opinion, the issue raised by the assessee in ground no.1 should be dismissed. Accordingly, the ground no.1 raised by the assessee is dismissed. Disallowance of business expenditure shown as ‘Exceptional Items’ - HELD THAT:- As it is evident that the expenditure in connection with an abandoned project is an allowable expenditure. It is not the case of the Revenue, that assessee spent on capital assets like the land, building etc. The capital nature of the expenditure in question i.e. IPO expenses is not relevant when it comes to a case of abandoned project like the present one. Therefore, we are of the opinion, the ground no.2 raised by the assessee should be allowed. Deemed dividend addition u/s 2(22)(e) - Correctness of invoking the provisions of section 2(22)(e) - HELD THAT:- As the entire accumulated reserves of (i) M/s Riverview Properties Pvt. Ltd. and (ii) M/s Khiranagar Development Pvt. Ltd. are nothing but the share premium. The same is outside the scope of the “accumulated reserves” within the meaning of section 2(22)(e) of the Act. Thus, in the absence of eligible reserves and surplus with the payer companies, the provisions of section 2(22)(e) of the Act are not correctly invoked by the Assessing Officer in this case. From this point of law, Assessing Officer/CIT(A) are not correct in making the addition u/s 2(22)(e) of the Act. Accordingly, the relevant ground no.3 and additional ground no.1 & 1.1 are allowed in favour of the assessee. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Disallowance made by the assessee in connection with the clause (ii) of Rule 8D(2) of the Rules. Regarding the Rule 8D(2)(iii), we find same again stands in favour of the assessee by virtue of the order of the Tribunal in assessee’s own case for the assessment years 2009-10 to 2010-11. Accordingly, the relevant ground no.4 and additional ground no.2 – 2.3 are raised by the assessee are allowed. Disallowance u/s 36(1)(iii) - HELD THAT:- Existence of excessive interest free funds and perusing the order of the Tribunal in assessee’s own case for the assessment year 2010-11 [2017 (12) TMI 1398 - ITAT PUNE] we are of the opinion, the issue raised by the assessee in ground no.5 should be allowed in favour of the assessee.
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