2018 (5) TMI 2107 - AT - Income Tax

Disallowance interest on interest fee advance - HELD THAT - As decided in own case 2016 (7) TMI 1631 - ITAT DELHI issue decided the issue in favour of the assessee. Disallowance u/s 14A read with Rule 8D - AO observed that the assessee has received tax free dividend income on long term trade investment and claimed the same as exemption u/s 10 (34) - Suo moto disallowance made by assessee - CIT (A) restricted the disallowance as disallowed by the assessee itself - HELD THAT - Since in the instant case also the assessee itself has disallowed an amount of 2.50 as against actual dividend of 1, 70, 096/- therefore following the decision of the Tribunal in assessee s own case in the immediately preceding assessment year which are in consonance with the decisions of Hon ble Delhi High Court MAXOPP INVESTMENT LTD. CHEMINVEST OTHERS 2011 (11) TMI 267 - DELHI HIGH COURT find no infirmity in the order of the CIT(A). Accordingly the same is upheld and the ground raised by the revenue is dismissed.

Summary

Issues:
1. Disallowance of alternate claim for obtaining approval expenses.
2. Initiation of penalty proceedings under section 271(1)(c).
3. Disallowance of interest on interest-free advance.
4. Disallowance under section 14A read with Rule 8D.

Issue 1: Disallowance of Alternate Claim for Obtaining Approval Expenses
The appellant's claim for actual payment basis in relation to real estate project expenses was dismissed by the Tribunal based on a previous decision. The ground raised by the appellant was consequently dismissed.

Issue 2: Initiation of Penalty Proceedings under Section 271(1)(c)
The Tribunal dismissed the ground related to the initiation of penalty proceedings as premature at that stage.

Issue 3: Disallowance of Interest on Interest-Free Advance
The revenue appealed against the deletion of disallowance of interest on interest-free advances given to DCM employees welfare trust. The Tribunal upheld the CIT(A)'s decision based on previous tribunal rulings in the assessee's favor for similar issues, dismissing the revenue's appeal.

Issue 4: Disallowance under Section 14A read with Rule 8D
Regarding disallowance under section 14A read with Rule 8D, the Assessing Officer disallowed a certain amount, which the CIT(A) reduced based on the assessee's self-disallowance. The Tribunal upheld the CIT(A)'s decision, citing previous tribunal rulings and decisions of the Delhi High Court, dismissing the revenue's appeal.

In conclusion, the Tribunal dismissed all the appeals filed by both the assessee and the revenue, upholding the decisions made by the CIT(A) in various issues related to disallowances and penalty proceedings. The Tribunal's decision was pronounced on 22.05.2018.