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TMI Blog2013 (3) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... t appears to us that it was a business arrangement between the assessee and MMCPL pursuant to which the sum of Rs.15 lakhs was paid by the Assessee to MMCPL and the said payment cannot be termed as rent. This further strengthened by the accounting treatment given by the assessee. The decision in the case of Kamat Hotels India Ltd. (2000 (3) TMI 1039 - ITAT MUMBAI) also supports the plea of the assessee. - ITA No. 3556/MUM/2010 - - - Dated:- 27-1-2012 - SHRI N.V.VASUDEVAN SHRI R.K.PANDA, JJ. Appellant by : Shri Anil R. Shah Respondent by : Shri V.V. Shastri ORDER PER N.V.VASUDEVAN, J.M: This is an appeal by the assessee against the order dated 2/3/2010 of CIT(A)-6, Mumbai relating to the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manufacturing Company Ltd., 328 ITR 81(Bom) has held that Rule 8D was applicable only from A.Y 2008-09 and any disallowance under section 14A of the Act prior to the said assessment year has to be made on a reasonable basis and not on the basis of Rule 8D of the Income Tax Rules. We, therefore, set aside the order of the CIT(A) on this issue and restore the issue to the AO for fresh consideration in the light of directions given by the Hon ble Bombay High Court in the case of Godrej Boyce Manufacturing Company Ltd.(supra). 4. Ground No.2 was not pressed and the same is dismissed as not pressed. 5. Ground No.3 reads as follows: 3. The learned CIT(A) has also erred in holding Sec.40(a)(ia) applies and confirming disallowance of Rs.15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 7. Before CIT(A) the assessee pointed out that the amount in question is paid pursuant to profit sharing arrangement and the payment in question was not in the nature of rent as envisaged under section 194-I of the Act. The assessee further pointed out that in its books a sum of Rs. 15 lacs is not debited as payment of rent. Even MMCPL showed the receipt of Rs. 15 lacs from the assessee as heritage hotel income and the same is reflected in income tax return as income from business and not income from house property. The CIT(A) however was of the view that the arrangement between the assessee and MMCPL for payment of percentage of the gross receipt of hotel business is only methodology adopted for fixation of rent for usage of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the previous year. Where the amounts are paid on or before the last date of the previous year those provisions would not apply. According to the assessee the payment of Rs. 15 lacs was not outstanding and had been paid to MMCPL before the last date of the previous year. 10. The ld. D.R relied on the order of the CIT(A). 11. We have considered the rival submissions. The arrangement between the assessee and MMCPL is in the form of Board Resolution passed by the assessee. The same reads as follows: The Chairman informed the Board that the company has developed the property of Mangaldas Mehta Co. Pvt. Ltd. and is now using the same for the hotel purpose. Since the company has started earning from that property it is proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs.9,37,490 after disallowance made u/s.40(a)(ia) has been rightly made by the Assessing Officer.. It is submitted by your Appellant that Sec. 11 5JB does not apply on facts of the case and that working of tax total there under at Rs.78,890 is not correct and the same be deleted. 13. The grievance of the assessee in this regard is that the disallowance under section 14A of the Act cannot be added to the profits of the business as per the P L Account prepared in accordance with the provisions of the Companies Act 1956 as the same is not envisaged as an item to be so added by Explanation-1(a) to (i) to Section 115JB of the Act. On this issue the CIT(A) held as follows: 7.3 I have considered the facts of the issue as well as written l5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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