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TMI Blog2013 (11) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ach case, it is transferred to share capital account. The share capital is accordingly increased and this practice has been followed by the appellant for the last so many years. It is not the case of the department that the liability is ceased, rather the money -paid is to be converted into share capital and it cannot be said that it has become income of the appellant – Addition deleted – Decided against the Revenue. Addition on account of retention money – Held that:- The retention money is basically the money retained to be set off against the penalty imposed, if the requisite supply is not made by the cane grower. If any penalty is levied on the cane grower, the same is squared up by way of transferring money from retention money account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this account is subsequently transferred to Share Capital account as explained earlier." The Assessing Officer did not find force in the submissions and observed since the payment has not been made, therefore, this expenditure was not allowable and accordingly added this amount to the income of the assessee. 4 On appeal before the ld. CIT(A) similar submissions as made before the Assessing Officer were reiterated. The ld. CIT(A) found force in the same and allowed the appeal. 5 Before us, the ld. DR for the revenue relied on the order of the Assessing Officer. 6 On the other hand, the ld. counsel of the assessee supported the impugned order. 7 After considering the rival submissions we find that this issue has been adjudicated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount retained at the end after making the final payment has been shown as income under the head penalty received in the profit and loss account." The Assessing Officer did not find force in the submissions and disallowed this amount. 9 On appeal before the ld. CIT(A) similar submissions were reiterated. The ld. CIT(A) found force in the same and allowed the appeal. 10 Before us, the ld. DR for the revenue relied on the order of Assessing Officer. 11 On the other hand, the ld. counsel of the assessee supported the impugned order. 12 After considering the rival submissions we find that this issue has been adjudicated by the ld. CIT(A) vide para 4.3 which is as under: "I have considered the submissions of the ld. counsel of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 - This issue has been adjudicated by us vide para 3 of this order. Since the facts are identical and therefore, following our decision in para 7, we decide this issue against the revenue. 17 Ground No. 2 - Ground No. 2 - After hearing both the parties we find that during assessment proceedings it was further noticed that the assessee has retained a sum of Rs. 22,91,833/-. On enquiry it was explained as under:- "The retention money is a part of cane price payable which is released at the time of end of the crushing operation. The amount retained t the end after making the final payment has been shown as income under the head penalty received in the profit and loss account." The Assessing Officer did not find force in the submissions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ld. CIT(A) and confirm the same. 23 In the result, appeal of the revenue is dismissed. ITA No. 657/Chd/2012-Assessee's appeal 24 In this appeal the assessee has raised the following ground: "That the ld. CIT(A) Chandigarh is not justified in upholding the order of the Assessing Officer regarding the addition of Rs. 7,93,127/- made by applying provisions of section 14A of IT Act. This addition is uncalled for as the provisions of section 14A of the IT Act are not applicable to the present case." 25 After hearing both the parties we find that during assessment proceedings the AO noticed that the assessee had made investment in shares and earned dividend income. Accordingly Section 14A of IT Act r.w. rule 8D of IT Rules was invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, we set aside the order of the ld. CIT(A) and direct the Assessing Officer to make disallowance of Rs. 25,000/- 30 in the result, assessee's appeal is partly allowed. ITA No. 1220/Chd/2012 - assessee's appeal 31 In this appeal the assessee has raised the following ground: "That the ld. CIT(A) is not justified in upholding the order of the Assessing Officer regarding the addition of Rs. 3,49,459/- made by applying provisions of section 14A of the IT Act. This addition is uncalled or as the provisions of section 14A of the IT Act are not applicable to the present case." 32 After hearing both the parties we find that during assessment proceedings the AO noticed that the assessee had made investment in shares and received a dividend inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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