9911796707
TMI Blog2015 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the partnership firm M/s Little & Co., Mumbai, which was not made in the year under consideration but had been continuing since 19-5- 2006. Admittedly, the investment made by assessee in M/s Little & Co., Mumbai was on account of professional considerations inasmuch as the assessee had acquired 45% share in profit & loss account of the firm M/s Little & Co., Mumbai. Therefore, the amount outstanding against the said firm could not be treated as interest free loan calling for any disallowance of interest on proportionate basis. It was pure and simple professional arrangement between two firms and, therefore, the amount outstanding against M/s. Little & Co. was only on account of commercial expediency particularly when a dispute had cropped up between the two firms, which got finally settled by Hon’ble Supreme Court with the award of a sum of ₹ 8.5 crores in installments as noted earlier. The decision of Hon’ble Supreme Court in the case of SA Builders [2006 (12) TMI 82 - SUPREME COURT] is squarely applicable to the present set of facts, We, therefore, do not find any reason to interfere with the order of ld. CIT(A). - Decided in favour of assessee. Disallowance under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of total interest expenses since the assessee could not furnish necessary documentary evidence the course of assessment proceedings w.r.t. loans and advances inspite of numerous opportunities given to him by the AO. 4. In the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition made by the AO on account of London rates and taxes to ₹ 1,50,312/- since the assessee could not furnish necessary documentary evidence the course of assessment proceedings inspite of numerous opportunities given to him by the AO. 5. In the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition made by the AO on the basis of additional evidences furnished by the assessee and by not calling for any remand report from the AO in utter disregard to the principles laid down by the Hon ble Delhi High Court in the case of CIT Vs. M/s Manish Buildwell Pvt. Ltd. (2011-TIOL- 756-HC-DEL-IT) Appeal no. 928/2011. 6. That the grounds of appeal are without prejudice to each other. 7. The appellant can craves leave to add, amend or modify any/ all the grounds of appeal before or during the course of the appeal. 4. Brief facts apropos ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lower authorities that bringing to tax the impugned amount in this' year would amount to double taxation of the same income in different years. We also find that various cases cited by the learned OR are distinguishable on facts. In the case of Taparia Tools Ltd. (supra), the question was about the deduction of deferred revenue expenditure, debited in the books in one year. The court held that since the benefit. of the debentures was available for a period of five years, the up front interest was to be allowed in five years and not in 'one year, The case does not deal with the determination whether any particular receipt was an advance or income. In the case of T.V. Sundaram Iyengar Sons Ltd. (supra), the assessee had credited unclaimed advances to profit loss account, which had otherwise become time barred by efflux of time. The court held that the amount was income on commonsense . view as the profits of the assessee as well as its assets increased by the corresponding amount. In the instant case, the amounts have not become time barred by limitation and over and above that the amount has not been written back to profit. and loss account. In the case of Morvi Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As on 31-03-2009 As on 31-03-2008 Loan 10,62,04,547 8,36,99,113 Interest 2,10,35,698 1,34,29,295 11. From the above chart, the AO pointed out that assessee had invested heavily in the Little Co. which was a related party. Considering various case laws, the AO computed the disallowable interest @ 12% on advance of ₹ 9,05,63,232/-, which aggregated to ₹ 1,08,67,588/-. 12. Before ld. CIT(A) the assessee reiterated that the assessee had not made advance as loan to M/s Little Co., but the same was in the form of advance to enter into partnership with a share of 45% in profit and loss of the firm M/s Little Co., which was duly assessed to income tax at PAN AAAFL 1699. It was further pointed out that since the inception of this partnership firm, the assessee had not received any profit or loss, which resulted into dispute amongst the partners, which dispute had gone before the Hon ble Supreme court and settled on certain terms and conditions. The assessee further, inter alia, submitted as under: Subsequently Hon ble Supreme Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese documents were filed only to demonstrate that the compensation received as per the order of Hon ble Supreme Court was included in assessee s income in AY 2012-13 and 2013-14 as per the date of receipt of compensation. This petition only further support s assessee s contention regarding investment in M/s Little Co. 17. Admittedly, the investment made by assessee in M/s Little Co., Mumbai was on account of professional considerations inasmuch as the assessee had acquired 45% share in profit loss account of the firm M/s Little Co., Mumbai. Therefore, the amount outstanding against the said firm could not be treated as interest free loan calling for any disallowance of interest on proportionate basis. It was pure and simple professional arrangement between two firms and, therefore, the amount outstanding against M/s. Little Co. was only on account of commercial expediency particularly when a dispute had cropped up between the two firms, which got finally settled by Hon ble Supreme Court with the award of a sum of ₹ 8.5 crores in installments as noted earlier. The decision of Hon ble Supreme Court in the case of SA Builders is squarely applicable to the present s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
