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TMI Blog2015 (9) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in confirming the addition made by the A.O. invoking the provisions of S. 36(1)(iii) r.w.s. 40A(2)(b) of the Act, saying that the assesseecompany itself offered the same for taxation. The 'offering to tax' was under certain misconception of law. The addition is not sustainable and the same be deleted. 3) On the facts and circumstances of the case and in law the amount was offered to tax in earlier years was without appreciating the statutory presumption that the advances/loans covered by S. 40A(2)(b) were given out of own funds which are interest free. The income declared in the return itself exceeds the amount of loans paid to persons covered by S. 40A(2)(b). In view of the statutory presumption advances/loans were presumed to have been given out of the current income of the year on which tax is already paid which goes to build up the interest free funds. The addition of Rs. 33,37,059/is unwarranted and it be deleted." 3. The Ld. Counsel for the assessee at the outset submitted that the above grounds are decided against the assessee by the decision of the Tribunal in assessee's own case for A.Yrs. 2009-10 & 2010-11. 4. After hearing both the sides, we find the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the assessee challenging the disallowance of addition of Rs. 33,37,079/. 6.2 So far as the decisions relied on by the Ld. Counsel for the assessee are concerned, none of the case relates to a situation where the assessee having offered for taxation of the excess amount of interest has got relief. No doubt, the banks ask lot of formalities for sanctioning of loan which are not required for loans obtained from private parties. However, in the instant case, the assessee has also obtained loan from private parties and has paid interest @9%. The assessee itself has calculated the interest to be paid to the Directors and related parties @15.60% and offered the balance amount for taxation. Therefore, under the facts and circumstances of the case, the various case decisions relied on by the Ld. Counsel for the assessee are not applicable. 6.3 We further find that the assessee in the grounds has mentioned that it has sufficient interest free funds available which are far in excess of the loans advanced to persons covered u/s.40A(2)(b). In the instant case, there is no question of disallowance of interest on account of interest free advances given to related parties. It is a reverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal in Assessee's own case for A.Y. 2010-11. 10. After hearing both the sides, we find the Tribunal in Assessee's own case vide ITA No.1948/PN/2013 for A.Y. 2010-11 while deciding the issue against the assessee has observed as under : "9. We have considered the rival arguments made by both the sides. We find an identical issue had come up before the Tribunal in assessee's own case for the A.Y. 200910. The Tribunal vide ITA No.849/PN/2013 order dated 11082014 has dismissed the grounds raised by the assessee by observing as under : "10. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. From the copy of the assessment order, we find on being questioned by the Assessing Officer to explain as to why proportionate disallowance should not be made for claiming the dividend income as exempt u/s.10(34), the assessee in its reply vide submission dated 17082011 has replied as under : "The company has earned a dividend of Rs. 1,60,976/from Indian Companies which is claimed as exempt u/s 10(34) of the I. T. Act. However, the expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the CIT(A) upholding the disallowance made u/s.14A r.w. Rule 8D for the impugned assessment year. The case decision relied on by the Ld. Counsel for the assessee is of no help to it in absence of giving full details and to explain as to how the said ratio is applicable to the facts of the present case. This ground by the assessee is accordingly dismissed." 10. In view of the order of the Tribunal in assessees own case upholding the order of the CIT(A) on this issue in the preceding assessment year and in absence of any contrary material brought to our notice against the order of the Tribunal, we find no infirmity in the order of the CIT(A). Accordingly, the same is upheld and the ground raised by the assessee is dismissed." 11. Following the order of the Tribunal in assessee's own case and in absence of any contrary material brought to our notice the order of the CIT(A) on this issue is upheld and the ground raised by the assessee is dismissed 12. Ground of appeal No.5 by the assessee reads as under : "5) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in disallowing an amount of Rs. 2,53,759/out of foundation day expenses of Rs. 12, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made vouchers only for which these are not fully verifiable as to the business nexus of the assessee. No telephone call register was maintained to ensure that the entire expenses under this head were incurred for the purpose of business. The AO accordingly disallowed on adhoc basis of such expenses and thus made addition of Rs. 1,32,400/-. In appeal the Ld. CIT(A) upheld the action of the AO for which the assessee is in appeal before us. 18. After hearing both the sides, we find the Tribunal in assessee's own case in the immediately preceding assessment year following the order for A.Y. 2009-10 restricted such disallowance to 5%. The relevant order of the Tribunal at para Nos. 14 and 15 read as under : "14. After hearing both the sides, we find an identical issue had come up before the Tribunal in assessee's own case in the immediately preceding assessment year. The Tribunal vide ITA No.849/PN/2013 order dated 11082014 has restricted such disallowance to 5% by observing as under : "12. We have considered the rival arguments made by both the sides. There is no dispute to the fact that certain bills and vouchers were supported by only selfmade vouchers and were not amenable for ve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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