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TMI Blog2017 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... : Md. Ghayas Uddin, JCIT ORDER Per Shri M. Balaganesh, AM This appeal by assessee is arising out of order of CIT(A)-7, Kolkata vide Appeal No. 445/CIT(A)-7/Cir-26/14-15 dated 02.12.2015. Assessment was framed by ACIT, Circle-53, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Year 2010-11 vide his order dated 30.03.2013. 2. The Ground Nos. 1, 2 4 raised by the assessee are general in nature and does not require any adjudication. 3. The Ground 3(f) raised by the assessee was stated to be not pressed by the ld AR at the time of hearing for which necessary endorsement was also made by him to that effect. Accordingly, the Ground 3 (f) raised by the assessee is dismissed as not pressed. 4. The first issue to be decided in this appeal is as to whether the ld CITA is justified in upholding the disallowance made u/s 40(a)(ia) of the Act in the sum of ₹ 82,650/- towards Annual Maintenance Charges in the facts and circumstances of the case. 4.1. The brief facts of this issue is that the assessee is running a restaurant in Mani Square Mall. The ld AO observed that the assessee paid a sum of ₹ 61,650/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Square mall management would do an account of the sales and the cash collections. They deduct their share of the revenue and pay the remaining sale proceeds to the assessee. This reply not satisfied with this reply disallowed the total payment of ₹ 9,77,358/- u/s 40(a)(ia) of the Act, which was also confirmed by the ld CITA in first appeal. Aggrieved, the assessee is in appeal before us. 5.2. The ld AR argued that as per the Joint Venture agreement entered into with Mani Square Food Court at Mani Square Mall dated 15.7.2008, vide clause 10(i) and 10(ii) of the agreement, the assessee has to pay Mani Square Ltd a percentage of the gross sale proceeds and the basis of the amount to be paid is also stipulated thereon at fixed percentage based on the turnover achieved thereon. He drew the attention of the bench to Clause 10(i) , Clause 11.1 (revenue sharing between assessee and Mani Square at 75:25 ratio respectively) , Clause 12 towards payment of fixed common area maintenance charges of ₹ 23,295/- plus service tax on account of servicing, managing and maintaining the common area installation and facilities in the mall including electricity, repairs, replacement, refur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding recorded by the authorities below with regard to the nature of each and every payment made by the assessee to MSL in accordance with various clauses of the Joint Venture Agreement dated 15.7.2008 which is the basis on which various payments were made. There is no finding as to whether the said agreement is a mere revenue sharing arrangement or it is merely an agreement allowing the assessee to carry on the food vending business on hire together with some common facilities. We find that such a clear finding would determine the issue of applicability of tax deduction provisions as per Chapter XVIIB of the Act. In these facts and circumstances, we deem it fit and appropriate, in the interest of justice and fairplay, to set aside this issue to the file of the ld AO to decide the same afresh, in accordance with law by critically examining each and every payment made by the assessee to MSL in accordance with various clauses of the agreement dated 15.7.2008. Needless to mention that the assessee be given reasonable opportunity of being heard. Accordingly, the Ground 3(b) raised by the assessee is allowed for statistical purposes. 6. The next issue to be decided in this appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance made on account of salary in the sum of ₹ 20,67,124/- in the facts and circumstances of the case. 8.1. The brief facts of this issue is that there was a survey conducted in the business premises of the assessee on 23.3.2010, wherein a profit and loss account till that date was found as per which the net profit was reflected at ₹ 71,37,016/-. The ld AO observed that the net profit disclosed by the assessee in the return of income was ₹ 3,78,009/-. The assessee explained that lot of actual expenses incurred were not entered in the accounts and in the profit and loss account prepared on the date of survey. It was also explained that expenses like depreciation, interest on bank loan, rent , bad debts, deferred revenue write off and other outstanding expenses as on 31st March etc were provided only at the end of the year thereby resulting in huge reduction of profits between 23.3.2010 and 31.3.2010. The ld AO however observed that in respect of salary payments, the same are payable every month and there cannot be substantial variance between salary reported in the profit and loss account as on 23.3.2010 and that on 31.3.2010 except the provision to be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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