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TMI Blog2017 (5) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not carried out any business activity during the year under appeal - Held that:- FAA observed that the AO had given a specific opportunity to the assessee to submit complete details for furniture,AC and motor car on which depreciation had been claimed, that no documentary evidences was furnished before him to prove the genuineness of the claim, that even during the appellate proceedings the assessee had filed papers without any evidence of use of the assets for the business,that it had failed to submit to substantiate its claim. Finally,he upheld the order of the AO. As nothing has been produced before us that could lead to the conclusion that decision of the AO/FAA is factually legally incorrect - Decided against assessee Addition made u/s.14A - Held that:- FAA after considering the submissions of the assessee and the assessment order held that the provisions of section 14A were applicable for the year under appeal, that assessee had received exempt income. Referring to case of Godrej and Boyce Manufacturing Company Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT)the FAA upheld the ad hoc disallowance of 73, 705/-. There is nothing on record to prove that order of the FAA suffers fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.59 lakhs under the head interest from Federal bank on FDR.s), that it had claimed expenses under various heads. He observed that the assessee had not carried out any business activity during the year under appeal, that it had received interest on the FDR and dividend on shares,that interest income was not derived from industrial undertaking/business,that it had no direct nexus with deposits on which interest was earned.He referred to the cases of Pandian Chemicals (262 ITR 278) and Sterling Food(237 ITR 579) and concluded that interest income and dividend income had to be assessed under the head income from other sources. 2.1.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA) and made submissions in that regard.After considering the available material, the FAA held that the business of the assessee was investment in shares and not to earn interest on FDRs, that section 14 of the provided heads of income in which it was specifically mentioned that for the purpose of stars of taxes and competition of income income had to be classified under different heads,that section 56 dealt with income from other sources, that it covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest,that the borrowed funds were not utilized for the business purposes. He referred to the case of Soma Sundaram and Bros (238ITR939) and M.M. Ali (52ITR165) and held that interest paid by the assessee was not allowable u/s. 36(1)(iii) of the Act. 3.2.Before us,nothing was brought on record to challenge the factual finding of the FAA. Therefore, confirming his order we dismiss Ground No.3. 4.Fourth ground pertains to disallowance made under the heads salary and conveyance of ₹ 1.02 lakhs. During the assessment proceedings, the AO noticed that the assessee had shown administrative expenses ₹ 1.76 lakhs including salary (Rs.60,000/-) and conveyance charges (Rs.42,670/-). Considering the fact that during earlier year the assessee had not claimed such expenditure and the supporting evidence were not furnished the AO disallowed 50% of the expenses(Rs.51,335/-) and added it back to the income of the assessee. 4.1.During the appellate proceedings, the FAA observed that the AO had given specific opportunity to the assessee to submit complete bills and vouchers to prove the incurring of expenses for business purposes, that it did not file required documents, that before hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived exempt income. Referring to case of Godrej and Boyce Manufacturing Company Ltd. (328 ITR 81), the FAA upheld the ad hoc disallowance of ₹ 73, 705/-. There is nothing on record to prove that order of the FAA suffers from any infirmity. So confirming the same we dismiss sixth ground. 7.Last ground of appeal deals with disallowance made of ₹ 75.64 lakhs,u/s.41 of the Act. During the assessment proceedings the AO found the assessee had shown interest accrued and you at ₹ 1.43 corrodes, he issued a detailed show cause notice to furnish all the details with documentary evidences. After considering the submission of the assessee the AO held that it had filed only photo copies without original signature of the parties, that no addresses were furnished,that in one case the confirmation was not signed by the lender and same was without any supporting evidence.However,he agreed that the amount of interest receivable shown at ₹ 68.19 lakhs was not covered under the provisions of section 41 of the Act.He held that balance amount of ₹ 75.64 lakhs (Rs. 1.43 crore (-) ₹ 68.19 lakhs) had to be treated as cessation of liability as per the provisions sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. 10.Next ground pertains to disallowance of depreciation of ₹ 35,570/-.The AO and the FAA have given a categorical finding that no business activities were carried out by the assessee during the year under appeal,that depreciation was not allowable to it. Nothing was brought on record to prove that the finding of the FAA were factual incorrect. So, confirming the his order,we dismiss ground no.5,raised by the assessee. 11.Disallowance of ₹ 31,207/-u/s.14A of the Act is the subject matter of next ground.As pre the FAA the assessee had not pointed out any discrepancy in the computation of disallowance made u/s.14A.Before us,also nothing was brought on record to prove that disallowance made by the AO and confirmed by the FAA was perverse.Upholding the order of the FAA,we decide sixth ground against the assessee. 12.Last effective ground is about computation under the MAT provisions vis a vis disallowance u/s.14A of the Act. The FAA had decided the issue against the assessee following the order of the Tribunal in the case of R B K Shares Broking Ltd.(37 taxman.com 128).Considering the above,we are of the opinion that there is no need to disturb the findings of the FAA. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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