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TMI Blog2017 (5) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... n upholding the learned Assessing officer's action in further disallowing on ad hoc basis expenses amounting to Rs. 68350/- u/s 14A in addition to Rs. 40,194/- disallowed by the appellant company in its return of income. 3. The appellant craves leave to add, alter or amend the ground of appeal at a later stage. 2. Brief facts of case are as under assessee filed its return of income on 30.11.2006 declaring total income of Rs. 5,67,8,170/-. The said return was processed under section 143(1) of the Act and case was selected for scrutiny. Notices under section 143(2) and 142(1) of the Act were issued alongwith detailed questionnaire. In response to these notices representatives of assessee appeared for assessment proceedings. 3. It has been observed by Ld. AO that during the year under consideration, assessee applied new guidelines issued by Institute of Chartered Accountants regarding recognition of revenue by real estate developers. It was observed that assessee had shown 39.29% of project completed during year under consideration. Ld. AO observed that in balance sheet for year ending 31.03.2005, there was appearing share application money of Rs. 4,37,50,000/-. However, during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternational at 12.5% stood utilized, and were different than interest of 10% received on temporary loans advanced to Big India Malls Pvt. Ltd., and 12% compounded quarterly received from Grandeur Real Estate Pvt. Ltd., by assessee. He submitted that these could not be compared to determine the disallowability under section 40A(2)(b) of the Act. 10. He also submitted that interest received by assessee was more than interest paid including interest of Rs. 57,40,201/- earned from two companies, being Big India Malls Pvt. Ltd., and Grandeur Real Estate Pvt. Ltd., details of which are at page 49 of paper book. He submitted that loan taken from Magnum International Trading Company Pvt. Ltd., at 12.25%, was a long-term loan which was invested in the real estate project and assessing officer should have considered interest rates available on borrowings of unsecured loans in the market for the purpose of determining reasonability. 11. On contrary Ld. DR submitted that it cannot be said that amount of Rs. 4,37,50,000/- stood invested in real estate project as assessee advanced loans from this money to Big India Malls Pvt. Ltd., and Grandeur Real Estate Pvt. Ltd. He also submitted that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. 18. Ground No. 2 is in respect of disallowance of ad hoc expenses under section 14A of the Act. 19. Ld. AR submitted that assessing officer has computed 14A disallowance on dividend income earned and long term capital gain received by assessee amounting to Rs. 3,54,048/- and Rs. 3,31,281/- respectively. Ld. AR placed reliance upon decision of this Tribunal in the case of Beetel Tech Ltd., in ITA No. 4958/Del/2012 and 5220/Del/2012 passed for assessment year 2006-07 vide order dated 07.03.2014. He submitted that assessing officer computed disallowance at the rate of 10% of expenses incurred, which included capital gains income accrued to assessee during year under consideration. He submitted that for the purposes of disallowance under section 14A, long term capital gain earned by assessee cannot be considered. 20. On the contrary, Ld. DR submitted that issue may be sent back to Ld. AO for computation of disallowance under section 14A. 21. We have perused submissions advanced by both sides in the light of records placed before us. 22. As both Ld. AR and Ld. DR agrees for the issue to be set aside to file of Ld. AO, in the interest of justice, we direct Ld. AO to recomput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as under: Assessee filed its return of income for the year under consideration on 30.09.2008 declaring an income of Rs. 8,52,25,538/-. The case was processed under section 143(1) of the Act and was selected for scrutiny. Notices under section 143(2) and 142(1) of the Act were served along with questionnaire. In response to notices issued as representatives of assessee appeared before assessing officer and filed details as called for. 26. While concluding assessment, Assessing Officer made following disputed additions alongwith other miscellaneous additions which has not been raised before us- disallowance under section 40A (2)(a)(b) Rs. 9,84,375/-, consultancy payments Rs. 16,44,711/-, disallowance under section 14A Rs. 6, 22, 684/-. 27. Aggrieved by addition made by assessing officer assessee preferred appeal before Ld. CIT(A), who confirmed the additions. 28. Aggrieved by order passed by Ld. CIT(A), assessee is in appeal before us now. 29. Ground No. 1 and 3 are in respect of disallowance under section 40A(2) and 14 A read with rule 8D of the Act. 30. As these issues have already been decided by us for assessment year 2006-07, following same, we direct the A.O to adopt the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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