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TMI Blog2021 (11) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal that if there is no exempt income, no disallowance can be made u/s 14A of the Act. Therefore, we uphold the order of CIT(A) in deleting the disallowance made u/s 14A rwr 8D of the Act. Thus, the ground raised by the revenue on this issue is dismissed. Disallowance of expenditure in respect of bogus sub-contracts - AO observed that a survey u/s 133A was conducted by the ADIT, Unit I, in which certain bogus sub-contract expenses came to light - HELD THAT:- CIT(A) accepted that the payments made by way of cheques and the TDS made on the payments made to sub-contractors. However, the CIT(A) has not examined the genuineness of the works undertaken by the sub-contractors and he did not examine any other related documents for substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laxmi Prasad Sahu, Accountant Member For the Revenue : Shri Y.V.S.T. Sai For the Assessee : Shri Mohd. Afzal ORDER PER L.P. SAHU, A.M.: This appeal filed by the Revenue is directed against CIT(A) - V, Hyderabad s order dated 18/11/2014 for AY 2011-12 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ; in short the Act, on the following grounds of appeal: 1. On the facts and in circumstances of the case, and in law, the CIT(A) erred in deleting the disallowance made u/s 14A. 2. On the facts and in circumstances of the case, and in law, the CIT(A) erred in admitting additional evidence in contravention of Rule 46A in respect of bogus-subcontract expenditure and liquor purchases. 3. On the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 8,09,22,589/- to the P L Account towards interest expenditure. Before the AO, the assessee contended the investment in the shares of the subsidiaries or other entities under the control of key management personnel and their relatives was purely of business perspective or the entities were purely project specific where the entire work of the company will be taken up by the holding company only. The AO did not accept the contentions of the assessee and opined that all the subsidiary companies were separate legal entities and therefore, disallowed an amount of ₹ 1,77,16,522/- u/s 14A r.w.r 8D. 4.1 Before the CIT(A), the assessee filed written submission, in which, inter-alia stated that similar interest expenditure was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee had booked expenses to the extent of ₹ 14,39,96,963/- for the AY 2011-12 under the head M/s BSK Dismantling Excavation and Stone cutting . The AO held that the works of excavation and stone cutting was not genuine in nature and disallowed the same. 5.1 Before the CIT(A), the assessee filed additional evidences consisting of letters from BSK regarding dismantling, excavation and stone cutting ledger extracts, bank statement showing the payments made to BSK etc. and the CIT(A) forwarded to the AO calling for a remand report on the additional evidence furnished by the Assessee before him. 5.2 Since the AO had not submitted remand report, the CIT(A) accepted the additional information furnished by the assessee and hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter providing reasonable opportunity of being heard to the assessee in the matter. Thus, this ground is treated as allowed for statistical purposes. 6. As regards ground No. 4 relating to the addition of ₹ 43,06,952/- towards excess debit, the AO observed that the assessee obtained permission from Excise Dept. of the State to sell liquor in the hotels it runs. The Dept. does TCS in case of the purchases made by the assessee. As the permission is obtained by the Directors Sri D. Vijay Sen Reddy and Sri Nandi Ravinder Reddy, TCS details were obtained in their respective 26AS. The AO observed that the total purchases on which TCS made was ₹ 1,25,92,944, but the purchase of liquor debited in the P L Account was ₹ 1,68,99,89 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the A.O. was not justified in not considering the Form.26AS of the appellant company and hence, based on the facts of the case, additional information submitted by the appellant is accepted under powers vested u/s 250 rwr Rule 46A of the IT Act. Hence, the addition of Rs,43,06,952 is deleted. 6.3 Before us, the ld. DR relied on the order of the AO, while the ld. AR besides relying on the order of the CIT(A), filed its submissions in the paper book, which are as under: In addition to development of properties the assessee is also in hospitality business, managing a resort and restaurant in the name of Celebrity Resorts. This club is having license from the Excise Department to purchase and sell liquor. The license is in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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