9911796707
TMI Blog2024 (6) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... erving document and it does not explain the difference in transaction as noted in the case of Urbanize Developers India Pvt. Ltd. AO has not made any enquiry from Urbanize Developers India Pvt. Ltd. on the basis of ledger account as filed by the assessee. The matter is, therefore, set aside to the file of the AO to re-examine the matter once again by making necessary enquiry from Urbanize Developers India Pvt. Ltd. The assessee may also be allowed another opportunity to reconcile the difference in respect of Urbanize Developers India Pvt. Ltd. and the AO may decide the matter after making a proper enquiry as indicated above. The ground is allowed for statistical purpose. No wrong with the direction of the CIT(A) to make enquiry from Vijaya Bank and re-decide the matter in respect of difference as appearing in 26AS. Any mismatch between the accounts of the assessee and Form No.26AS has to be properly explained and enquired into. A direction to make specific enquiry from the bank and to re-decide the matter does not tantamount to setting aside the order of the AO. In view of discussions in respect of Ground No.1 as above, the direction of the CIT(A) is held as proper and Ground No.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed 50% of corporate guarantee commission paid to the associate concern who had extended guarantee for various loans taken by the assessee from HFDC Bank, Kotak Bank, Axis bank, IndusInd Bank SBICAP Trustee Co. etc. - AO found that the rate of guarantee commission was excessive and, therefore, disallowed 50% of the guarantee commission paid, which has been upheld by the Ld. CIT(A) -HELD THAT:- AO has treated the guarantee commission as excessive and disallowed 50% of the claim without bringing on record any comparable case. As rightly pointed out by the assessee the onus was on the department to demonstrate that the expenditure incurred was excessive or unreasonable by brining on record guarantee commission payment in comparable cases. AO has also not given any reason for disallowing 50% of guarantee commission payment. Further, the provision of Section 40A(2)(b) of the Act was not invoked before making adhoc disallowance of 50% of guarantee commission. Even in the case where the provision of Section 40A is invoked, the AO has to establish that the expenditure was excessive or unreasonable having regard to fair market value of the payment made or the legitimate needs of the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.R. For the Respondent : Shri Prathvi Raj Meena, CIT. DR ORDER PER SHRINARENDRA PRASAD SINHA, AM: The present appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Vadodara, (in short the CIT(A) ) dated 08.03.2018 for the Assessment Year 2014-15. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2014-15 on 29.11.2014 declaring total income of Rs. 93,14,45,622/-. The assessment was completed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act ) on 30.11.2016 at total income of Rs. 1,00,59,92,332/-. The AO had made certain additions in the course of assessment which were contested before the CIT(A) and which has been decided vide the impugned order. Aggrieved with the order of the CIT(A), the assessee has filed the present appeal. 2. It has been informed by the assessee vide letter dated 10th April, 2024 that Piramal Finance Ltd. (PFL) had merged into erstwhile Piramal Capital Housing Finance Ltd. w.e.f. 31.03.2018 by order of the NCLT, Mumbai dated 06th April, 2018. Thereafter, Piramal Capital Housing Finance Ltd. had merged into Dewan Housing Finance Corporation Ltd. w.e.f. Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible deduction u/s 80G of the Act. 2 The Appellant prays that the deduction u/s 80G of the Act amounting to Rs. 2,36,08,173/-be allowed GROUND V: DISALLOWANCE OF GUARANTEE COMMISSION AMOUNTING TO Rs. 3,66,97,553/- PAID TO PIRAMAL ENTERPRISES LTD ( PEL ) 1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO of disallowing Rs. 3,66,97,553/, being 50% of the Guarantee Commission paid to PEL, by holding the same to be excessive as compared to the fair market value which was not disputed by the AO, without providing an opportunity to the assessee as required u/s 251(2) of the Act 2. He further erred in not appreciating that the expense was incurred wholly and exclusively for the purpose of business and therefore allowable u/s 37(1) of the Act and has been so allowed in the earlier year. 3. The Appellant prays that the disallowance of 50% of the guarantee commission paid be deleted GROUND VI GRANT OF SHORT CREDIT OF TDS TO THE EXTENT OF Rs. 1,57,78.615-: 1 On the facts and circumstances of the case and in law, the AO erred in granting TDS credit of Rs. 12,98,78,591). as against Rs. 14,56,57,208/, thereby granting a short credit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT [2018] 173 ITD 229 (Ahm. Trib) iii. P.K. Rajasekar v. ITO [2016] 161 ITD 189 (Chen. Trib.) iv. M/s. Nozaki Finance Investment Private Ltd. v. DCIT (ITA No. 6166/Mum/2012) (Mum. Trib.) v. TUV India (P.) Ltd. v. DCIT [2019] 110 taxmann.com 175 (Mum. Trib.) vi. Kroner Investment v. DCIT (ITA No. 5125/M/2013) (Mum. Trib.) 6. Per contra, the ld. CIT-DR submitted that the assessee had merely filed a copy of the ledger account of Urbanize Developers India Pvt. Ltd as appearing in its books of account which was not confirmed by the other party. Therefore, the AO was correct in making the addition in respect of this difference as the same was not reconciled. As regarding difference in the case of Vijaya Bank, the ld. DR submitted that the direction of the ld. CIT(A) to verify the transaction was proper. 7. We have carefully considered the rival submissions and the facts of the case. There is no dispute to the fact that there was difference appearing in the accounts of the assessee vis- vis amount of transaction as per 26AS statement in the case of Urbanize Developers India Pvt. Ltd. As per 26AS statement, the total receipt from Urbanize Developers India Pvt. Ltd. was Rs. 13,55,39,687/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the assessee has not denied the transaction and the TDS as appearing in 26AS statement. Thus facts of all these cases and the other cases as relied upon by the assessee are found to be different. 9. It is apparent from the facts as discussed above that the assessee had not denied the quantum of transaction and the TDS of Urbanize Developers India Pvt. Ltd. as reported in Form No. 26AS, rather the difference of TDS of Rs. 1,40,028/- was carried forward in the return. Under the circumstances, the assessee was duty bound to reconcile the difference in the quantum of transaction as per 26AS and as appearing in the books of accounts. The assessee has also not filed any confirmation from Urbanize Developers India Pvt. Ltd. that ledger account appearing in its own account which was filed before the AO, was correct. The ledger account as appearing in the books of the assessee is a self-serving document and it does not explain the difference in transaction as noted in the case of Urbanize Developers India Pvt. Ltd. On the other hand, the AO has not made any enquiry from Urbanize Developers India Pvt. Ltd. on the basis of ledger account as filed by the assessee. The matter is, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount on ineligible projects, then the certificate issued by the CBDT should have been cancelled, which was not done. The ld. AR has drawn our attention to provision of Section 35AC of the Act and contended that for any wrong done by the institute, no addition can be made in the hands of donor. He has placed relied upon the decision of CIT vs. Gujarat Co-op Milk Marketing Federation Ltd. 43 taxmann.com 398 (Guj.HC) in this regard. 13. The Ld. DR, on the other hand, submitted that the contribution made by the assessee to HMRI was for specific projects only and if the entire amount was not spent on those approved projects, the AO had rightly made the disallowance. He strongly supported the order of the CIT(A) in this regard. 14. We have carefully considered the facts of the case. As per provision of Section 35AC of the Act, the assessee is eligible for deduction in respect of payment made to approved institute for carrying out any eligible project or scheme. As long as this condition is satisfied, the donor is eligible to claim the deduction. The Ld. AR had contended that for wrong application of funds by the recipient institute, no disallowance can be made in the hand of the donor an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of Section 35AC of the Act as discussed above and also the decision of the Jurisdictional High Court, we are of the considered opinion that no disallowance of claim u/s. 35AC of the Act should have been made in the hands of the assessee for the default on the part of the approved institute. Accordingly, the addition made on account of proportionate disallowance of claim u/s. 35AC of the Act is deleted. The ground is allowed. 16. Ground No.4 was only an alternate claim for deduction u/s. 80G of the Act, in case the deduction u/s. 35AC of the Act was not found eligible. In view of our decision in respect of Ground No.3, this Ground has become infructuous, hence dismissed. Ground No.5 Disallowance of guarantee commission 17. The AO disallowed 50% of corporate guarantee commission paid to the associate concern M/s. Piramal Enterprises Ltd. who had extended guarantee for various loans taken by the assessee from HFDC Bank, Kotak Bank, Axis bank, IndusInd Bank SBICAP Trustee Co. etc. The corporate guarantee commission was paid @ 1.5% to 1.8% per annum. The AO found that the rate of guarantee commission was excessive and, therefore, disallowed 50% of the guarantee commission paid, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion application u/s. 154 of the Act dated 12.12.2016 for allowing full credit of TDs claim. The AO is directed to verify the claim of TDS as made in Income Tax Return and also the re-conciliation statement filed by the assessee. The credit for TDS claim should be allowed in accordance with provision of Section 199 of the Act. The ground is allowed for statistical purpose. Ground No.7 Levy of interest u/s.234A of the Act 22. The ld. AR submitted that the due date of filing of Income Tax Return for this year was extended by the CBDT. The assessee had paid all the taxes within the original due date of filing of return i.e. before 30th September, 2017. Under the circumstances, no interest u/s. 234A of the Act should have been charged. In this regard, reliance was placed on the decision of Hon ble Gujarat High Court in the case of All Gujarat Federation of Tax Consultants vs. CBDT, [2014] 50 taxmann.com 115 (Guj.HC). 23. Ld. DR, on the other hand, submitted that charging of interest u/s. 234A of the Act was mandatory. 24. We have carefully considered the submissions of the assessee. Hon ble Gujarat High Court in the case of All Gujarat Federation of Tax Consultants (supra) held as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
