9911796707
TMI Blog2025 (3) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... Against this order the Revenue is in appeal before this Tribunal by taking following grounds of appeal: - 1. "The Ld. CIT(A) has erred in law and on facts in deleting the disallowance made by the AO u/s 14A of the I.T. Act on account of dividend income earned by the assessee company to the tune of Rs. 2,86,715/-. 2. The Ld. CIT(A) has erred in law an on facts in deleting the disallowance of depreciation on temporary structures amounting to Rs. 10,60,114/- made by the AO considering that the assessee company has fetched revenue to the extent of 10% depreciation claimed on temporary constructions on which the assessee has claimed 100% depreciation. 3. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 6,90,000/- made by the AO on account of excess remuneration paid to Mrs. Guliani, Director and Wife of managing Director of the company being 10% of Rs. 69 lakhs paid to her. 4. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 15,56,674/- made by the AO considering 2% of the amount spent by the appellant shuttering material as scrap value. 5. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, therefore, such order deserves to be confirmed on this account. 7. We have heard the rival submissions and perused the material available on record. In the present case admittedly assessee was having exempt income in the shape of dividend at Rs. 42,800/- and also claimed interest on borrowed funds. It is a case where mixed funds were available for making investments and Assessing Officer has failed to make out a case where interest bearing funds are directly applied in making such investments. Under the circumstances, in our considered view the disallowance made u/s 14A should be restricted to the exempt income earned by the assessee. Therefore, we uphold the addition of Rs. 42,800/-. As a result this ground of appeal of Revenue is partly allowed. 8. Second ground of appeal of the Revenue is with regard to the depreciation of Rs. 10,60,114/- claimed @ 100% on temporary structures. After considering the facts, we find that the assessee has claimed depreciation @100% on the temporary structures created at various work sites which were demolished after the completion of the project. The Assessing Officer has disallowed 10% of such depreciation claimed without appreciating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decided and dismissed in limne for below tax effect. From the perusal of the facts and the details filed by the assessee on this issue, we find that the expenditure includes purchases of some items such as wooden frames, plywood, sawn timber, imported pine sawn timber, shuttering pine wood, etc. and the nature of which was such that they have to be consumed within a short period of time. It is also a matter of fact that assessee is having multiple sites where such consumables are required on regular basis. It is also seen that a total revenue generated was of 65.07 crroes on contractual work as against which the expense on consumables were claimed as 7.78 crores which is around 12% of the total revenue. Looking to these facts, we are in conformity with the order of the Ld. CIT(A) that consumable items are inevitable part for execution of the contract work and, therefore, we uphold the order of the Ld. CIT(A) confirming the deletion of the disallowance so made. Thus, this ground of Revenue is dismissed. 11. Fifth ground of appeal is in relation to addition of Rs. 3 lakhs made by the Assessing Officer by observing that assessee has made earnest money deposited with its subsidiary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Company Pvt. Ltd. and M/s Riddhi & Siddhi Infra Properties & Realtors P. Ltd. The assessee also filed the copies of the invoices raised by these two parties to the assessee. The Assessing Officer in order to make verification has issued summons u/s 133(6) of the Act. However, no response was received from these parties. The AO further observed that in the case of M/s Bridge and Building Construction Company to whom payments of Rs. 16,86,87,593/- was made, as per the report of the AO of such firm, it had plant and machinery of Rs. 5,58,145/- only. The AO further observed that in the case of Riddhi & Siddhi Infra Property and Realtors Pvt. Ltd. one Shri Praveen Agrawal in his statements recorded u/s 132(4) on 13.09.2012 has admitted that no actual work has been done by the Companies managed and controlled by him which inter alia include M/s Riddhi & Siddhi Infra Properties and Realtors Pvt. Ltd. Further, the AO observed that in the case of M/s Silicon Real Estate Pvt. Ltd. an information was received from DDIT, Central Circle-44, Kolkata that such firm has provided turnover entries to facilitate the beneficiaries to book bogus expenditure under the head "sub- contract, job commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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