Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: due date for vat payment :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: articles on VAT and GST in India :: form 3cd :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: Central Excise rule to resale the machines to a new company
« From the Courts »
  Dr. Gautam Sen vs. CCIT (Bombay High Court)
 Dr. Gautam Sen vs. CCIT (Bombay High Court)
 DCIT vs. Shivshankar R. Sharma (ITAT Mumbai)
 ACIT vs. Jawaharlal Agicha (ITAT Mumbai)
 CIT vs. M/s. D. Chetan & Co (Bombay High Court)
 Makes further amendments to Notification no. 157/90-Customs dated 28th March, 1990 regarding temporary admission under the ATA Carnet
 Appointment of Common Adjudicating Authority by DGRI - 2/2016-Customs
 ransfers Of Hon’ble Members Of The ITAT (September 2016)
 M. G. Contractors Pvt. Ltd vs. DCIT (ITAT Delhi)
 Haryana State Road & Bridges Development Corporation Ltd vs. CIT (P&H High Court)
 Dharamshibhai Sonani vs. DCIT (ITAT Ahmedabad)

Spank Hotels Pvt. Ltd.,B-6/17, Safdurjung Enclave,New Delhi-29 Vs. ACIT,Circle-9(1),C.R.Building,New Delhi.
October, 12th 2012
                   DELHI BENCH: `G' NEW DELHI


                          I.T.A .No.-3306/Del/2010
                        ASSESSMENT YEAR-2007-08

Spank Hotels Pvt. Ltd.,                Vs.   ACIT,
B-6/17, Safdurjung Enclave,                  Circle-9(1),
New Delhi-29                                 C.R.Building, New Delhi.
(APPELLANT)                                  (RESPONDENT)

                       Appellant by: Sh. V.K.Jain, CA
                  Respondent by: Dr. Prabha Kant, Sr. DR

                       Date of Hearing:-04.10.2012
                   Date of Pronouncement:- 10.10.2012



       This is an appeal filed by the assessee against the order of Ld. CIT(A)-XII,

New Delhi dated 17.03.2010 relating Assessment Year 2007-08. Ground No-2

which is in respect to disallowance of expenses u/s 40A(2)(b) was not pressed.

Therefore, the same is dismissed as not pressed.

2.     The main issue is against confirmation of Rs. 20 lacs u/s 40(A)(2)(b) of the


3.     Ld. Counsel of the assessee submitted that on similar facts, the

disallowance was made for immediately succeeding year i.e AY 2008-09 which

was deleted by Ld. CIT(A) and order of the Ld. CIT(A) has been confirmed by
                                         2                      I.T.A .No.-3306/Del/2010

the Tribunal while deciding appeal in ITA No. 4631/Del/2011 vide order dated

22.06.2012. Copy of the same was also filed.

4.    On the other hand, Ld. DR strongly objected the contention of Ld. AR.

There is no due income of except income from interest and dividend. Dividend is

considered u/s 14A and drawing interest i.e from FDR, no service could be

attributed for earning the interest. The Assessing Officer has already given a

reasonable deduction on account of salary i.e Rs. 5 lacs out of Rs. 30 lacs claimed

by assessee. Ld. CIT(A) again has given further relief of Rs. 5 lacs. It was,

further submitted that salary is to be proportionate to the services provided and

reasonable salary has already been allowed, therefore, the assessee should not be

allowed for further relief.

5.    After considering the submissions and perusing the material on record, we

find that assessee deserves to succeed on the issue involved.      It is seen that

A.O has disallowed salary u/s 40(A)(2)(b) for succeeding year i.e AY 2008-09

also. The salary was disallowed u/s 40(A)(2)(b) which was deleted by Ld.

CIT(A) and Tribunal has confirmed the order of the Ld. CIT(A) for AY 2008-09.

There is no change in facts and circumstances. In subsequent year, the salary

paid to the same Director, has been held as reasonable by the Tribunal.

Therefore, in our considered view in preceding year, it cannot be said that the

salary amount is not justified.    Same activities are involved i.e earning of

dividend and as earning of interest in subsequent year. Now Ld. DR wants that

salary should be allowed only of the proportionate amount of the services
                                         3                      I.T.A .No.-3306/Del/2010

rendered. It is very difficult to attribute the part of services provided by the

Director that how much proportionate is correct or how much is not correct. This

has to be seen in view of the section 40(A)(2)(b) in which basis the Assessing

Officer has disallowed.

6.    As stated above, the order of Assessing Officer was not approved either by

Ld. CIT(A) or by Tribunal for immediately succeeding year.               Respectfully

following the Tribunal, we direct to allow his claim for the year under

consideration also.

7.    In the result, the appeal of the assessee is allowed.

      Order pronounced in the Open Court on 10.10.2012.

      Sd/-                                                                Sd/-

(S.V.MEHROTRA)                                                      (R.K.GUPTA)
ACCOUNTANT MEMBER                                             JUDICIAL MEMBER

Dated: 10/10/2012

Copy forwarded to:
1.   Appellant
2.   Respondent
3.   CIT
4.   CIT(Appeals)
5.   DR: ITAT

                                                        ASSISTANT REGISTRAR
                                                             ITAT, NEW DELHI
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions