Brief of the Case: In the cited case, ITAT inter-alia held that merely because prices of land has gone up, rent cannot be increased particularly to persons covered u/s 40A(2)(b) of the I.T Act without looking into agreement in respect of rent for the earlier years and for the present year, it cannot be accepted the increase in rent is proper and as per the agreement.
Facts of the Case: The Assessee appealed against three separate orders of CIT (A) dated 24.05.2014 for A.Y.2003-04, dated 29.05.2014 A.Y.2004-05 and dated 23.06.2014 for A.Y.2006-07. All these appeals were heard together and disposed by this common order.
The Ground for appeal:
A.Y.2003-04
- “That the Ld CIT(A)–I has erred in law and on facts while confirming the disallowance of Rs.360,000/- being 50% of the remuneration paid to whole time managing director of the assessee/appellant u/s 40A(2)(b).”
- “That the Ld CIT(A)–I has erred in law and on facts while confirming the partial disallowances of Telephone Expenses, Conveyance Expenses, Travelling Expenses and General Expenses”
A.Y.2004-05
- “That the Ld CIT(A)–I has erred in law and on facts while confirming the disallowance of Rs. 240,000/-being the increase in rent paid to whole time managing director against use of land on which manufacturing plant of the assessee/appellant has been constructed u/s 40A(2)(b).”
- “That the Ld CIT(A) –I has erred in law and on facts while confirming the disallowance of Rs. 164,042/-being the irrecoverable amount written off, which was paid as advance to consultancy agencies for financial advice/consultancy regarding increase in capital base of the company through issue of shares or other modes, by considering the same as capital expenditure.”
- “That the Ld CIT(A)–I has erred in law and on facts while confirming the partial disallowances of Telephone Expenses, Conveyance Expenses, Travelling Expenses and General Expenses”
A.Y.2006-07
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