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2013 (1) TMI 566 - ITAT AHMEDABADAddition in respect of interest on borrowed capital - CIT(A)deleted the addition - Held that:- Considering the documentary evidences produced by the assessee that he had not availed any specific loan which has been used for addition to capital assets with no bank borrowing in order to acquire fixed assets & whatever banking loan was availed it was used for working capital as assessee had sufficient interest-free funds for procuring fixed assets revenue could not controvert the above findings of CIT(A) with any cogent evidence & on perusing the statement of Chartered Accountant's of the assessee company that “borrowing costs are recognized as expenses in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction, or production of an asset till put for its intended use is capitalized as part of the cost of that asset, it is apparent that the assessee has not charged any interest expense attributable to purchase of fixed asset to the profit and loss account of the assessee - against revenue. Disallowance of depreciation and other expenses - CIT(A)deleted the addition - Held that:- As decided in assessee's own case [2010 (11) TMI 841 - ITAT AHMEDABAD] in regard to ownership of the vehicle it is purchased by the assessee-company in the name of Director and it is not in dispute that fund for purchase of the vehicle was from the assessee-company as assessee filed complete funds flow statement which proves that the vehicle was purchased from the assessee-company’s funds. As decided in CIT v. Mohd. Bux Shokat Ali [2001 (2) TMI 26 - RAJASTHAN HIGH COURT] assessee company-firm was entitled to depreciation on vehicle purchased by it for its business purpose but registered in the name of one of the partners- car expenses cannot be disallowed in the hands of a company as there cannot be any personal expenses in case of a company as decided in Sayaji Iron & Engineering Co. case [2001 (7) TMI 70 - GUJARAT HIGH COURT] - against revenue. Disallowance by capitalizing Repairs and Maintenance expenses - CIT(A) deleted the addition - Held that:- The reasons pointed out by the assessee for treating the payments for purchase of various items as revenue expenditure has not been duly confronted by the AO and made a finding on the same as to why these payments are to be treated as capital expenditure. Since, the amount involved was meager compare to the overall transactions of the appellant company, CIT(A) judiciously allowed the appeal of the assessee in its favour. Thus as the amount involved is negligible and no resource needs to be unnecessarily wasted on this issue therefore confirm the order of CIT(A) - against Revenue. Addition u/s 40A (2) (b) - CIT(A)deleted the addition - Held that:- CIT(A) was right to hold that the price difference was due to the nature of trading i.e. wholesale and retail. Moreover, as observed by the CIT(A), AO has not brought out any material on record to establish that the appellant had sold the products to its sister concern below the prevailing market rate. Thus in total conformity with the order of the CIT(A) and, therefore, uphold the same - against revenue.
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