Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 820 - ITAT LUCKNOWDisallowance of interest paid on unsecured loans to the persons specified under section 13(3)/40A(2)(b) of the Income-tax Act, 1961 - Substantial loan was borrowed by the assessee from the parties specified under section 40A(2)(b) of the Act besides other creditors. But interest was paid at the same rate i.e. @ 18% per annum to both the types of creditors - Nothing is placed on record to establish that the assessee has paid lesser rate of interest to the financial institutions. Moreover, no loan was borrowed from the financial institutions in the impugned assessment year - Since the assessee has paid interest @ 18% per annum to all types of its creditors, disallowance of excess payment of interest on the ground that higher rate of interest was paid to the persons specified under section 40A(2)(b) of the Act cannot be sustained – Decided against the Revenue. Rate of depreciation of books purchased for college library - Assessee claimed depreciation @ 60% on book purchased for college library, but the Assessing Officer allowed depreciation only @ 15% by holding that the books are plant and machinery and the assessee is running an educational institution and is not engaged in the business of lending library – Held that:- There is force in the contentions of the assessee that due to fast changing technology around the globe, the reference books also become obsolete in a short span - Books were given to the students for which library charges were collected by the assessee-society. Therefore, as per para 9(ii) of the Schedule of Depreciation of the Income-tax Rules depreciation is to be allowed @ 100% - Decided against the Revenue. Reference under section 142A of the Act was made to the DVO for estimating the value of college building of the assessee-society without rejecting the books of account – Held that:- Reliance is placed upon the Apex court judgment in the case of Sargam Cinema vs. CIT [2009 (10) TMI 569 - Supreme Court of India ], wherein it was held that without rejecting the books of account, reference to the DVO cannot be made – In the present case, assessing Officer has not rejected the books of account of the assessee. The assessee's books of account are properly audited and no defect has been pointed out therein. There is no specific finding of the Assessing Officer for rejection of the books of account. Therefore, reference to the DVO was made without rejecting the books of account. Thus, the reference to the DVO was not sustainable in the eyes of law as per the aforesaid judgment of the Hon'ble Apex Court and estimation made on the basis of the DVO's report deserves to be deleted – Decided against the Revenue.
|