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2014 (4) TMI 740 - ITAT AHMEDABADAddition on account of closing stock Held that:- CIT(A) ought not to have rejected the book results as the books of the assessee are subjected to audit by various departments - the action of the CIT(A) rejecting the book of accounts is set aside, but there was no infirmity in the order of the CIT(A) in rejecting the alternate claim of the assessee that the closing stock for the AY 2007-08 be treated as opening stock of the AY 2008-09 - the CIT(A) has given liberty to the assessee to approach to the AO Decided partly in favour of Assessee. Disallowance of depreciation on fixed assets Intangible right of way and permissions Held that:- The assessee has placed documents, such as proof of payment made to various authorities, nd letter of Secon Private Ltd. dated 10/04/2007 along with land compensation award No.01/Nadiad - CNG PL/2007 in support of its contention on the issue the record of certain documents were not before the AO thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of additional depreciation @ 20% on plant and machinery Held that:- The decision in Income Tax Officer vs. Arihant Tiles & Marbles (P) Ltd. [2009 (12) TMI 1 - SUPREME COURT] followed - the authorities below were not justified in rejecting the claim of the assessee for additional depreciation Decided in favour of Assessee. Disallowance of prior paid expenses Held that:- The assessee has not placed anything on record suggesting that the bills and vouchers were received during the year under consideration except a statement is made that these expenses were crystallized and incurred during the year - It is not demonstrated that as to how these expenditure were crystallized during the year Relying upon CIT vs. Jagatjit Industries Ltd. [2010 (9) TMI 58 - DELHI HIGH COURT] the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee. Disallowance of interest on share application money Held that:- The share application money which was used in purchases of asset - The interest was capitalized by adding the sum to the cost of the asset on which depreciation was claimed - The lower authorities were not justified in disallowing the claim of depreciation as the interest expenses incurred became the cost of the asset acquired thus, the assessee is entitled for depreciation - the balance interest was not claimed as deduction by the assessee as submitted by the assessee thus, the order of the lower authorities and the addition is set aside Decided in favour of Assessee. Addition on account of liquidated damages Held that:- The assessee has received liquidated damages on account of delay in supply of machinery. the decision in CIT vs. Sauarashtra Cement Ltd. 2010 (7) TMI 11 - SUPREME COURT] followed - Compensation paid for the delay in procurement of capital asset amounted to sterilization of the capital asset of the assessee as supplier had failed to supply the plant the amount received by the assessee towards compensation for sterilization of the profit earning source, not in the ordinary course of their business, was a capital receipt in the hands of the assessee Decided in favour of Assessee.
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