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2014 (5) TMI 883 - AT - Income TaxClaim of depreciation on pellet manufacturing unit – Held that:- The reason why AO denied the depreciation claim on the new pelletization plant, was that there was no additional power used by the assessee – AO placed too much reliance on the letter sanctioning additional power load - Just because power sanction for additional power load was not given would not be a reason to say that assessee had not started working its new pelletization plant - Non-availability of certification under the Factory Safety Rules, for starting a new boiler from the concerned Boiler Control Authority, could make functioning of the unit irregular - It cannot be considered as sufficient evidence to reach a conclusion that commercial functioning had not started - assessee had produced considerable evidence which all pointed out clearly that assessee had commenced commercial production at least on 27.02.2007 - the order of the CIT(A) took a correct view when he directed depreciation to be allowed on the pelletization plant – Decided against Revenue. Disallowance of commission payment – Held that:- There was an agreement between assessee and M/s. R.B. Steel & Alloys and the commission was paid by the assessee to the said concern as per terms and agreement - The commission was paid after deducting tax and also after effecting service tax payment - Similar commissions paid in the preceding years were allowed by the Revenue - There is no case for the Revenue that M/s. R.B. Steel & Alloys was in any way related to the assessee - Commission of @ Rs.25/- per MT on sponge iron sold, and could not be considered as excessive payment - There was nothing on record to show that commission incurred was not for the purpose of business of the assessee –CIT(A) was justified in deleting the disallowances – Decided against Revenue. Allowability of keyman insurance premium – Held that:- Keyman’s Insurance policy was on the Directors of the assessee-company - Premium paid was for their life insurance - Relying upon CIT -vs. - B.N. Exports [ 2010 (3) TMI 186 - BOMBAY HIGH COURT] - Keyman’s Insurance Policy premium paid on persons who are instrumental for the effective functioning of a business, is an allowable deduction – thus, there was no infirmity in the order of the CIT(A) – Decided against Revenue. Deletion on account of interest – Held that:- Nothing was brought on record by the revenue to rebut the findings of CIT(A) - the stand of CIT(A) is upheld that Pelletization plant of the assessee had started functioning during the relevant previous year – thus, CIT(A) was justified in deleting the disallowance of interest – Decided against Revenue. Disallowance u/s 36(1)(va) of the Act – Employees’ contribution to Provident Fund - Held that:- CIT(A) had allowed the claim based on a specific finding stated that the amounts were deposited before the due date of furnishing the return of income – Following CIT -vs.- Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] - Even employees’ contribution to P.F., if remitted before the due date of filing of return of income is allowable – there was no reason to interfere with the direction of CIT(A) – Decided against Revenue.
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