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2015 (3) TMI 268 - AT - Income TaxAddition on account of interest and penalty - CIT(A) noted that out of ₹ 88,453/-, ₹ 8,594/- was penal in nature and, therefore, he allowed a relief of ₹ 79,859/- and restricted the addition at ₹ 1,25,846/- - Held that:- No infirmity in the order of ld. CIT(A), because only those payments, which were penal in nature, could be disallowed. - Decided against revenue. Work out of short term capital gain - AO invoking the provisions of section 50 - CIT(A) held that AO erroneously took the figure of sales proceeds of the assets at ₹ 70,36,357/- which included MODVAT, excise duty etc. as against the actual sale consideration of ₹ 47,50,5001-. The Ld. AO also missed out the fact that the entire block was not sold out and there was an addition of ₹ 29,5001- to the same during the year - Held that:- Respectfully following the decision of CIT Vs. Eastman Industries Ltd. [2008 (9) TMI 17 - HIGH COURT DELHI ] in the event the block of assets i.e., a class of asset(s) bearing same rate of depreciation exist(s) was with the assessee at the end of the previous year, then the provision of Section 50 (2) would not apply. The Section creates a deeming fiction. It cannot be extended beyond the purpose for which it has been enacted. - Decided against revenue. Depreciation claim rejected - After Sales, assessee was only left with 30% of the plant and machinery therefore, the assessee’s claim of depreciation of ₹ 3,11,660/- disallowed by AO - CIT(A) allowed the claim - Held that:- No reason to interfere with the order of CIT(A). Firstly, because the block of plant and machinery continued to exist and the manufacturing activities had temporarily been suspended and the business was not closed down. Secondly, the machinery was kept ready for future use and, therefore, the assessee’s claim was rightly allowed by ld. CIT(A). See Capital Bus Service (P) Ltd. v. CIT [1980 (2) TMI 69 - DELHI High Court] - - Decided against revenue. Sales service charges disallowed - CIT(A) sustained the part addition - Held that:- reason to interfere with the order of ld. CIT(A) because the AO has not disputed the rendering of after sales service by assessee. His only objection was that assessee was not bearing the entire cost of rendering after sales service and same ought to have been met partly by other distributors. We find that ld. CIT(A) has rightly restricted the disallowance only relating to non-franchise. We accordingly, confirm the order of ld. CIT(A) on the issue in question. - Decided against revenue. Sales service charges - Non apportionment of transactions of the assessee with its sister concerns - Held that:- Findings of ld. CIT(A) regarding allocable expenses to sister concerns have not been controverted by the department. Therefore, we confirm the order of ld. CIT(A) in restricting the addition on account of administrative expenses to ₹ 98,123/- - Decided against revenue.
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