TMI Blog2012 (8) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the nature of payments is remitted back to AO for afresh consideration & disallowance to the amount ‘payable’ by the end of previous year need to be warranted & there cannot be a disallowance in the case of amounts already paid by assessee before 31st of March of previous year - in favour of assessee for statistical purposes. Disallowance of foreign exchange fluctuation loss, partial disallowance of foreign travel and sales promotion expenses, disallowance of partners’ remuneration - Held that:- All the grounds involving question of facts are not maintainable as they were not raised by assessee before CIT(A)as the grounds not raised and adjudicated before CIT (A) are not maintainable before Tribunal. - ITA No.1124/Mds./2011 & ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, the assessee had claimed Rs.6,15,360/- as exchange fluctuation related to the payments made by the assessee against purchase of machineries from Singapore. The A.O. observed that the above foreign exchange fluctuation payment related to acquisition of capital asset, which formed part of the cost of acquisition of machineries and could not be claimed as a deduction. Accordingly, he disallowed said sum of Rs.6,15,360/- as well. 5. The assessee had also claimed foreign travel and sale promotion expenses as deductions. The A.O. observed that an element of personal enjoyment cannot be excluded in these items. So, the expenditure claimed by assessee under above heads could not be allowed as expenditure . The A.O. therefore, disallowed 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequential in nature. 11. It is in view of this backdrop that the assessee as well as the Revenue are aggrieved in the order of CIT(A) and therefore these second appeals before us. 12. The grounds raised by the assessee in its appeal relate to the following issues:- i) Partial disallowance of depreciation ii) Disallowance of foreign exchange fluctuation loss iii) Disallowance towards personal expenses iv) Disallowance of partner s remuneration v) Disallowance under section 40(a)(ia) 13. It is the case of the assessee that genuineness and date of purchase was not disputed. Once the machineries are purchased, they form part of the block of asset . Therefore, the claim of depreciation should have been allowed in full. Rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Bench held that the expression payable needs to be literally interpreted and therefore, the disallowance could be made only in respect of the amount payable by assessee at the end of the previous year. There cannot be a disallowance in the case of amounts already paid by assessee before 31st of March of previous year. 17. In view of the above Special Bench decision, the CIT(A) has rightly held that the disallowance under section 40(a)(ia) may be limited to the amount payable on the close of previous year. This is the only issue raised in Revenue s appeal. Therefore, the appeal filed by Revenue is dismissed. 18. Now, in the assessee s appeal, another aspect of disallowance under section 40(a)(ia) has to be considered. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery had been used by the assessee. The discussion in assessment order and date of acquisition of machines is non-speaking. Therefore, this issue is also remitted back to A.O. to work out the period eligible for depreciation. After ascertain the eligible period, the A.O. may allow deprecation either in full or in part, in accordance with law. 22. Regarding grounds raised by assessee as levy of interest under section.234B, 234C, the same are only consequential and no independent adjudication is called for. 23. The remaining grounds raised by assessee in its appeal against disallowance of foreign exchange fluctuation loss, partial disallowance of foreign travel and sales promotion expenses, disallowance of partners remuneration are n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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