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2015 (10) TMI 2703 - AT - Income TaxEligibility to deduction u/s 80IB - CIT-A allowed the claim considering assessee unit to be Small Scale Industrial Unit by simply relying on the submissions of the assessee and by not giving any independent findings - no consistency in the findings of CIT(A) - Held that:- It is well settled law that provisions of section 250(6) are mandatory and it is obligatory for Commissioner (Appeals) to pass a speaking order stating points raised in appeal, his decision thereon and reasons for such decisions. Hon'ble Bombay High Court Maneklal D. Shah Vs. P.K. Gupta and Others [2002 (2) TMI 15 - BOMBAY High Court] has categorically held that appellate authority is enjoined and it is incumbent upon it to appreciate the evidence consider the reasoning of the primary authority and assign its own reasons as to why it disagrees with the reasons and findings of the primary authority. Unless adequate reasons are given, merely because it is an appellate authority, it cannot brush aside the reasoning or findings recorded by the primary authority. In the instant case, the Ld. CIT(A) has not provided reasons in the impugned order, we left with no other alternative but to set aside the impugned order and remand the matter to CIT(A) with a direction to decide the issue afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee. in the assessment year 2007-08, on similar set of facts, the CIT(A) has confirmed the disallowance under section 80IB amounting to ₹ 26,41,716/- in respect of Noida unit. In the assessment year 2007-08, while deciding a similar issue the CIT(A) has not made any reference to the order passed by his predecessor in assessee’s case for assessment year 2006-07. Thus remand the matter back to the CIT(A) for fresh a decision Disallowance u/s 36(l)(iii) on alleged interest free advances to various party - Held that:- This issue needs to be verified and decided at the level of the Assessing officer. The assessee is free to produce the recent decision of the Hon'ble Punjab & Haryana High Court on this issue. Considering the entire facts and circumstances of the present case, we set aside the order of CIT(A) on this issue and remand the matter to the CIT(A) for a fresh decision in accordance with law. For statistical purposes, this ground of the Cross objection is allowed. Disallowance of prior period expenses - Held that:- As decided in Saurashtra Cement and Chemical Industries Ltd. [1994 (10) TMI 30 - GUJARAT High Court] merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year in question on the basis of maintaining accounts on the mercantile basis. In the instant case, bills were received in this year and, therefore, it can be said that the liability was determined and crystallized in the year in question on the basis of maintaining account on mercantile basis. - Decided in favour of assessee. Disallowance u/s 40(a)(ia) - retrospectivity - Held that:- As in the case of CIT-I Vs. Ansal Land Mark Township (P) Ltd [2015 (9) TMI 79 - DELHI HIGH COURT] wherein held that the second proviso to Section 40 (a) (ia) of the Act is declaratory and curative in nature and should be given retrospective effect from 1st April 2005. Considering the entire facts and circumstances of the present case, we set aside the order of CIT(A) and remand the issue to CIT(A) with a direction to decide the issue afresh keeping in view the above decisions. Disallowance of advisory charges paid - Held that:- Mere claim of the assessee that these expenses were on account of legal expenses for the purpose of business transfer would not justify the claim. As regards the payments made to M/s PKP Consultants and M/s AZB & Partners is concerned, the CIT(A) has categorically observed that the Assessing officer had verified from the above parties. The Ld. CIT(A) has categorically stated that the expenses claimed by the assessee have nothing to do with the transfer of the business of the assessee to his successor company. There is not material on record to controvert the findings of the lower authorities. At this stage also, no material was brought on record to show that these expenses were incurred in connection with transfer of the business of the assessee to the successor company. - Decided against assessee.
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