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2011 (2) TMI 10 - AT - Income TaxDepreciation on idle assets - CIT (A) has rightly allowed the depreciation on the assets as it is not in dispute that the assets were deployed by the assessee at the site of the customer to meet warranty obligation in respect of contracts executed by it in earlier years. - The assets formed block of assets and depreciaion has been allowed in immediately preceeding year as well as in subsequent years in that view also depreciation was rightly held allowable by CIT(A) Expenditure related to capital assets - The assessee had not capitalized the machine as fixed assets. Even vide notes to the accounts and statutory disclosure under the Companies Act the asses did not have any commitment on capital account for the year and it the immediately preceding yea, therefore, it is somewhat of a presumption of the A.O. that the machine was imported only for own use and on capital account - Expenditure allowable u/s. 37 of the I.T. Act. Commission paid to agents - The payment being made in the normal course of business’ and after proper authorization by officers of company and when the accounts of assessee company being approved by the Board of Directors and shareholders under the companies Act there should generally be no reason to doubt the appellant. - expenditure allowed Accrued interest on FD - Interest accrued to appellant on release of earnest money has been properly accounted for from year to year and income accruing has been disclosed by appellant in earlier years, previous year and subsequent war as per the method of accounting regularly followed by the appellant Therefore, the A.O. was not justified to disturb the accounting method Furthermore it was also claimed that there is mistake in amount calculated by the A.O. Disallowance u/s 14A for earning exempt dividend income should he restricted to 1% of dividend income.
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