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2011 (4) TMI 505 - HC - Income TaxAddition - Rent undercharged - The lease agreement produced by the assessee showed that the location of the company was far away from any industrial estate. The AO failed to consider the market rent and did not make a comparison with other instances, for arriving at a notional rent, taking an ad-hoc 10% of the value of rent etc - The findings recorded by the learned Commissioner (A) have not been successfully challenged by the Department - Therefore,addition on account of rent undercharged by the assessee from its sister concern was rightly deleted by the CIT(A) and the Tribunal - It is, as such, upheld. Depreciation - building - Held that the assessee entitled for depreciation for whole year - Doi not find any error in the finding of facts recorded by the learned Commissioner (A) - The ground raised by the Department in this regard in view of the aforesaid first certificate dated 20.9.1995 issued by the Architects of the assessee and the unrebutted material brought on record by the assessee before the authorities, does not have any force. It is, therefore, rejected Depreciation -plant and machinery - Plant and machinery were put to use before 30.9.1995 -no production had actually taken place till 26.9.1995 and that production was yet to commence - there was absence of evidence of installation and use of machinery before 30.9.1995 - The AO thus restricted the claim of the assessee for depreciation @ 25% on the additions of Rs.5,28,39,089/- to 12.5% - Thus, a sum of Rs.66,04,886/- was disallowed out of depreciation claimed on additions to plant and machinery before 30.9.1995. Allowance -Interest - The Tribunal has specifically recorded that the amount was invested by the assessee as share application money with the sister concern, i.e., M/s Mark Exhaust Systems Ltd. and the department had failed to produce any evidence that there was diversion of borrowed funds on which interest had been paid by the assessee - Decided in favour of assessee.
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