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2012 (9) TMI 186 - AT - Income TaxDisallowance of expenses under rule 6D - assessee has itself disallowed in the computation of income an amount of Rs. 1,07,863 - Held that:- The claim of the assessee was disregarded by the AO who went on to calculate the disallowance as per provisions of Rule 6D for different units on the basis of per person per trip as decided in CIT Vs Arrow India ltd. [1997 (7) TMI 92 - BOMBAY HIGH COURT] - against assessee. Disallowance of guest house expenses u/s. 37(4) - Held that:- As decided in Britannia Industries Limited Versus Commissioner of Income-Tax And Another [2005 (10) TMI 30 - SUPREME COURT] claim by the assessee as expenses towards rent, repairs, depreciation and maintenance of a guest house need to be disallowed which was purportedly used in connection with the business of the company - against assessee. Non exclusion of interest receivable for A.Y. 1995- 96 u/s. 244A - Held that:- As decided in Commissioner of Income-Tax Versus British Paints India Limited [1990 (12) TMI 2 - SUPREME COURT] there was no justification for the assessee to vary from the regular accounting principle of valuing stock & ITO is justified under s. 145 to reject the books of accounts and determine the correct profits and gains - if any change or reduction in the amount of interest refund to the assessee u/s. 244A, the same has to be taken into account u/s. 154 of the Act - against assessee. Disallowance u/s. 40A(3) - the payments were made to employees to purchase tickets & furniture - Held that:- As the payments for purchase of tickets are concerned, the same is not in violation of section 40A(3) but payments made to buy furniture is in violation of Sec. 40A(3) therefore A.O. is directed to restrict the disallowance to 20% of Rs. 24,000 - partly in favour of assessee. Exclusion from taxable profits the sales tax exemption benefit - Additional ground submitted by assessee - Held that:- Adjudication of the ground will require going into the incentive scheme framed by the U.P. Government which was not available before the lower authorities, the issue is restored to the file of AO for passing a fresh order after necessary examination and after allowing opportunity of hearing to the assessee - in favour of assessee for statistical purposes. Disallowance of expenses - laying transmission line and the construction of access road - Held that:- Respectfully following the finding of the Tribunal given in the immediately preceding assessment year i.e. 1995-96 it is to be hold that the expenditure so claimed are capital in nature accordingly order of the Ld. CIT(A) is set aside and that of the AO is restored - against assessee. Disallowance of period prior interest - Held that:- As the claim of interest paid on borrowed capital as deductible expenditure in the immediately preceding year the expenses for the year under consider also need to be allowed - in favour of assessee.
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