Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 143 - AT - Income TaxDisallowance of Interest - CIT(A) deleted the addition - assessee filed its return of income in the status of AOP - Held that:- As decided in CIT vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY], if there are mixed fund then presumption should be there that any investment or withdrawal is out of interest free own funds. In the present case, it is seen that on 01/04/2007 there was net credit balance of members of AOP to the extent of ₹ 313.98 lacs and as on 31/03/2008 also, there is net credit balance of all the members taken together to the extent of 366.27 lac. Even the net transaction during the year is also in positive to the extent of ₹ 292.66 lacs. Thus presumption has to be there that even excess withdrawal by some members was out of credit balance of other members in their capital. Under these facts, no disallowance out of interest expenditure is justified. - Decided against revenue. Disallowance of Freight Inward & Outward expenses - CIT(A) restricted addition - Held that:- From the comparative figures of sales and purchase of the present year and preceding year, it is seen that there is decline in both sales and purchases. It is also seen that there is decline in the expenses incurred on account of freight outward but there is increase in the expenses for freight inward to the extent of ₹ 4.17 lac as against ₹ 2.45 lac in the preceding year. The Assessing Officer has noted that the assessee could not explain the increase. These expenses are not supported by proper bills and vouchers also. Thus disallowance made by the Assessing Officer at ₹ 1,00,000/- out of freight inward expenses is reasonable and, therefore, CIT(A) was not justified in reducing the same to ₹ 50,000/-. - Decided in favour of revenue Shop repair & maintenance expense - Held that:- in the absence of any specific finding of the Assessing Officer pointing out some expenses of capital nature or non business nature, such ad hoc disallowance is not justified. The CIT(A) has also upheld the disallowance of ₹ 4,00,000/- merely on the basis that 20 times increase in repair & maintenance is not properly explained by the assessee before the Assessing Officer but we are not satisfied with this logic of CIT(A) because the increase or decrease in repair expenses is not dependent on turnover. For wear and tear in so many years, many a times, repairing takes place in one year and the expenses may be like this i.e. 20 times of the preceding year. In the absence of any specific finding to show that any expenditure was of capital nature or of non business nature, such ad hoc disallowance is not justified. Therefore, we delete the entire disallowance out of shop repair & maintenance expenses. -Decided in favour of assessee.
|