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2015 (9) TMI 1361 - HC - Income TaxAddition u/s 36 (1)(iii) - ITAT upholding the decision of Ld. CIT(A) deleting the addition - whether the assessee company has debited huge amount to profit and loss account on account of interest expenditure? - Held that:- Similar addition had been made in appellant's case during the assessment years 2005-06 and 2006-07 and the addition was deleted by CIT(A) following the decision of the Hon'ble Supreme Court in the case S.A. Builders Ltd. Vs. Commissioner of Income Tax [2006 (12) TMI 82 - SUPREME COURT]. The order of the CIT(A) has been upheld by the Hon'ble ITAT for both the assessment years. The Tribunal had affirmed the aforesaid deletion. It was not shown that the findings in the case of the assessee on the basis of which the matter had been decided in its favour has been displaced by any higher court. - Decided against revenue. Disallowance made under Section 40A(2)(b) - ITAT deleted the addition - Held that:- the method adopted by the A.O. for comparing the rates of purchases made from the sister concerns is not correct method. In view of the fact that there are fluctuations in price of waste on day to day basis, the correct method is to compare the rates of purchases made by the appellant from sister concerns at a particular point of time by comparing the same with the rates given for the similar goods to other outside parties at the same point of time. As mentioned above the relevant details were duly produced at the time of assessment proceedings but the AO chose to ignore the evidence. As submitted by the appellant, date wise and item wise detail of material purchased from related concern and outside independent parties in the month of November 2006, January 2007, February 2007 and March 2007 payment made to M/s Malwa Cotton Spinning Mills for purchase of Comber Waste and Flat Waste was neither excessive nor unreasonable. Keeping in view the above position, the addition made by the Ld. AO on this account is deleted - Decided against revenue. Disallowance of bank charges amounting - ITAT deleted the addition - Held that:- These expenses have been incurred by the appellant on account of processing fees paid by the appellant to bank to process the working capital facility to meet day to day requirement of funds which is recurring in nature. Further as clarified in the written submissions the fund based and non fund based working capital facilities sanctioned by the banks had been utilized by the appellant to meet the day-to-day requirement of funds for business. The working capital facilities are generally for a period of one year and such charges are levied by the bank every year. As pointed out by the AR of the appellant, it is seen that similar addition had been made during the Asstt. Years 2005-06 and 2006-07 and the addition was deleted by CIT(A). The order of the CIT(A) has been upheld by the Hon'ble ITAT for both the Asstt. Years. The Tribunal had affirmed the said deletion. Again, learned counsel for the revenue was not able to displace the reasoning and the findings of fact recorded by the CIT(A) and the Tribunal so as to raise any law point.- Decided against revenue. Disallowance of expenses incurred on account of building repair and maintenance - ITAT deleted the addition - Held that:- The Tribunal also recorded that the genuineness of the expenses. The said expenses were incurred for maintenance of road and boundary wall as the factory building of the assessee was already in existence and had started its manufacturing activities in the financial year 1997-98. Keeping in view the quantum of expenditure, it was held to be revenue in nature. The CIT(A) and the Tribunal had rightly decided the issue which does not involve interpretation of any provisions of law.- Decided against revenue.
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