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2015 (10) TMI 2240 - AT - Income TaxDisallowance of interest on borrowed funds u/s 36(1)(iii) - CIT(A) restricted the addition - Held that:- Admittedly, the investments were made by the assessee in the shares of its sister concerns in the earlier years, in which years no disallowance of interest was made. Further, the claim of the assessee before us is that the said investment was made with its sister concerns because it has business dealings with sister concerns and hence, the advances were for commercial exigency. In the totality of the above said facts and circumstances and in the absence of any finding by the Assessing Officer that the interest bearing funds available with the assessee have been utilized for making the aforesaid interest free investments, we find no merit in the disallowance made under section 36(1)(iii) of the Act. In this regard, we place reliance on the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. Reliance Utilities and Power Limited (2009 (1) TMI 4 - HIGH COURT BOMBAY). Accordingly, we set-aside the order of CIT(A) in restricting the disallowance to ₹ 5,89,573/- and direct the Assessing Officer to delete the same - Decided in favour of assessee. Additional depreciation on expenditure on moulds disallowed - Held that:- The additional depreciation on assets is allowable under section 32(1)(iia) of the Act. However, no additional depreciation is allowable as per the proviso to section 32(1)(iia) of the Act, where plant & machinery installed after 31.03.2005, was earlier used either within India or outside India by any other person. Further, additional depreciation is not allowable on any office appliances. The assessee had paid labour charges for the conversion of its old mould into new mould and there was no purchase of new plant & machinery. In the above said facts and circumstances, we find no merit in the claim of the assessee and upholding the order of CIT(A) in disallowing additional depreciation on expenditure of ₹ 68,035/- incurred on account of labour charges in respect of conversion of old mould into new mould - Decided against assessee. Disallowance of sales promotion expenses - Held that:- The claim of the assessee was that the payments were made through ICICI bank credit card. Except filing the statement of payments at pages 72 and 73 of the Paper Book, the assessee has failed to furnish any bills or any details or break-up of the expenditure incurred by the assessee under the head ‘sales promotion expenses’. It is the requirement of law that for allowing any expenditure under section 37(1) of the Act, onus is upon the assessee to establish that the said expenditure has been incurred for carrying on its business. Where the assessee has failed to furnish even basic details of the break-up of expenditure or the nature of expenditure, we find no merit in the claim of the assessee and consequently, the same is rejected. The CIT(A) has already allowed 1/3rd of business expenditure. - Decided against assessee.
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