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2014 (8) TMI 1158 - AT - Income TaxAddition on account of prior period expenses - Held that:- Normally prior period expenses cannot be allowed because the income has to be determined on yearly basis. However, in this case certain income relating to prior period was also offered to tax and even after adjusting the expenses of ₹ 238344/- net amount resulted in income because prior period income was ₹ 618088/-. In such situation we are of the opinion that expenditure has been rightly allowed by the LD. CIT(A). Accordingly we confirm the order of the CIT(A) Addition on account of notional interest on land purchases - CIT-A deleted the addition - Held that:- CIT(A) rightly decided the issue because the Assessing Officer has not shown that any amount was borrowed for purchase of land. Further in case of land there is always gap between the payment and registration of the sale deed and such gap can not lead to the conclusion that the land has not been capitalized. In view of this we confirm the action of the CIT(A). Treating employees contribution towards EPF as income as per provisions of section 2(24)(x) - not allowing deduction of the same as per section 36(1)(va) - CIT-A deleted the addition - Held that:- This issue is squarely covered against the Revenue and in favour of the assessee by the decision in case of CIT V Nuchem Ltd.[2010 (2) TMI 959 - PUNJAB AND HARYANA HIGH COURT] wherein following decision of CIT V. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] it was held that if the payments have been made before the due date of filing of return then such payments have to be allowed. Perusal of the assessment order clearly show that provident fund dues were paid before the due date of filing of return Addition on account of depreciation on electric installation - assessee had claimed depreciation @ 25% in respect of electrical equipments which was reduced to 10% by following earlier assessment year - CIT-A deleted the addition - Held that:- Even on electrical installations depreciation is to be allowed @ 25%. In view of this order which have been followed by the CIT(A), we confirm her order. Addition u/s 40(a)(ia) - Held that:- We are of the opinion that Section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirements of the said provision exist. In that context, in our opinion the decision of the Special Bench of the Tribunal in the case of M/s. Merilyn Shipping & Transports vs. ACIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM), does not lay down correct law. Addition excessive expenses on repair and maintenance by restricting the disallowance of repair and maintenance to 1% of the value of the building as directed by the Tribunal in some earlier year - Held that:- We are not sure under what circumstances 1% repair and maintenance expenses was held to be reasonable by the Tribunal. Normally allowance on account of repair and maintenance is to be examined with reference to each item and the items which are not capital in nature have to be allowed. However, no detail is available in the assessment order with reference to repair and maintenance. There is some force in the submissions the assessee that 1% criteria cannot be followed in the latter year, therefore in the interest of the justice, we set aside the order of the Ld. CIT(A) and restrict he disallowance of repair and maintenance at ₹ 1,50,000/ We have already observed that since the details are not available and this is a small matter and therefore there is no purpose for remitting the same to the file of Assessing Officer and we have preferred to make reasonable disallowance.
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