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2016 (5) TMI 50 - AT - Income TaxDisallowance u/s 10A - Held that:- The Authorized Representative furnished the comments on remand report vide letter dated 28.05.2010 and he had also furnished calculation of exempted amount and other amount as well. An amount of ₹ 1,75,93,582/- was not received within the period of 6 months as stipulated in the Section. Further ₹ 91,75,435/- on account of sales within zone, sales to EOU and sales 100% export were not received in time. Thus, the total amount of ₹ 2,67,68,997/- was not received by the company within the statutory time limit as prescribed under the Act. Therefore, the deduction claimed by the assessee u/s. 10A of the Act was directed to be revised proportionately. Before the CIT(A), the Authorized Representative of the assessee furnished the working vide letter dated 03.06.2010. As per the said working, on an amount of ₹ 30,05,70,495/-, if the claim amount was ₹ 5,82,65,233/-, then on ₹ 2,67,68,997/- the proportionate disallowance came to ₹ 51,89,138/-. Therefore, the said amount of ₹ 51,89,138/- was directed to be deducted from the total amount of claim of ₹ 5,82,65,233/-. Thus, allowable claim u/s. 10A of the Act was of ₹ 5,30,76,095/-. Therefore, the claim u/s.10A of the assessee-company was rightly allowed to the extent of ₹ 5,30,76,095/- and rest was rightly disallowed by the CIT(A). No interference is called for and we uphold the order of the CIT(A) in this regard.- Decided against revenue. Disallowance of interest expenses - Held that:- We find that that assessee has paid the interest on the borrowed fund and has also advanced loan but did not charge any interest on that because it was the business/commercial necessity to take and give the loan simultaneously for business purpose. As the assessee was having fund more than the amount of advance given without interest, it did not cause any adverse effect on the business prudence. Therefore, the disallowance made by the Assessing Officer was rightly deleted by the CIT(A) and these reasoned findings of the CIT(A) do not require any interference from our side.- Decided against revenue. Disallowance of Miscellaneous Expenses - Held that:- Assessing Officer, without put forth any cogent reasons, has made the ad-hoc disallowance in question. The Assessing Officer has also not recorded any specific reasons or evidences which can be categorized as that of personal nature; therefore, the CIT(A) has rightly directed the Assessing Officer to delete the disallowance in question.- Decided against revenue. Disallowance of depreciation on building - Held that:- CIT(A) allowed the claim on the ground that the assessee was fully eligible for the claim of depreciation as the evidences like deed of conveyance and light bill produced by the assessee signifies that the assessee had infact used the building in the year under consideration. The CIT(A) also observed that the when the building is ready and put to use by the assessee, there is no ground of disallowance. These reasoning findings of the CIT(A) do not require any interference from our side; we uphold the same.- Decided against revenue. Disallowance u/s 41(1) - Held that:- There are two conditions stipulated u/s. 41(1) of the Act which needs to be satisfied before disallowance u/s. 41(1) and therefore in the present case the provisions of the said section are not attracted. Moreover, before the CIT(A), the Authorized Representative for the assessee has produced confirmation of some of the parties in consideration of its claim. Agreeing to the contention of the assessee in this regard, the CIT(A) was justified in deleting the addition in question. For attracting provisions of sec. 41(1) of the Act, the liability of the assessee must have seized and there should not be any possibility of revival in future. The Assessing Officer though has held that sec. 41(1) of the Act was attracted but has failed to state any reasons for the same. Moreover when the confirmations of concerned parties were produced before the CIT(A), he rightly observed that liability is still in existence. Therefore, in view of the facts and circumstances of the case, the CIT(A) was justified in deleting the addition - Decided against revenue. Disallowance of staff welfare expenses, vehicle expenses and travelling expenses - Held that:- CIT(A), having considered the same, held that the assessee had already paid fringe benefit tax on these expenses and they could not be brought to tax once again. Thus, in our opinion, the CIT(A) has rightly deleted the disallowance made by the Assessing Officer on these counts as the assessee had already paid fringe benefit tax on these expenses. These reasoned and factual findings of the CIT(A) need no interference from our side - Decided against revenue.
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