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2017 (1) TMI 884 - AT - Income TaxNature of expenditure - revenue or capital - Held that:- We find that the assessee has carried repair to the existing factory building at Vapi and to strengthen the beam of the existing building. The assessee also carried out repair of boundary walls of factory at Nasik. Once this is repair, the expenditure is Revenue in nature, hence, we agree with the findings of CIT (A) and confirmed the same. Disallowance of expenses relatable to exempt income by the AO by invoking the provisions of Section 14A read with Rule 8D - Held that:- We noticed that the assessee has interest free fund in the balance sheet amounting to ₹ 43.57 crores and investment is amounting to ₹ 25.39 crores. There is presumption that the assessee might have made investment out of its own interest free funds available with him, in case AO is unable to prove nexus. This view of ours is supported by the decision of Hon’ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd. (2014 (8) TMI 119 - BOMBAY HIGH COURT ). Respectfully following the Hon’ble High Court, we confirmed the decision of CIT (A) and this issue of Revenue’s appeal is dismissed. Addition made being work-in-progress - Held that:- AO has made adhoc disallowance of 1% on raw material and CIT (A) deleted the same as there is no evidence. We find no infirmity in the order of CIT (A) and hence deletion is confirmed Addition of foreign travel expenses - Held that:- The argument of the assessee that such foreign travel is to source new suppliers is not maintainable as the majority of purchases shown by the assessee is from Germany, China, UAE, South Korea and the foreign travel expenditures to such places have already been considered and allowed. As the assessee failed to file corroborative evidence to justify that such foreign travel is wholly and exclusively for the purpose of business, the AO disallowed the expenses of ₹ 7,34,610/- with regard to visit of Arbind M. Kapoor to Zurich and Kualalumpur and the visit of Adidtya Kapoor to Zurich and Hongkong. The CIT (A) also confirmed the disallowance of Foreign Travel Expenses exactly on identical reasons. Before us also, assessee could not controvert the finding of CIT(A) or the AO, hence we confirm the disallowance and dismiss this issue of assessee’s appeal.
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