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2018 (12) TMI 62 - AT - Income TaxDisallowance of interest - assessee claimed net deduction on account of interest - Held that:- The Hon’ble Punjab & Haryana High Court in CIT Vs. Bhupindra Flour Mills (P) Ltd. (2012 (6) TMI 288 - PUNJAB AND HARYANA HIGH COURT) has held that an amount spent by the assessee on demolition of structure which had caught fire and major repair of the premises during the period when the business was in existence, is admissible as a revenue expenditure. In view of the above legal position, we are satisfied that the CIT(A) was justified in deleting the addition made by the AO by disallowing the net interest paid. - Decided in favour of assessee Addition of insurance claim received - nature of income - Held that:- The Mumbai Bench of the Tribunal in J.R. Enterprises (2008 (6) TMI 604 - ITAT MUMBAI) has held that the provisions of section 45(1A) of the Act are inapplicable because of the receipt of insurance claim of ₹ 1.57 crore against the actual expenditure incurred of ₹ 3.82 crore. The Chennai Bench of the Tribunal in Chemfab Alkalis Ltd. (2012 (8) TMI 1142 - ITAT CHENNAI) also considered a similar situation in which the amount of insurance claim was less than the amount of actual expenditure incurred on reconstruction/ renovation and it was held that no short term capital gain u/s. 45(1A) of the Act can be charged under such circumstances. Validity of assessment - no notice u/s.143(2) was validly served - Held that:- We are confronted with a situation in which the assessee did raise objection before the AO during the course of assessment proceedings itself that the notice was not properly served upon him. However, the AR of the assessee appearing before the AO, gave his ‘no objection’ for furthering the assessment proceedings. When the second limb of the ld. AR not objecting to the continuation of assessment proceedings despite service of notice on the assessee’s manager is considered in conjunction with the first limb of the assessee initially objecting to the service of notice, the inference which follows is that the assessee did raise objection initially but withdrew the same before the AO. In such a scenario, the initial objection stood withdrawn by the later ‘no objection’ tendered before the completion of the assessment, making it a case of not objecting to the valid service of notice before the AO. Thus, the proviso to section 292BB of the Act, which was triggered by raising an initial objection before the AO, was given a goby and got set to rest by the ld. AR not objecting to such objection in terms of order sheet entry dated 13-08-2012. Once the proviso is held to be inapplicable, the main provision of section 292BB gets magnetized, which deems proper service of notice on the assessee appearing before the AO in the assessment proceedings, thereby debarring it from raising any objection of improper service of notice before any proceedings under the Act, including the Tribunal. Power of attorney - Once an assessee empowers his authorised representative to appear before the AO or for that purpose, any other appellate court in the income tax proceedings and undertakes to ratify his acts, there is no need to ignore any concession made by the ld. Authorised representative and personally call upon the assessee to make concession in every case. The ld. AR could not draw our attention towards any decision under the income-tax proceedings in which the concession given by the ld. AR was successfully challenged by the assessee before the higher court on the ground that such concession by the ld. AR was invalid. In view of the foregoing discussion, we are of the considered opinion that there is no merit in the grounds raised by the assessee in this regard, which are hereby dismissed.
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