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2019 (5) TMI 348 - HC - Income TaxAddition u/s 40A - payments made to the Employees' Welfare Trust to meet the transportation expense - diversion of funds - HELD THAT:- This issue was dealt in detail by this Court in the assessee's own case in respect of the assessment year 1994-95, in the appeal preferred by the Revenue [2019 (4) TMI 79 - KERALA HIGH COURT] . This Court held that the view taken by the Tribunal, that the assessee had effected the said payment so as to meet the transportation expense of the employees and had the said task not been undertaken by the Employees' Welfare Trust, it would have been the liability of the assessee, by virtue of the service conditions, was correct and sustainable. We answer the position accordingly, in favour of the Assessee and against the Revenue. Dis-allowance of depreciation on the enhanced cost of equipments - foreign exchange rate fluctuations - mandate of Section 43A - increase in liability was artificial and did not represent any actual payment - HELD THAT:- CIT(A) took a stand in favour of the assessee and held that the instance would clearly fall within the ambit of Section 43A and in turn, directed the Assessing Officer to grant the relief, which was sought to be challenged by the Revenue before the Tribunal. It was brought to the notice of this Court that the issue was squarely covered in favour of the assessee, by virtue of the rulings rendered by the Supreme court in Commissioner of Income Tax, Delhi vs. Woodward Governor India P.Ltd [2009 (4) TMI 4 - SUPREME COURT] and Oil and Natural Gas Corporation Ltd, Dehradun, through Managing Director vs. Commissioner of Income Tax, Dehradun. [2010 (3) TMI 81 - SUPREME COURT] . In the light of the dictum laid down by the Apex Court, we held that the challenge raised by the Revenue was devoid of any merit and no substantial question of law was involved. The said finding and reasoning will govern the field in this case as well. Disallowance of interest on borrowed funds - interest free advance to a subsidiary company - HELD THAT:- As per the assessment order, the assessee was having a large extent of income and this being the position, the amount that was lent to the sister concern, being only ₹ 2.43 crores, it was not open for the Revenue to have contended that the amount advanced came from the borrowed funds of the assessee. The analysis done by the Tribunal order reveals that the finding was rendered on the basis of the relevant facts borne out from the materials on record. The said finding on fact does not lead to any question of law, much less any substantial question of law.
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