Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (11) TMI 420 - ITAT, AHMEDABADInterest u/s 36(1)(iii) - disallowance as interest bearing funds have been utilized for making investments - CIT(A) allowed the claim - Held that:- Persuing the P/L A/C of assessee net profit after tax for the year ending 31-3- 2003 is ₹ 488.04 lakhs and the depreciation in that year is of ₹ 150.14 lakhs and hence total generation of own fund in that year is ₹ 638.18 lakhs, whereas investment in shares in that year is only of ₹ 352 lakhs & similarly in the year ending as on 31-3-2004 profit after tax is ₹ 214.25 lakhs and the depreciation in this year is ₹ 195.16 lakhs and hence total generation of funds is ₹ 309.41 lakhs whereas the investment in shares in this year is of only ₹ 55.25 lakhs - it is not justified to make any disallowance of interest claimed by the assessee u/s. 36(1)(iii) in the absence of any direct nexus between the investment in shares and interest bearing borrowed funds - in favour of assessee. Deduction u/s. 80IA - disallowance as undertaking is not a distinct entity with no separate plant and machinery owned by the enterprise having not approved by the Central Government - Held that:- The facts in the year under appeal are identical to that of A.Y. 2004-05 and A.Y. 2005-06, thus following the order of co-ordinate Bench, restore the matter back to the file of A.O. for examining the allowability of deduction u/s. 80IA. The assessee has to furnish the required information called for by the A.O. that enterprise or undertaking is a distinct entity with a separate plant and machinery owned by the enterprise approved by the Central Government/State Government or local authority & maintaining separate books of accounts - in favour of Revenue for statistical purpose. Consumption of closing stock - addition for excise duty debited to P/L A/C - Held that:- No contrary material has been shown proving that any excise duty has been debited in the profit and loss account relating to the finished gods. It is also not shown by the Revenue that cost of finished goods as worked out by the assessee did not contain the element of excise duty paid by it on the raw material consumed in the making of the finished goods. On the other hand, assesse has submitted that excise duty component of raw material has been duly debited to the profit and loss account addition considered in the costing of closing stock. This ground of Revenue is therefore also rejected - in favour of assessee. Disallowance u/s.40A(2)(a) - CIT(A) allowed the claim - Held that:- A.O. has not proved that excessive payment has been made to an associate concern of the assessee. The genuineness of the transactions is not in dispute. The reliance by A.O. on the order of associate concern of the assessee is not proper as that order has been reversed by the CIT (A) and confirmed by the Tribunal. The assessee had provided calculation of fair value of services before the CIT (A) which was sent to the A.O. during remand proceedings. There is no material to justify the disallowance made by the A.O. Further, Tribunal in the case of associate concern of the assessee decided on 30-9-2009 held that there is no excessive payment for services provided to assessee. Thus once factum of excessive payment for services are not proved, there is no case of any addition even in the case of the assessee - in favour of assessee. Software expenses - Revenue v/s capital - Held that:- As assessee has not been able to demonstrate as to how the expenses are of revenue in nature, thus need to be treated as capital - against assessee.
|