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2015 (2) TMI 1 - ITAT AHMEDABADAddition on interest receivable from GSI - accrual of interest - appellant had advanced a loan had accrued to appellant this year - Held that:- Going through the orders of authorities below and Co-ordinate ‘D’ Bench decision in assessee’s own case for A.Y. 05-06, facts are similar and matter has been set aside by the Co-ordinate ‘D’ Bench on similar issue to the A.O. for re-examination of explanation given by the appellan. As before us that the interest up to the end of the year has already been provided/accrued in excess, then no interest income is required to be accrued during the year. Accordingly, the matter is set aside to the A.O. on similar directions as given for A.Y. 05-06. - Decided in favour of assessee for statistical purposes. Disallowance of consumption of stores and spares - Held that:- This replacement of stores and spares can be used independently and its of replacement of plant and machinery. As per A.O’s. observation it has endorsing benefit to the assessee. The matter is required to re-examine with reference to addition confirmed by the CIT(A). The A.O. is directed to re-examine the nature of expenditure item-wise and take decisions as per law. - Decided in favour of assessee for statistical purposes. Disallowance of advances - assets leased by the appellant to Western Railway - Held that:- The appellant had 6000 employees. For them, there is a Staff Credit & Consumers Co-operative Society. The appellant had obligation to provide certain facilities to the employees to motivate them as per management principle to get committed services from them. The appellant does not have any hope of recovery of this amount. Therefore, we reverse the order of CIT(A) on this ground. - Decided in favour of assessee. Interest claimed u/s. 36(1)(iii) - diversion of borrowed funds to subsidiary and associate concerns - CIT(A) deleted addition - Held that:- When no interest bearing funds have been diverted to the sister concern by way of interest free advances. The question of going into the commercial expediency of such loans would not arise. In fact, in the light of the findings the question as formulated while admitting the appeals would not arise as on facts there is no diversion of interest bearing funds to interest free advances. Disallowance made under section 36(1)(iii) of the Act correctly deleted.- Decided in favour of assessee. Expenses on protecting the assets of M/s. Gujarat Narmada Auto Ltd. (GNAL), a sister concern of the assessee disallowed - Held that:- The Hon’ble Tribunal in assessee’s own case for A.Y. 03-04 to 05-06 has deleted the disallowance of expenditure on maintenance of assets of GNAL. It is a covered matter by the earlier decision of the Co-ordinate Bench. Facts are identical. Expenses were incurred for business expediency. Thus, we delete the addition and confirm the order of the CIT(A). - Decided in favour of assessee. Deduction by the CIT(A) for Information Technology Related Services paid to M/s. Infinium (India) Ltd. - Held that:- on’ble Tribunal in assessee’s own case in A.Y. 03-04 to 05-06 had deleted the disallowance of expenditure incurred in IT business. After following the Co-ordinate Bench decision for A.Y.05-06 in assessee’s own case. The presumption of the A.O. that these expenses were not recovered from M/s. Infinium (India) Ltd. without any basis. He has not brought on record any contradictory evidence to show that the expenses claimed by the assessee are not genuine. Therefore, we do not find any infirmity in the order of the CIT(A) and confirm the order of CIT(A). - Decided against revenue. Disallowance u/s.14A - CIT(A) deleted the addition - Held that:- was invested out of surplus fund of the part and for it no borrowing had been made during the year the appellant had re-paid the loan on ₹ 95 crore. There is no dividend income during the year from the company. The Hon’ble tribunal in assessee’s own case for A.Y.03-04 to 05-06 had deleted the disallowance u/s.14A. The issue is identical. The appellant had surplus fund no nexus has been established by the A.O. that borrowed fund had been utilized in purchase of shares. After considering the facts and arguments from both the sides, we do not find any infirmity in the order of the CIT(A). - Decided against revenue. Disallowances u/s. (40)(a)(ia) on account of non deduction of TDS on CHA-charges - Held that:- There was no question of deduction tax at source when the payment made by the agent is reimbursed to it. The Circular mentioned by the ld. A.O. is applicable for payment made to principal to principal. The nature of payment is reimbursement of actual expenses incurred by the agent which necessary evidence has been filed before us. The agent had deducted the TDS on these payments and paid to the exchequer within prescribed time. Thus, we do not find any reason to intervene in the order of CIT(A). - Decided against revenue.
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