Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 1328 - AT - Income TaxAdditional disallowance u/s 14A - Held that:- Since then no new investment in shares has been made by the appellant and various loans obtained by the appellant have been utilized for specific purpose of business working capital requirement. We note that Ld. CIT(A) has rightly observed that the assessee’s argument have force and it is undisputed that the AO had determined in AY.2006-07, the loan amount of 857.04 lac utilized for investment in shares out of total borrowings of ₹ 4612.12 lac and same has been followed in AY 2007-08 as the quantum of investment in shares remained unchanged. The facts being the same during the year under consideration and the amount of disallowance has already been disallowed by the appellant under Rule 8D(2)(i) of IT Rules as directly attributable expenditure; there remains no justification for making further disallowance under Rule 8D(2)((ii) of IT Rules. Thus, total disallowance u/s 14A of the Act comes at ₹ 1,11,21,08l/-. Thus, out of total addition on account of disallowance of ₹ 5,35,65,500/- made by the AO uls 14A of the Act, an amount of ₹ 92,88,538/- (Rs. 1,11,21,08l - 18,32,543) only was rightly sustained and the assessee gets the consequential relief, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on the issue in dispute and accordingly, we dismiss the ground nos. 1 & 2 raised by the Revenue. Disallowance of prior period expenses - Held that:- The perusal of the invoice shows that the appellant company purchased the raw material through this invoice which is dated 11.03.2007. The same had been reportedly sent from Kochi (Kerala) to Chennai factory of appellant company. As per the invoice, the said raw material was delivered to the assessee company on 30.04.2007, as certified by the representative of the authorized carrier. This fact has been recorded at part II, S1. No. 43/30/4/07, which has been reflected on the face of the invoice itself. The AO has not given any reason to disbelieve the invoice after acknowledging the same. From the documents, it is clear that the raw material was received during the current year, even if it was bought on 28.03.2007. As the liability got crystallized during the current year, such expenses are very much allowable as held by various courts, relied upon by the assessee in its submissions. Regarding the remaining expenses of prior period viz. Godown Rent, Repair and Maintenance and Freight on Sales, no documentary evidences in support of the claim that the liability got crystallized during the current year have been filed by the assessee and therefore, the AO was justified in disallowing the same. Therefore, the assessee gets a relief of ₹ 12,32,814/- out of total addition of ₹ 51,81,578/-, which does not need any interference on our part, therefore, we uphold the order of the Ld. CIT(A) on the issue in dispute and accordingly, we dismiss the ground no. 3 raised by the Revenue.
|