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2020 (10) TMI 138 - AT - Income TaxBelated payment of Employee’s contribution to PF - HELD THAT:- This issue is squarely covered in favour of the assessee by the judgment rendered in the case of CIT vs. Sabari Enterprises [2007 (7) TMI 169 - KARNATAKA HIGH COURT] and respectfully following the same, we decline to interfere in the order of CIT (A) on this issue. Disallowance of project expenses capitalised by the AO - HELD THAT:- Issue decided in favour of assessee in own case [2020 (3) TMI 113 - ITAT BANGALORE] as held disallowance made in the assessment order was not warranted, as the expenditure on setting up of new outlets being an expansion of the existing business, is an allowable expense. Interest incurred on borrowed funds on account of Capital Work in Progress - HELD THAT:- As decided in own case as decided in own case [2020 (3) TMI 113 - ITAT BANGALORE] proviso to section 36(1)(iii) inserted by the Finance Act, 2003 w.e.f. 01.04.2004 is very relevant for this issue. As per the same, till the asset for which the loan is borrowed is put to use, interest is not allowable. The judgments cited by the learned AR are for the period before insertion of this proviso and hence, not relevant. Hence, there is no merit in these grounds of the assessee and therefore, rejected. Disallowance of Forex Loss - HELD THAT:- Tribunal [2020 (3) TMI 113 - ITAT BANGALORE] decided similar issue in favour of the assessee by following the judgment of Hon’ble Apex Court rendered in the case of Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] - revenue could not point out any difference in facts in the present year as compared to these two years for which the tribunal order is available. Regarding the applicability of section 43A, we find that this is stated by the AO in the assessment order itself that this section is not applicable - being final fact finding authority, we made efforts to examine the facts and found that although there was import of capital assets in those years when ECB loans were borrowed but there was substantial exports also and the assertion of the assessee is this that such export proceeds were used for import of capital assets and ECB loan was not used for that purpose and the learned DR of the revenue could not bring any evidence on record to show that ECB loans were used for import of capital goods. - Decided in favour of the assessee
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