TMI Blog2012 (10) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... le expenses. Decided in favour of assessee Additions in respect of building maintenance charges, water and electricity charges – These expenses were paid by the assessee in respect of flats held as stock in trade – AO made addition that these are to be set off against the income from house property – Held that:- As ITAT has allowed similar expenditure which is referred to by CIT(A) in his earlier case . Therefore, respectfully following the same. Decided in favour of assessee Share Registrar Expenses, capital or revenue in nature – These are the routine recurring professional and services charges for maintenance of secretarial records, redressal of investors grievance, postage & communication charges . There is no issue of capital during the year by the company and hence there is no reason for treating the expenses as capital expenditure. These expenses incurred are recurring revenue expenses for the purpose of business; there allowability has also been recognized by CBDT. Decided in favour of assessee Disallowance of interest expenditure on ad-hoc basis – The AO has not disputed the fact that expenditure incurred was for the purpose of business. He has disallowed 40% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of assessment proceedings, the appellant had furnished before the assessing officer complete detail of sales along with copy of bank statements and other documentary evidences. There is no dispute about the cost of flats sold which were out of opening stock. The appellant had submitted before the AO that due to depressed market conditions at that time, it had suffered losses. Such submission of the appellant has not been rebutted by Assessing Officer . In fact, during the immediately preceding year i.e. A.Y. 2002-03, under similar circumstances the appellant had suffered loss of Rs. 3,78,44,403/- which was allowed in the assessment made u/s 143(3). The rate at which sales have been made during the year are either the same as in A./Y. 2002-03 or more than that. The Assessing Officer has not brought on record any evidence to suggest that sale price realized by the appellant was more than what has been disclosed by it. In the absence of any evidence, the disallowance of loss made by Assessing Officer cannot be sustained. With regard to the remarks of the Assessing Officer that the assessee is not following percentage completion method , in my considered opinion, this is no ground/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were duly allowed in the assessment made u/s 143(3). There appears to be no reason/ logic for sustaining the disallowance made by the A.O. It is not the case of A.O. that expenditure incurred is not for the purpose of business or that it is capital expenditure or personal expenditure. In view of the facts of the case and the Hon ble Supreme Court judgment in the case of India Cements Ltd. Vs. CIT (1966) 60 ITR 52, the disallowance made by the A.O. is deleted. This ground of appeal is allowed. 3.4. It is pleaded that the expenditure incurred being for rollover charges for reissue of loans at cost effective terms , the same was incurred during the course of assessee s business and was allowable deduction. 3.5. Apropos (iii) (iv) additions i.e. in respect of on a/c of building maintenance charges water and electricity charges, the same were paid by the assessee in respect of flats held as stock in trade. In A.Y. 2002-03 the same was allowed by the ITAT. CIT(A) deleted the same by following observations: I have considered the submissions of the appellant, the findings of the AO and the facts on record. The A.O. has disallowed the expenditure of Rs. 19,79,850/- and Rs. 6,64, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in my considered opinion the disallowance of Rs. 361180/- of Share Registrar Expenses made by the Assessing Officer is not sustainable in law and hence the same is deleted. The ground of appeal is allowed. 3.7. Apropos (vi) issue i.e. addition of Rs. 81,65,658/- on a/c of interest payment, Assessing Officer disallowed ad hoc 40% thereof on the ground that necessary details were not furnished. In appeal CIT(A) deleted the addition, inter alia, observing as under: The above proviso has come into effect by Finance Act 2003 w.e.f. 01-04-2004 i.e. A.Y. 2004-05. Prior to assessment year 2004-05 the only requirement for claim of interest was that it should be incurred for the purpose of business. From the reading of aforesaid section it is clear that even from A.Y. 2004-05 interest on capital borrowed can be treat ed as of Capital nature if it is for acquisition of an asset for extension of existing business and interest is for the period upto the date on which such asset was first p0ut to use. In the case of appellant, during the year there is only a small addition of Rs. 33040/- in the fixed assets. The Assessing Officer has not disputed the fact that expenditure incurred wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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