TMI Blog2012 (11) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and machinery – claim of assessee allowed Disallowance of payment made to Sabarmati Gaushala for purchase of Semen doses – alleged that the assessee could not prove any business connection in incurring this expenditure – Held that:- Appellant has incurred legitimate expense towards purchase of semen doses, which is veterinary item. These semen is injected to get the best quality of breed of milk bearing cattle - expenditure incurred has direct nexus with the objectives of the appellant society – in favor of assessee Disallowance of legal expenses – alleged that assessee could not file confirmation letter and also the basis for charging such a high amount – Held that:- Claim of Rs.24.50 lakhs pertaining to legal expenses was disallowed, the disallowance of Rs.19.50 lakhs has led to double addition which is not permissible under the Act. The Ld. CIT (A) was convinced with the submissions of the assessee and accordingly deleted addition of Rs.19,50,000/-, as it has led to double addition of the same amount - DR, however, submitted that the said claim of double addition needs verification - matter set aside to the AO for verification Disallowance of consultancy expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GP rate difference. The said addition was deleted by Ld CIT(A) and hence the revenue is in appeal before us. We have heard both the parties on this issue and carefully perused the record and the order of Ld CIT(A). We notice that the Ld CIT(A) has considered this issue in detail and has taken a just view of the matter. For the sake of convenience, we extract below the relevant observations made by Ld CIT(A) in his order relating to assessment year 2003-04: I have considered the submissions of the appellant as well as observation of the AO in the remand report as well as in the assessment order. The appellant, in its detailed statement of facts has controverted each and every observation of the AO in the assessment order. Along with the statement of fact, the appellant has enclosed pieces of evidences on which it has relied upon. The evidences enclosed include comparative trading results, copy of relevant resolutions, price list of variety of milk published by GCMMF, abstracts of quantitative records, detailed written submissions filed before the AO, analysis of comparative prices of milk, annual report of the appellant, copy of Bye laws, etc. in support of the contentions ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross profit. Further, as pointed out by Ld CIT(A), the AO has reached the conclusions without taking into account the quantity details furnished by the assessee along with the Tax audit report. There cannot be any dispute that the book results can be rejected only if it is shown that the books maintained by the assessee are not reliable for deducing correct income. In the instant cases, the AO has not given any such finding. In view of the above, we do not find any infirmity in the decision of Ld. CIT (A) in deleting the impugned addition in both the years. 3.2 The next common issue relates to the taxability of Sales tax subsidy received by the assessee. The said subsidy has been received from the Government for expansion of running business. The assessee treated it as Capital subsidy , where as the AO considered it as Revenue subsidy . The Ld CIT(A) accepted the claim of the assessee and hence the revenue is in appeal before us. It was brought to our notice that an identical issue was considered by this Bench of Tribunal in assessee s own case in ITA No.1223 1349/AHD/2006 order dated 11-09-2009, wherein the Tribunal has accepted the contentions of the assessee. For the sak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered an identical issue in the assessee s own case in ITA No.1349/AHD/2006 relating to the Assessment Year 2002-03, wherein the Tribunal has upheld the decision of Ld. CIT (A) in deleting the addition. For the sake of convenience we extract below the operative portion of the order of the Tribunal . 26. After hearing both the parties and on perusal of the record, we find that clause 18 of section 3 of the bye-laws of the assessee society does not empower the assessee society to carry out its objective in collaboration with any other entity, institution or persons. The assessee has placed on record a copy of the relevant resolutions passed at the meetings of the managing committee of the assessee society resolving collaboration with Vasundhara Research and Development Mandal and Dr. Manibhai Desai Technology Transfer Centre. From the above said resolution and copies of memorandum it can be seen that these are merely extension of the activity of the assessee society and the collaboration made by the assessee is not ultra vires. Can co-ordinate and undertake any of the activities which are connected with carrying out the objects of the assessee society. The assessee has supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not file confirmation letter and also the basis for charging such a high amount. Before the Ld CIT(A), the assessee submitted that legal expenses of Rs.24,50,000/- already includes the amount of Rs.19,50,000/- paid to Chirayu Consultancy. Accordingly, the assessee submitted that, since the claim of Rs.24.50 lakhs pertaining to legal expenses was disallowed, the disallowance of Rs.19.50 lakhs has led to double addition which is not permissible under the Act. The Ld. CIT (A) was convinced with the submissions of the assessee and accordingly deleted addition of Rs.19,50,000/-, as it has led to double addition of the same amount. The Ld. DR, however, submitted that the said claim of double addition needs verification. Accordingly he pleaded that the matter may be set aside to the AO for verification. We find merit in the contention of the Ld. DR. Accordingly we set aside the order of the Ld. CIT (A) on this issue and restore the same to the file of AO with a direction to verify the claim of double addition and take appropriate decision. 5.4 The last issue pertains to disallowance of interest paid to NDDB. The Ld. AR submitted that tribunal has considered an identical issue in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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