9911796707
TMI Blog2013 (6) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... ot utilized for the purpose of investments. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of additional depreciation of Rs.39,78,366/- in respect of freight & Other charges without appreciating the fact that in the absence of any supporting documentary evidences, addition to fixed assets cannot be held as machinery or plant related to manufacturing activity, for which the freight and other charges were claimed." 3. The facts concerning ground No. 1 are that the assessee is engaged in the business of manufacturing of tyres. Assessee company invested substantial amount in shares and mutual funds. Further, during the year under consideration, the assessee showed dividend in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment. Since the AO could not prove investment of borrowed funds, provisions of section 14A are not attracted. 4. The learned CIT(A) accepted the plea of the assessee. In this regard he observed, in para 2.3 of his order, as under: - "2.3. I have considered the above submissions as well as the facts of the case. I have also perused the bank documents in regard to the loan/credit facilities given to the appellant in respect of which the interest payments have been claimed in profit and loss account. It is seen that the bank has given the loan/credit facilities for the purpose of working capital and there are sufficient checks and balances including periodical checks so that the appellant will not be able to utilise the borrowed funds f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge the order of the CIT(A) merely on the ground that the assessee has not furnished documentary proof that borrowed funds were not utilised for the purpose of investments. It is not the case of the Revenue that the evidence furnished before the CIT(A) was not put to the AO or the learned CIT(A) has committed an error in admitting such evidence. On the contrary the AO has proceeded on certain assumptions which prompted the assessee to furnish necessary details before the CIT(A) to show that banks loans were obtained only for the purpose of working capital and not for making investments in shares and mutual funds. The learned CIT(A) also perused the bank documents in regard to the loan/credit facilities given to the assessee. Admissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and expenditure incurred on freight charges and other charges, it is for the assessee to furnish the proof to show that the impugned sum of Rs. 3.79 crores is also incurred on installation of plant and machinery as otherwise the assessee cannot be permitted to avail additional depreciation. Accordingly he rejected the claim of additional depreciation. Before the first appellate authority the assessee contended that the AO never called for any details. In fact the AO failed to appreciate that whole of the new plant and machinery was utilised for manufacturing activity and the impugned expenditure is directly connected to the acquisition and installation of machinery. Freight and transportation charges are meant to bring the machinery to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 32(1)(iia), additional depreciation is allowable to an assessee engaged in the business of manufacture or production of any article or thing in respect of the actual cost of any new machinery or plant which has been acquired and installed after 31st day of March 2005. The only exceptions for denial of additional depreciation in regard to new plant and machinery are as per clauses (A) to (D) of the proviso to Sec. 32(1)(iia). Furthermore, the case laws cited by the appellant also lay down that additional depreciation cannot be disallowed if any such plant and machinery has been used for the said purpose. In view of this therefore, the addition made by the Assessing Officer can not be sustained. The same is hereby deleted." 8. Further aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
