TMI Blog2014 (1) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... The decision in Munjal Sales Corporation Versus Commissioner of Income Tax [2008 (2) TMI 19 - Supreme Court] followed - the Assessing Officer to delete the disallowance – Decided in favour of Assessee. Confirmation of depreciation interest on vehicle – Held that:- The terms "owned" "ownership" and "own" are generic terms - The meaning would depend on the context in which the term are used - the assessee has made submission that the cars were purchased in the name of the Director and such cars are utilized for the purposes of its business - the assessee would be entitled for the allowance depreciation as well as interest expenditure if the assessee is able to prove that the vehicles were under the dominion control of the assessee-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground No. 3 and 4 are not pressed by Ld. counsel for the assessee and ground No.5 is consequential. Therefore, grounds No. 3 and 4 are dismissed as not pressed and ground No.5 being consequential in nature and does not require any adjudication. 3. Briefly stated facts are that assessee is a Limited Company is engaged in the business of construction and property developers. The case of assessee was picked up for scrutiny assessment and the assessment u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') was framed vide order dated 26-12-2011 thereby the Assessing Officer (AO) made disallowances u/s. 36(1)(iii) of Rs.1,88,76,020/-, disallowance of depreciation interest on vehicle of Rs.6,47,061/-, disallowance u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contrary, Ld. SR-DR of the Revenue strongly supported the orders of authorities below. He submitted that the disallowance as well as confirmation is justified. He submitted that Assessing Officer has observed that as per assessee's own submission loan and advances of Rs.18,44,12,800/- were given for purchasing of land for future project. He submitted that once the assessee is capitalizing all the expenses indirect expenses including interest in respect of ongoing project. There is no logic in not recognizing the interest cost relating to loan and advance given for purchased of land for future project. He submitted that as per the assessee's own accounting the interest related to such loan and advances which is related to future project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest related to such loan should be capitalized. Ld. CIT(A) confirmed the disallowance on the basis that the AO had given a finding that assessee could not give the fund flow position to establish its claim that advances were given from interest free funds. It did not submit the day-to-day fund flow for which the onus was on it to prove that the expenditure on interest was for the business purposes. The assessee is following the work completion method and capitalizing its interest work-in-progress the project which is completed is recognized for calculation of income and its corresponding cost adjusted against profit. The indirect expenses which includes interest expenses on borrowed funds and also get adjusted as the same were earlier c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is not justified. In view of the fact that assessee has pointed out that it has sufficient interest free fund and this is not contradicted by the authorities below even before the Tribunal no material has been placed on record suggesting that the assessee was not having interest free funds available for such advances. In view of this, and respectfully following judgment of Hon'ble Supreme Court rendered in the case of Munjal sales Corporation (supra) we allow this ground of assessee's appeal and direct the Assessing Officer to delete the disallowance of Rs.92,17,379/-. 7. Next ground is against the confirmation and depreciation interest on vehicle of Rs.6,47,061/-. Ld. AR of the assessee submitted that the disallowance is not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act depreciation is allowable if the machinery is owned wholly and partly by the assessee, however, the Hon'ble Supreme Court has further enlarged this scope of word "own" in its judgment rendered in the case of Mysore Minerals Ltd. (supra), wherein the Hon'ble Apex court has held that the provisions should be so interpreted and the words used therein should be assigned such meaning as would enable the assessee to secure the benefit intended to be given by the Legislature to the assessee. It has been held that the terms "owned" "ownership" and "own" are generic terms. They have wide and also narrow connotation. The meaning would depend on the context in which the term are used. In the present case, the assessee has made submission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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