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TMI Blog2014 (4) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... of AO in disallowing Rs.5,38,121/-, being weight shortage expenses. Both the lower authorities erred in ignoring the evidences produced by the appellant in the form of correspondences with the parties and debit notes issued by the parties. Ld.CIT(A) ought to have deleted the disallowance. 2. Learned CIT(A) has erred in law and in facts confirming action of AO of disallowing expenses on adhoc basis of Rs.48,748/- by invoking provisions of section 14A of the Act. Both lower authorities erred in ignoring the fact that the appellant had sufficient own funds to invest in tax free dividend earning investment. Further there was no expense which can be directly or indirectly attributable to such investment. Ld. CIT(A) ought to have deleted the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee submitted that the authorities below were not justified in disallowing the genuine expenses. 3.1. The ld.Sr.DR submitted that the assessee has been engaged in this line of business for many years and the assessee has never claimed this kind of expenses in earlier years. He further submitted that the assessee has not given any evidence in support of its claim that there was loss of weight. 3.2. In rejoinder, the ld.counsel for the assessee submitted that the evidences were placed on record; namely, the ledger account of weight shortage expenses, the debit notes raised by the concerned parties. The ld.counsel for the assessee submitted that merely because the assessee has claimed this kind of expenditure for the first ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, ld.DR supported the order of the authorities below and submitted that as per the decision of Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg.Co.Ltd.(supra), disallowance of interest and other expenses relatable to exempt income are to be disallowed. 7. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the Coordinate Bench in the case of ACIT vs. Torrent Pharmaceuticals Ltd.(supra), decided the issue by observing as under:- "16. We have heard the rival submissions, perused the material available on record. We find that Ld. CIT(A) has given a categorical finding in para-6.3 of his order, same is reproduced hereinbelow:- "6.3 I hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administrative expenses. This ground of assessee's appeal is allowed." 8. Respectfully following the aforesaid decision of Hon'ble Coordinate Bench as well as the decision of Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg.Co.Ltd. vs. Dy.CIT reported at (2010) 328 ITR 81 (Bom.), we hereby direct the AO to delete the addition. Therefore, this ground of assessee's appeal is allowed. 9. Ground No.3 is against levy of interest u/s.234A, 234B, 234C & 234D of the Act being consequential in nature. 10. Ground No.4 is against initiation of penalty proceedings u/s.271(1)(c) being pre-mature and, therefore, the same is rejected. 11. In the result, the appeal of the assessee is partly allowed. Order pronounced in Court on the date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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