9911796707
TMI Blog2014 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for bringing a new asset into existence i.e. the roof of the godown or for improving the existing assets that is godown and further erred in holding that it is capital expenditure and not allowable as deduction on account of repair and maintenance. As a matter of fact and law, the entire expenditure spent by the appellant is on account of Repair and maintenance of non-factory building amounting to Rs. 19,58,785/-and is allowable as a revenue expenditure. Ground No. 2 That the Ld. CIT(A) erred in law and in fact in confirming the disallowing and adding back an amount of Rs. 1,42,97,973/- made by A.O. out of interest account payable to Haryana Govt. u/s 43(B) of the I.Tax Act. That the Ld.CIT(A) admitted that the appellant's case apparently does not fall under any of the clauses mentioned u/s 43(B) of the I.Tax Act. Under the fact and circumstances matter above the amount of Rs. 1,42,97,973/- payable to Haryana Govt. can not be disallowed u/s 43(B) deserve to be deleted. GROUND NO. 3 That the Ld CIT(A) erred in law and in fact in confirming the disallowance and in adding back a sum of Rs. 3,00,000/- made by AO to the income of the appellant wrongly applying provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also disallowed by enhancing the assessment as stated above. Now, the empty handed assessee is before this Tribunal with the grounds as reproduced hereinabove. Ground No.1 7. Apropos ground no.1, we have heard arguments of both the sides and carefully perused the relevant material placed on record. Ld. AR has drawn our attention towards Paper Book page no. 76 to 84 and submitted that the assessee submitted all the details pertaining to the impugned claim made by the assessee towards repair and maintenance but the same was not considered. The AR further contended that the CIT(A) erred in law and on fact in enhancing disallowance made by the A.O. at Rs. 3,32,785/- under the head "Repairs & Maintenance" of non-factory building of the appellant without giving any prior notice to the assessee to that effect on unsustainable and unjustified grounds. The AR also contended that the CIT(A) erred in law and on fact in confirming the disallowance of Rs. 16,26,000/- by holding that the amount has been spent for bringing a new asset into existence i.e. the roof of the godown or for improving the existing assets that is godown and further erred in holding that it is a capital expenditure and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 19,58,735/- shown under the repair and maintenance was actually pertaining to purchase of ACC sheets for making a roof of the godown and the amount has been spent for bringing a new asset into existence i.e. roof of the godown or for improving the existing asset i.e. godown, therefore, the same was expenditure capital in nature which is not allowable as repair and maintenance. From a perusal of the relevant part of the impugned order, we observe that the CIT(A) has not afforded due opportunity of hearing for the assessee prior to enhancing assessment on this issue which is a clear violation of the principles of natural justice and provisions of the Act. 12. In view of foregoing discussion, we are inclined to hold that as per factual matrix as stated by the assessee, there was a substantial damage to the non-factory building i.e. godowns of the assessee which were constructed during earlier financial years and assessee had to incur substantial amount for repair and maintenance of roof of these godowns. Neither the AO nor the CIT(A) have doubted the quantum of the expenditure so incurred by the assessee and the authorities below have also not considered the fact that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, ld. DR supported the orders of the authorities below and submitted that the onus was on the assessee to show that the provisions so made by the assessee do not fall under the provisions of section 43B of the Act and the CIT(A) was right in upholding the addition keeping in view the object of insertion of section 43B of the Act to ensure the return of government dues. 16. At the outset, we find it appropriate to reproduce the relevant provisions of section 43B(d) of the Act which reads as under:- "43B (a) Xxxxxxxx (b) Xxxxxxxxxx (c) Xxxxxxxxxx (d) (d) 5 any sum payable by the assessee as interest on any loan or borrowing from any public financial institution 6 or a State financial corporation or a State industrial investment corporation], in accordance with the terms and conditions of the agreement governing such loan or borrowing,] (e) Xxxxxxxxxxxxx (f) Xxxxxxxxxxxxx shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid the loan installments along with interest during the previous year relevant to the assessment year; rather it has been submitted during appeal proceedings that no installment of loan or interest was paid by the appellant and the entire loan was converted into equity capital of the appellant keeping in view the financial status of the appellant. In view of the aforesaid, keeping the objects/purpose of section 43B of the IT Act the disallowance made by the AO is confirmed and the ground of appeal is dismissed." 18. From the operative part of the impugned order, we clearly observe that the CIT(A) has noted that the assessee's case apparently does not fall under any of the clauses mentioned u/s 43B of the Act which is not a proper and judicious approach. Keeping in view the provisions of section 43B of the Act and proviso attached to that, it is very clear that the main intention of the legislature is that deduction otherwise is allowable under the provisions of the Act in respect of the sum paid and shall be allowed only in computing the income referred to in section 28 of the Act of that previous year in which such the sum was actually paid. But the proviso clarifies that nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
