TMI Blog2014 (11) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... ces merely on the basis of tax audit report it cannot be accepted that deposits are genuine – the order of the CIT(A) is upheld – Decided against assessee. Claim of revenue expenses disallowed – Held that:- Assessee has not produced any material before A.O. or CIT(A) in support of his claim – assessee submitted that it had already made the disallowance - Since the submission has not been examined by AO, this factual aspect needs re-examination – thus, the matter is remitted back to the AO for ascertaining the factual position – Decided in favour of assessee. Claim of claims, rebate & reversal of claim disallowed – Claim of writing off disallowed – Held that:- AO while disallowing the claim has noted that assessee has failed to submit any details or justification about expenditure - CIT(A) has also noted that no details were submitted and whether amounts were ever offered as income or not – since the submission related to the precedence was not made before lower authorities by the assessee, the issue needs re-examination – thus, the matter is remitted back to the AO – Decided in favour of assessee. Disallowance out of interest expenses – Held that:- Assessee contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 of the Act. Since the appellant has furnished full details of the said loans (including with Name Address PAN) in the 3CD report, no additions as income is to be made and therefore the learned AO should be directed to not to make the additions u/s.68 of the Act. 4. That the learned CIT(A) has erred in law and facts by confirming the disallowance of claim of revenue expenses of ₹ 3,10,49,616/-, Since the appellant has incurred the expenses and the accounts are audited and expenditure is in the nature of revenue expenditure, the learned AO should be directed to allow the said in full. 5. That the learned CIT(A) has erred in law and facts by confirming the disallowance of the claim of, claims, rebate reversal of claim of ₹ 3,92,66,819/-.The claim, rebate reversal claim is correct, as these are not recoverable and therefore the learned AO should be directed to allow the said claim in full. 6. That the learned CIT(A) has erred in law and facts by confirming the disallowance of the claim of, writing off of the amount of ₹ 64,504/-.As the amount is for the business and as these are not recoverable and therefore the learned AO should be directed to all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts and in view of the fact that there is nothing to show as to how manufacturing expenses have increased to the extent, I find no reason to interfere with the finding of the Assessing Officer. 8. Aggrieved by the order of CIT(A), the assessee is now in appeal before us. Before us, ld. A.R. submitted that since the accounts are audited and in the absence of any evidence about suppression of profit, the loss should not have been rejected. He, therefore, submitted that the loss be allowed. Ld. D.R., on the other hand, pointed to the fact that before the A.O., the assessee did not place any material in support of its contention, further even before CIT(A), no material has been placed by assessee to support the justification of loss. In view of the aforesaid facts, the A.O. was fully justified in disallowing loss. 9. We have heard the rival submissions and perused the material on record. We find that A.O. has noted that assessee was asked to justify the claim of loss, which assessee had failed to do. Further, assessee did not produce the books of accounts for examination by A.O. We also find that even before CIT(A) no material has been placed on record by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been placed by assessee about the deferred payments. In view of the aforesaid facts, the A.O. was fully justified in confirming the addition. 14. We have heard the rival submissions and perused the material on record. We find that before A.O. and CIT(A), assessee did not furnish any details about deferred payment credits. We further find that CIT(A) while confirming the addition has noted that even in audit report of the assessee no details about the borrowings have been mentioned. Before us, also assessee has not placed any details of the deferred payment credits nor has placed any material on record to controvert the finding of CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A). Thus, this ground of assessee is dismissed. 15. Fourth ground of appeal is with respect to the disallowance of claim of revenue expenses of ₹ 3,10,49,616/- as revenue expenditure. 16. The A.O. noticed that assessee has claimed deferred revenue expenses of ₹ 3,10,49,616/- as revenue expenditure. The assessee was asked to explain the nature of the same. The A.O. noted that assessee neither submitted the substantiating evidences nor submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance of claim of claims, rebate reversal of claim of ₹ 3,92,66,819/-. 21. During the course of assessment proceeding, A.O. observed that assessee has claimed ₹ 3,92,66,819/- as claims, rebate reversal of claims. The assessee was asked to submit the detailed break up and justify the allowability. A.O. noted that assessee has failed to submit any explanation or justification for the allowability and only submitted break up. The A.O. also noted that similar claims made by the assessee were rejected in A.Y. 2001-02. In absence of any details or evidence in support of claim of expenses, the claim of assessee was rejected. 22. Aggrieved by the order of A.O., the assessee carried the matter before the CIT(A). CIT(A) upheld the action of A.O. by holding as under: 7.2 It is to be pointed out that though the assessee has stated that details submitted in Annexures but no details were actually submitted. As discussed earlier in this order, it is also noted that even before the Assessing Officer the amount was mentioned but how and why these amounts in respect of very well-known companies were written off as reversal of claims is best known to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter before the CIT(A). CIT(A) upheld the order of A.O. by holding as under: 8.2 I may point out that despite several opportunities no details were furnished even at the time of appellate proceedings. Therefore, the claim has been rightly disallowed by the Assessing Officer. 28. Aggrieved by the order of CIT(A), the assessee is now in appeal before us. Before us, ld. A.R. reiterated the submission made before the CIT(A). He further submitted that the issue is covered in assessee's favour by the decision of Apex Court in the case of TRF Ltd. (supra). On the other hand, ld. D.R. submitted that in the absence of any details, A.O. was justified in disallowing the claim of assessee. 29. We have heard the rival submissions and perused the material on record. We find that A.O. while disallowing the claim has noted that assessee has failed to submit any details or justification about expenditure. We also find that CIT(A) has also noted that no details were submitted and whether amounts were ever offered as income or not. Before us, it is submitted that the issue is covered by the decision of Hon'ble Apex Court in the case of TRF Ltd. (supra). Since the aforesaid submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that assessee had not diverted interest bearing funds to acquire the shares of subsidiaries and the investments were made out of own funds and not borrowed funds. Ld. D.R., on the other hand, supported the order of A.O. and further submitted that as per provisions of Section 14A, the expenditure incurred for earning exempt income has to be disallowed. He further submitted that Bombay High Court in case of Godrej Boyce vs. DCIT 328 ITR 81 (Bom) has held that though Rule 8D is applicable from 2008-09 but prior to A.Y. 2008-09, reasonable expenditure needs to be disallowed. 34. We have heard the rival submissions and perused the material on record. Before us, ld. A.R. has submitted that the investments were made out of interest free funds and not borrowed funds and on the other hand, we find that CIT(A) has given finding that assessee does not have any surplus funds. In view of the contrary facts, we are of the view that the factual position needs to be re-examined. We, therefore, remit the matter to the file of A.O. to verify the factual position and more so about the availability of free funds at the time of making investments and thereafter decide the matter in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile deciding the issue in AY 1995-96 A.O had made inquiries and due to non-existence of plant and machinery the A.O had disallowed the depreciation on the said plant and machinery and also disallowed the payment of hire charges as being non genuine. For similar reasons and following the earlier years order, the AO in the present year disallowed the payment. 42. Aggrieved by the order of AO, the assessee preferred appeal before CIT(A). CIT(A) held that the facts in the current year are identical to that of AY 1999-2000, He therefore following the order of AY 1999-2000 confirmed the order of AO. Aggrieved by the order of CIT(A) the assessee is now in appeal before us. 43. Before us, the Ld. A.R. submitted that the disallowance similar to the present disallowance was made by the AO in AY 1999-2000 against which the Assessee had preferred appeal before Hon'ble ITAT. Hon'ble ITAT vide order dated 9th Oct. 2006 (ITA No 3763/Ahd/2002) had remitted back the matter to the file of AO to decide the matter on the basis of reference petition filed in High Court. He placed on page 30 of the paper book the order of Hon'ble Tribunal. He therefore urged that since the matter in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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