TMI Blog2015 (5) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A).- Decided in favour of assessee. Disallowance of sales tax paid - CIT(A) deleted the disallowance - Held that:- The deposit of the sales-tax was on account of non-submission of form C and VAT D1 and, therefore, this could not be held to be penal in nature. We concur with the finding of ld. CIT(A). - Decided in favour of assessee. Disallowance of Fine and Penalty - CIT(A) deleted the disallowance - Held that:- AO has arbitrarily treated the above amount similar going by nomenclature of the head as fine & penalty and has disallowed the entire amount without looking into the details submitted by the assessee vide letter dated 26.11.2010 wherein the assessee has pointed out that the account constitutes sales Tax paid for Manesar pertaining to Financial Year 2003-2004 attributed to the Sales Tax payment raised on for non collection of Form -C, VA T C-4 etc. and the same be read as part of the explanation given in Grounds of Appeal No.4 above prayed to be deleted. Balance amount represents interest on supplementary bills on Excise Duty raised to its customer for unit 11/ Manesar plant. The amount was wrongly included under the head fine & penalty but should be a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012 - AY 2008-09): 4. Following grounds are raised: 1. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of ₹ 44,325/- made by the AO on account of depreciation on computer accessories. 2. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of ₹ 2,36,797/- made by the AO on account of Excise Duty Sales tax loss. 3. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of ₹ 9,78,958/- made by the AO on account of sales tax paid. 4. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of ₹ 1,69,9151- made by the AO on account of Fine and Penalty. 5. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of ₹ 5,00,0001- made by the AO out of expenses. 6. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 5. Brief facts apropos ground no. 1 are that assessee had made purchases of computer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry in nature and not penal in nature. It is a commercial expediency to sell goods to registered dealer against Form-C. Further it is also seen that out of the total turnover of ₹ 239 crores it is hardly 0.04% of the turnover that the appellant has not been able to procure 'C' Forms and hence paid ₹ 91781958 extra to Sales tax deptt. Therefore, considering the nature and also the commercial expediency the same, I hold that it is not penal in nature but represents the difference of Sales Tax payable for non submission of Form 'C' and VAT D1. Accordingly, I hold that above disallowance is deleted and the appellant gets a relief of ₹ 9,78,958. 7.2. Nothing has been brought on record to controvert the findings of ld. CIT(A). The deposit of the sales-tax was on account of non-submission of form C and VAT D1 and, therefore, this could not be held to be penal in nature. We concur with the finding of ld. CIT(A). Ground is dismissed. 8. Apropos ground no. 4 the AO observed that assessee had debited in its P L A/c of ₹ 1,69,915/- under the head fine and penalty . The AO disallowed the assessee s claim observing that demands had been raised on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62122 26257384 Freight Octroi Cartage 9861889 37876169 Packing Expenses 200550 1457710 STP Running Expenses 2787637 3846815 Payment to general staff 25058609 41457388 Travelling and conveyance 7075350 16420444 Rent 120000 8867968 House keeping expenses 1873760 3791420 Security Expenses 4299430 7385874 9.1. The assessee had furnished details of these expenses and also submitted voluminous explanation, after considering which, the AO disallowed ₹ 5 lacs, inter alia, observing that major expenses under the head job fabrication charges and general expenses had been made to related parties which had not been justified. 9.2. In appeal, the ld. CIT(A) deleted the disallowance observing in para 16 as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the average total asset figure. He, accordingly, directed the AO to recomputed the income. 11.3. Ld. counsel for the assessee submitted that no dividend was received by assessee during the year and no investment was made during the year. Ld. counsel referred to paper book which has been filed before us for the first time under Rule 29. He submitted that these documents are necessary for verification of assessee s claim. He referred to pages 18 to 35 of the PB, wherein CIT(A) s order for AY 2009-10 is contained in which various issues have been considered having regard to the decisions of Hon ble Delhi High Court in the case of CIT Vs. Relexo Footwears Ltd. 293 ITR 231; and Jay Engineering Works Ltd. Vs. CIT 311 ITR 405, he submitted that AO has to take into consideration that the investment made in AY 2008-09 did not yield exempt income. 11.4. We have considered the submission of both the parties. The main thrust of the assessee s submission is with regard to the computation of correct disallowance and, therefore, we admit the paper book filed by assessee and restore the matter to the file of AO for de novo adjudication in accordance with law. Revenue s appeal (ITA no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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