TMI Blog2015 (6) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... either that the alleged payment is not real or that it is not incurred by the assessee in the character of a trader or that it is not laid out wholly and exclusively for the purpose of the business of the assessee and to disallow it. But it is not the function of the Tribunal to determine the remuneration which in their view should be paid to an employee of the assessee , we are not inclined to interfere with the findings of the CIT(A) who has rightly deleted the addition of excess payment of interest to sister concern amounting to ₹ 13,65,558/-; accordingly, the same is upheld. - Decided in favour of assessee. - IT(SS)A Nos.509, 510, 512, 513 & 514/Ahd/2011, CO Nos.199, 200, 202, 203 & 204/Ahd/2011 - - - Dated:- 30-4-2015 - Shailendra Kumar Yadav, JM And Anil Chaturvedi, AM,JJ. For the Appellant : Smt Sonia Kumar, Sr. DR For the Respondent : Shri Manish J Shah, AR ORDER Per Bench: This bunch of appeals by the Revenue and Crossobjections by the assessee have been filed against the separate orders of learned CIT(A)-II, Ahmedabad for Assessment Years 2003-04, 2004-05, 2006-07, 2007-08 and 2008-09. 2. Before us, at the outset, the ld. Authorized Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this case. The assessee filed certain details in this regard and having considered the same, the Assessing Officer made addition of closing work-inprogress of ₹ 7,62,728/-. 4.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) granted relief to the assessee observing that the assessee is engaged in the business of dyeing and printing of cloth on job work basis for which fabric is supplied by parties and the assessee has been following consistent method of valuation of closing stock wherein it does not value chemicals consumed in respect of fabrics lying on machines at year end whereas Assessing Officer estimated value of such chemicals and colour and made addition on the ground that by not showing closing work-inprogress of such items, the assessee has not shown correct profit in the year under consideration. The Assessing Officer stated that even on concept of matching cost with revenue, the assessee should have valued closing work-in-progress whereas the assessee has mainly contended that at year end it has been valuing stock of colours and chemicals which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly deleted the addition of closing work-inprogress of ₹ 7,62,728/-; accordingly, the same is upheld. 4.3. Similar issue arose in Assessment Years 2004-05, wherein the CIT(A) has granted the relief to the assessee on similar issue by deleting the addition for closing work-inprogress amounting to ₹ 8,37,568/-. Facts being similar, so following the same reasoning as mentioned in the case of Bajaj Fashions Pvt Ltd (supra), this issue in the appeal for Assessment Year 2004-05 is also decided in favour of assessee. 5. Next issue is with regard to addition of excess payment of interest to sister concern. In Assessment Year 2003-04, the Assessing Officer made addition of ₹ 13,65,558/- being excess payment of interest paid to sister concern disallowed u/s 40A(2)(b) of the Act. The Assessing Officer observed that the assessee had taken unsecured loan of ₹ 1,90,00,000/- from Varelli Fabrics Pvt Ltd, on which interest @ 18% amounting to ₹ 36,41,487/- has been paid as against prevailing market rate of 11.25%. Having considered the submission in this regard, the Assessing Officer observed that the rate of interest paid at 18% was in excess of market rate, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed advocates appearing for both the parties and perused the material on record. We have also perused the decision of the Apex Court in the case of Walchand and Co. Private Ltd. (supra), relied on by the learned advocate for the respondent-assessee, wherein it is held that if the Tribunal was satisfied that the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the assessee there was no reason why the full amount expended should not have been allowed. It is open to the Tribunal to come to a conclusion either that the alleged payment is not real or that it is not incurred by the assessee in the character of a trader or that it is not laid out wholly and exclusively for the purpose of the business of the assessee and to disallow it. But it is not the function of the Tribunal to determine the remuneration which in their view should be paid to an employee of the assessee. 11. In view of the above, we are of the considered opinion that the present appeals deserve to be dismissed. Even otherwise, the Tribunal in paragraph No. 6.1 of its order has given cogent and convincing reasons in arriving at the conclusion. We are in complete agreement w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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