Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (6) TMI 647 - ITAT AHMEDABAD

2015 (6) TMI 647 - ITAT AHMEDABAD - TMI - Disallowance of interest under Proviso to Sec.36(1)(iii) - CIT(A) deleted addition - Held that:- AO has not brought anything on record to indicate that capital was borrowed for capital work-in-progress. This finding on fact is not rebutted by the Revenue by placing any material on record. Therefore, we do not see any infirmity in the order of the ld.CIT(A), same is hereby upheld. - Decided against revenue.

Disallowance of depreciation - CIT(A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

against revenue.

Disallowances u/s.14A - investment in shares of companies other than 2 foreign subsidiary companies - Held that:- There is no dispute with regard to the fact that the provisions of Rule 8D would be applicable in the year under consideration. The ld.CIT(A) has decided this issue in accordance with Rule 8D of the IT Rules, 1962, therefore we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. - Decided against assessee. - I.T.A. No .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are being disposed of by way of this consolidated order for the sake of convenience. 2. First, we take up the Revenue s appeal in ITA No.540/Ahd/2012 for AY 2009-10. The Revenue has raised the following grounds of appeal:- i) The ld.CIT(A) has erred in law and on facts in deleting the interest of ₹ 3,49,522/- added under the proviso to Section 36(1)(iii) of the I.T.Act. ii) The ld.CIT(A) has erred in law and on facts in deleting the addition on account of depreciation of ₹ 13,56,853 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) was framed vide order dated 24/12/2010, thereby the Assessing Officer (AO in short) made disallowance of interest under Proviso to Sec.36(1)(iii) of the Act amounting to ₹ 3,49,522/-, disallowance by invoking the provisions of section 14A of the Act amounting to ₹ 5,01,209/- and disallowance of excess depreciation amounting to ₹ 13,56,853/-. The AO has also made addition on expenses relatable to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

epreciation. The ld.CIT(A) further reduced the disallowance made by invoking the provisions of section 14A of the Act. The ld.CIT(A) directed the AO to exclude the investments amounting to ₹ 1,23,58,165/- [investment of ₹ 1,22,73,180/- in the shares of ERRE INOX SPA and ₹ 84,985/- in the shares of Stainless Wire Ltd. (WOS) - foreign concerns) and confirmed the disallowance in respect of the investment of ₹ 30,43,125/-. The ld.CIT(A) followed the judgement of the Hon ble S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f interest of ₹ 3,49,522/-. The ld.Sr.DR Shri Nimesh Yadav vehemently argued and submitted that the ld.CIT(A) was not justified in deleting the addition. He strongly supported the order of the AO. 4.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that the company has sufficient interest-free funds of its own in the form of current year cash profit of ₹ 978.52 lacs (Profit After Tax of ₹ 248.25 lacs and Depreciation of ₹ 7 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that for capitalizing interest as per the provisions of proviso to section 36(1)(iii) following conditions should be fulfilled. 1. Capital Borrowed for acquiring capital assets. 2. Interest is paid in respect of capital borrowed. 3. The acquisition of assets should be for the purpose of Expansion of an existing business or profession. 4. Interest Liability may or may not be capitalized. In the instant case, the Ld.A.O. has not brought anything on record to indicate that capital was borrowed for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

8377; 3,49,522 is deleted. This ground of appeal is allowed. 5.1. From the above finding on fact, it revealed that the AO has not brought anything on record to indicate that capital was borrowed for capital work-in-progress. This finding on fact is not rebutted by the Revenue by placing any material on record. Therefore, we do not see any infirmity in the order of the ld.CIT(A), same is hereby upheld. Thus, this ground of Revenue s appeal is rejected. 5.2. Ground No.2 of Revenue s appeal is agai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

orders of the authorities below. We find that the ld.CIT(A) has recorded his finding in paras-5.2 & 5.3 which read as under:- 5.2 I have considered the rival submissions. It is seen that this issue has been decided in favour of the appellant in the earlier years. I the A.Y. 2008-09 my predecessor had allowed the appeal of the appellant on this issue. For the sake of brevity, the concluding para is reproduced as under: I have considered the submissions made by the A.R. of the appellant and t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ound of appeal is allowed. 5.3. Since the facts are identical in this year as it was in the A.Y. 2008-09, accordingly respectfully following order of my Ld.predecessor, the A.O. is directed to allow depreciation as per the appellate orders in the immediately preceding years. In view of above, this ground of appeal is allowed. 6.1. The Revenue has not brought any material on record as to how the facts in the present case are different from the facts in the earlier years. The Revenue has not place .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised:- 1. That the learned CIT(A) has erred in law and facts by confirming disallowances u/s.14A of the Act on investment in shares of companies other than 2 foreign subsidiary companies and therefore the learned AO should be directed to delete the same while computing the total income. 2. That the appellant craves liberty to add, mend, alter and delete any grounds of appeal before the final hearing. 7.1. The only effective ground No.1 is against confirmation of disallowance u/s.14A of the Act i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version