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2015 (6) TMI 877 - ITAT KOLKATA

2015 (6) TMI 877 - ITAT KOLKATA - TMI - Disallowance of Repair & maintenance of building - revenue v/s capital expenditure - CIT(A) deleted the addition - Held that:- We concur with the views of the ld. CIT(A) that ₹ 79,56,858/- included expenditure on security amounting to ₹ 42,32,673/- and on maintenance of garden amounting to ₹ 1,36,267/- and such expenditure cannot be treated towards repair. No evidence has been brought on record by the AO by increasing such expenditure whi .....

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t:- The present year is A.Yr.07-08 on which rule 8D is not applicable. Therefore in view of the decision of Kolkata Bench of ITAT in the case of DCIT vs M/s.Varanasi Commercial Ltd., [2012 (3) TMI 401 - ITAT KOLKATA] for A.yr.2007-08 where the disallowance has been restricted to 1% of the exempted income. Following the same we find no infirmity in the order of ld. CIT(A) who has rightly restricted the disallowance to 1% of the exempted income at ₹ 2005/- Decided against revenue.

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e no deduction of tax at source arise from the assessee. Therefore no disallowance u/s 40(a)(ia) can be made. In such circumstances and facts of the case we concur with the findings of ld. CIT(A) - Decided against revenue.

Non reconciliation of ITS details - addition on difference deleted by CIT(A) - Held that:- AO has not made adequate enquiry as to why such difference arose. The contention of the assesee that the amount appearing in ITS details has been subsequently changed by the d .....

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n, AM,JJ. For the Appellant : Shri K L Kanak, JCIT For the Respondent : Shri Anup Sinha, CA ORDER Per Shri B P Jain,AM. These two appeals of the Revenue arise from two different orders of ld.CIT(A)- IV, Kolkata for Assessment Years 2007-08 and 2006-07 each dated 23.12.2011. 2. The revenue has raised the following grounds of appeal in ITA No.693/Kol/2012 for A.Yr.2007-08: "1. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in deleting the addition of ₹ 73,54,25 .....

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the disallowance of ₹ 39,691/- u/s 14A since his decision is not made methodically and he did not consider the necessity of Sec.14A properly. 4. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in deleting the disallowance of ₹ 11,93,352/- u/s 40(a)(ia) without considering the fact that unless the payee submit certificate u/s 197 the assessee company is obliged to deduct tax at source. 5. That the appellant craves for leave to add, delete or modify any of the .....

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f the case, Ld. CIT(A) erred in law in deleting the addition of ₹ 66,60,893/- on account of repair & maintenance of building since the assessee company will get enduring benefit of such expenditure over the years. 3. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in deleting the addition of ₹ 10,23,942/- on account of repair & maintenance of machinery since the assessee company will get enduring benefit of such expenditure over the years. 4. That on .....

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f facts of the case are that AO made the disallowance at ₹ 73,54,257/- out of total expenditure of ₹ 79,56,858/- incurred in connection with repairs and maintenance of owned and lease buildings taken on rent. The allegation of AO was that the repair expenses are about 264% of the opening WDV of the buildings and there is no closing WDV in the block of building as the entire building has been sold off. It was explained that there are buildings which are owned by the assessee even thou .....

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tal expenditure and depreciation was allowed on the same. 3.2. Before the ld. CIT(A) the assessee made the submissions. The ld. CIT(A) vide para 3.3 to 3.5 allowed the claim of the assessee. 4. We have heard the parties and perused the materials available on record. We concur with the views of the ld. CIT(A) that ₹ 79,56,858/- included expenditure on security amounting to ₹ 42,32,673/- and on maintenance of garden amounting to ₹ 1,36,267/- and such expenditure cannot be treated .....

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Thus ground no.1 of the revenue is dismissed. 5. As regards ground no.2 of the revenue the brief facts of the case are that AO made the disallowance of ₹ 10,08,114/- out of total expenditure of ₹ 15,89,698/- incurred towards repairs and maintenance of plant and machinery. The AO made disallowance since the WDV as on 01.04.2006 was ₹ 22,50,354/-, cost of repairs was ₹ 14,58,185/- which is about 65% of WDV. 6. The ld. Counsel for the assessee made the submissions before ld .....

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during in nature, no disallowance can be made. In the circumstances and facts of the case we find no infirmity in the order of ld. CIT(A), who has rightly deleted the disallowance made by AO. Thus ground no.2 of the revenue is dismissed. 8. As regards ground no.3 of the revenue the brief facts of the case are that AO made disallowance of ₹ 39,691/- u/s 14A in respect of exempt income. Such disallowance has been made on estimate basis at 0.5% of average investment. The ld. CIT(A) deleted th .....

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sallowance to 1% of the exempted income at ₹ 2005/- Thus ground no.5 of the revenue is dismissed. 10. As regards ground no.4 of the revenue the brief facts of the case are that AO made disallowance of ₹ 11,93/352/- u/s 40(a)(ia) of the Act on the ground that no tax had been deducted in respect of rent payment of ₹ 11,93,352/- and such disallowance has been made by the AO on the basis of Tax Audit Report being Schedule-7 of the tax Audit Report. 10.1. The ld. CIT(A) deleted the .....

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respective persons were also filed before ld. CIT(A). This matter was duly brought to the notice of the AO as is evident from the assessment order. Since the payees did not have taxable income therefore no deduction of tax at source arise from the assessee. Therefore no disallowance u/s 40(a)(ia) can be made. In such circumstances and facts of the case we concur with the findings of ld. CIT(A)vide para 7.2 to 7.2.2. Thus ground no.4 of the revenue is dismissed. 12. Ground no.5 of revenue, being .....

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