TMI Blog2015 (11) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... ile of AO with a direction to examine this issue afresh by considering the information and explanation that may be furnished by the assessee and take appropriate decision in accordance with law Disallowance u/s 40A(2)(b) - Held that:- We direct the AO to compute the disallowance @ 6% of the aggregate purchase value of the purchases made from Arya Industries - Decided in favour of assessee in part Allowablility of the claim u/s 35D - Held that:- The assessee brought our attention to the additional ground filed before us for the first time making an alternate claim seeking relief u/s 37(1) of the Act. In this regard, Ld Representatives of both the parties mentioned that this issue raised in ground no.4 needs to be remanded to the file of the AO for fresh adjudication after admitting the said additional ground. Disallowance of alternate claim of depreciation when the rentals were not allowed - Held that:- As relying on assessee's own case [2014 (12) TMI 677 - ITAT MUMBAI] We notice it is held that the AO has denied the benefit of depreciation also on the ground that the assessee is not the owner of the asset as per the lease agreement. There is a fallacy in the said decision. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of land purchase at Athal was given from current account maintained by the company with Indian Overseas Bank Ltd against the temporary OD facilities given by bank against the Fixed Deposit. 3. EXCESS PAYMENT TO PARTY COVERED U/S 40A(2)(b) ₹ 4,77,918/- 3.1. The Ld CIT (A) erred in confirming disallowance of ₹ 4,77,918/- u/s 40A(2)(b) in respect of plastic adaptors from Arya Industries, without appreciating the facts that payment made to specified persons are well within the prevailing market rates in competitive atmosphere and are comparable iwth other manufacturers. 3.2. The Ld CIT (A) failed to appreciate the facts that while comparing the rates with third parties, though the lower quotations were also available, the then AO has purposefully taken the higher quotation available. 3.3. The Ld CIT (A) failed to appreciate the facts that appellant company cannot compromise on the quality of plastic adaptors for its use in packing of finished products to avoid damaged to finished goods. 4. DISALLOWANCE OF EXPENDITURE COVERED U/S 35d OF ₹ 21,94,414/- FOR RAISING FCCB 4.1. the Ld CIT (A) erred in confirming the disallowance made by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assets and the rate of depreciation is the subject matter of dispute. While the assessee claimed rate of depreciation @15% on the assets mentioned in the above grounds, the AO restricted the same to 10%. On similar facts, the Tribunal held in favour of the assessee and granted 25% as claimed by the assessee in the earlier AYs mentioned above. Bringing our attention to para 29 at page 12 of the said order of the Tribunal (supra) dated 17.12.2014, Ld Counsel for the assessee read out the relevant lines from the said para and demonstrated to the satisfaction of the Bench. For the sake of completeness of this order, relevant lines of the said para are extracted as under: 29...............Hence, by following the decision of the Ahmedabad Bench of the Tribunal referred above, we hold that the electrical fittings in the instant case should be considered as plant and machinery and hence the depreciation should be allowed at the rate of 25% to plant and machinery. 4. Considering the above Tribunal s decision on the identical issue as well as in the absence of any contrary decision before us from the side of the Revenue, we, respectfully following above decision of the Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funding the above said projects and the availability of its own funds could be proved to the AO by showing the balance sheet of the assessee. Accordingly, he requested that this matter may be set aside to the file of the AO so that the assessee would be able to demonstrate about the availablility of its own funds, to which the Ld DR also did not object. Accordingly, we set aside the order of the Ld CIT (A) and restore this issue to the file of AO with a direction to examine this issue afresh by considering the information and explanation that may be furnished by the assessee and take appropriate decision in accordance with law. 9. Considering the commonality of the issue involved in the instant ground with that of the one decided by the Tribunal (supra) vide above extracted para 31 of its order and respectfully following the same, we remand this issue to the file of the AO with identical directions. Accordingly, ground no.2 with its sub-grounds raised by the assessee is allowed for statistical purposes. 10. Ground No.3 relates to the disallowance of ₹ 4,77,918/- u/s 40A(2)(b). Brief facts in this regard are that the assessee made purchases POY to the tune of ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first time making an alternate claim seeking relief u/s 37(1) of the Act. In this regard, Ld Representatives of both the parties mentioned that this issue raised in ground no.4 needs to be remanded to the file of the AO for fresh adjudication after admitting the said additional ground. 16. After hearing both the parties and on perusal of the additional ground raised by the assessee, we find the request for admission of the additional ground and remanding the same for fresh adjudication is appropriate and it requires to be sustained. Accordingly, the additional ground along with the ground no.4 raised by the assessee is remanded to the file of the AO for fresh adjudication. It is needless to mentioned that the AO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice. Accordingly, additional ground as well as ground no.4 with its sub-grounds are allowed for statistical purposes. 17. Ground No.5 relates to the disallowance of alternate claim of depreciation of ₹ 45,87,122/-, when the rentals were not allowed. In this regard, Ld Counsel for the assessee brought our attention to the said Tribunal s order (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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