TMI Blog2016 (1) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... findings, we do not find any infirmity in the conclusion arrived at by the ld.CIT(A) while deleting the disallowance of impugned interest. - Decided in favour of assessee Disallowance of 50% of depreciation on Bathinda Plant - CIT(A) deleting the addition - Held that:- As before deleting the addition, the ld. CIT(A) should have afforded an opportunity to the Assessing Officer to examine the sale invoices placed before him for the first time, which has been made the sole basis for deletion of addition. There is also no finding in the impugned order whether the production alleged to have been made before 01.10.2003 was a regular production or on trial basis. In view of these facts, we think it appropriate to restore the issue to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(Appeals) has erred in deleting disallowance of depreciation of ₹ 73,12,202/- on the basis of assessee s evidence of 3 sales invoices in respect of which opportunity was not granted to the assessing officer under rule 46A of the Income-tax Rules. 2005-06: 1. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) has erred in deleting disallowance of interest expenses of ₹ 13,39,84,000/- on loans from Ministry of Chemical and Fertilizer ignoring the fact that the said disallowance was made by the assessing officer holding that the amount of interest was not deductible u/s. 36(1)(iii) of the I.T. Act. Since common question of law and facts is involved in both the appeals, the same are being d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working capital loan sanctioned to it by that department of which the assessee is a public sector Undertaking. The Assessing Officer disallowed the claim of assessee observing that the assessee has not actually paid interest to the Govt. of India and therefore, applying the provisions of section 43B added back the same to the total income of the assessee. The Assessing Officer also disallowed 50% of the depreciation on Bhatinda Plant observing that the plant at Bhatinda started functioning during the year w.e.f. 01.10.2003 whereas the assessee claimed depreciation for the whole year. Therefore, excess depreciation claimed of ₹ 73,12,202/- was disallowed and added to the income of the assessee. The assessee company challenged this orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no evidence to suggest that interest on the loans have been waived by the Ministry, the disallowance of interest of ₹ 12,91,84,505/- invoking the provision of section 36(1)(iii) is not in order, no matter that interest has not been paid on the borrowings from the Government. In view of these findings, we do not find any infirmity in the conclusion arrived at by the ld.CIT(A) while deleting the disallowance of impugned interest. Accordingly, this issue is decided against the Revenue and in favour of the assessee. 5. As far as the disallowance of 50% of depreciation on Bathinda Plant, the ld. DR argued that the said plant had not started working before 01.10.2003 and same came into operation w.e.f. 01.10.2003. Therefore, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue afresh. Accordingly, the appeal of the Revenue is partly allowed for statistical purposes. 7. Adverting to the appeal of the Revenue for the assessment year 2005-06, we find that the only issue involved in this appeal is in respect of deletion of interest expenditure of ₹ 13,39,84,000/- on loans from Ministry of Chemical and Fertilizer. This issue has been decided in favour of the assessee while deciding the appeal of the Revenue for the assessment year 2004-05 in the foregoing part of this order. There being no change in the facts and circumstances and the issue being identical, we are inclined to follow our conclusions given on the issue in appeal for A.Y. 2004-05. Accordingly, the appeal of the Revenue for A.Y. 2005-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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