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ADIT, Circle 1 (2) , Intl. Tax) , New Delhi Versus Hyundai Engineering & Construction Co. Ltd.

2016 (6) TMI 840 - ITAT DELHI

Allowability of freight expenses - whether business expenditure in reference to re-export of equipment? - Held that:- Expenses had been incurred in reference to re-export of equipment used by the assessee in its business and hence these were in the nature of business expenditure. Nothing has been brought on record by the department to controvert these findings - Decided against revenue - Nature of deductible expenses - whether the assessee was correct in not classifying this sum as work-in-p .....

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2014 - Dated:- 15-6-2016 - Shri S. V. Mehrotra, Accountant Member And Smt. Beena A. Pillai: Judicial Member For the Appellant : Shri Sanjay Kumar Yadav Sr. DR For the Respondent : None ORDER Per S. V. Mehrotra, A. M This is revenue s appeal against the order dated 28.02.2014, passed by the ld. CIT(A)-XXIX, New Delhi, relating to AY 2005-06. 2. None put in appearance on behalf of the assessee. We proceed to dispose of the revenue s appeal, ex parte, qua the assessee and in that process we have he .....

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were in nature of deductible expenses and the assessee was correct in not classifying this sum as work-in-progress for the reason that the assessee was not to recover anything from the client in spite of the fact that in the light of the facts such expenditure should had been capitalized as work-in progress 3. Brief facts of the case are that the assessee was having 7 business units and it was mainly in engineering and construction business. The assessee had filed return of income declaring loss .....

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of ₹ 3,51,92,281/-. He further noticed that this project had a gross block of ₹ 118,840,919/- in respect of plant and machinery and on this depreciation of ₹ 52,909,739/- as per Companies Act was claimed. The whole block of plant and machinery had opening WDV as per the Act of ₹ 61,013,843. He noted that all the machineries relating to Naini Bridge project had been re-exported by the assessee during the year and the closing WDV of plant and machinery had become Nil. In th .....

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ld have also recovered the freight expenses relating to such re-export of assets. Considering these facts, the freight expenses claimed of ₹ 14,221,882/- is disallowed. 5. As regards IT-500 Kolar project, the AO noticed that the income of the assessee was interest income on refunds from IT department and bank deposit interest income. He further noticed that expenses pertained to direct material of ₹ 35,95,180/-, subcontract expenses of ₹ 10,55,072/-. He pointed out that since t .....

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er alia, making the aforementioned two disallowances. 6. Ld. CIT(A) deleted the disallowance in respect of Naini Bridge project observing as under: 7.2 I have duly considered submissions of the appellant, details of freight expenses, TDS certificates and other materials furnished by the appellant. It has been noted that all the payments have been made by the account payee cheques and the appellant has complied with TDS obligation wherever applicable. It is also a fact that freight expenses have .....

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