TMI Blog2011 (1) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... ubbed together, heard together and disposed off vide this common order for the sake of convenience. 2. The first common ground in all these appeals is that the CIT(A) erred in not appreciating the legislative intention in inserting the provisions of section 145A of the IT Act. The CIT(A) should have sustained the addition on account of excise duty on closing stock as the provision created towards excise duty payable on closing stock of finished goods is only a contingent liability and not as ascertained liability as on 31st March of the accounting year. 3. After hearing the both the parties, we are of the opinion that similar issue came up for consideration before this Tribunal vide order dated 18.2.2010 in the case of M/s Suryavamshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portionate interest on the loan advanced to the sister concern. 6. Brief facts of the issue are that the assessee company has advanced monies to its erstwhile subsidiary company M/s Suryavamshi Textiles Ltd. As on 31.3.2003 ₹ 196 lakhs is outstanding and no interest by the assessee company has been charged while interest is being paid on the borrowed funds by the assessee company. Accordingly, the assessing officer calculated that interest at 14% per annum on the outstanding amount. According to the assessee, M/s Suryavamshi Textiles Ltd. has become a sick Unit under the SIC(SP) Act and was referred to BIFR and it was incurring losses continuously and unable to pay even the principal amount to the assessee company and the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the learned counsel for the assessee, the amount advanced was not out of the borrowed funds and the money was advanced on account of commercial expendancy. The subsidiary became a sick unit under the industrial companies (Sub Provisions) Act and referred to the BFIR and recoverability of the amount is doubtful as such no interest was charged. He relied on the judgement of the SC in the case of SA Builders Ltd. Vs. CIT (288 ITR 1) (SC), CIT Vs. R.J. Trivedi Sons (183 ITR 422) (MP HC). 9. We have heard both the parties and perused the materials on record and carefully gone through the case law cited by the parties. The main plea of the assessee s counsel herein is that M/s SVTL as become a sick company, as such interest was not charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entire money in a business entity comes in a common kitty. Monies are received as share capital or as term loan or working capital loan or as internal accruals do not have a different colour. Whatever the receipts in the business, have the colours of business receipts and have no separate identification. The only thing sufficient is to disallow the interest paid on the borrowing to the extent of amount lend to subsidiary company without carrying any interest would be that the assessee has some loans or interest bearing debts to be repaid. In case, the assessee had a surplus which according to it could not be repaid immediately, it would either be required to be circulated and utilized for the purpose of business or to be invested in a man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing book profit u/s 115JB of the Act. The assessing officer observed in the assessment order that the assessee failed to establish that the provision for diminution in value of investments is an ascertained liability, and hence, it is liable for adjustment u/s 115JB(1) ( c ). The provision so created is only a charge on profit but no on appropriation of profit. Accordingly, the provision made towards diminution in value of investments amounting to ₹ 15 lakhs was added to the net profit for the purpose of computing book profit u/s 115JB. The assessee submitted that the investments are assets and not a liability and the diminution in value of such investment is a loss. Therefore, clause (c ) of Explanation to s.115JB(1) has no app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. The next ground in ITA No.1175/H/2009 is that the CIT(A) should have appreciated the findings of the assessing officer in disallowing the claim of the revenue expenditure when the assessee itself has capitalized the same in its books of account. 17. Brief facts of the issue are that the disallowance of expenditure of ₹ 17,33,592/- towards disallowance of expenditure on account of deferred revenue expenditure. As per the assessment order, the assessing officer noticed that the assessee company claimed an expenditure to the extent of ₹ 17,33,592/- in the computation of income mentioning that the expenditure had been incurred towards cost of parts for replacement in machinery and development charges paid to CPDL of AP Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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