TMI Blog2017 (5) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1994-95, the allowance could be given for the assessment year 1995-96. It has further been stated that the above relief is subject to the fact that no deduction had been claimed for the assessment year 1994-95 for the amount of interest. - Decided against revenue. Allowability of depreciation - Held that:- A categorical finding has been recorded by the Tribunal that majority of the work was completed even prior to the commencement of the financial year and since as per the certificate of the Engineer installing the furnaces that the same were commissioned in the last week of August 1994 to March 1995, the assessee had rightly claimed depreciation thereon. It was thus concluded that whole of the expenses covered erection an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to financial institutions was allowable under Section 43B of the Income Tax Act, though the payments of ₹ 52,27,975/- made by assessee from 04.04.1995 to 16.11.1995 pertained to outstanding interest for assessment year 1994-95 and not assessment year 1995-96? (c) Whether on the facts and law, the Hon ble ITAT was right in holding that deduction in respect of interest to financial institutions was allowable, though the auditor of assessee clearly mentioned in the statutory Audit Report that the interest payable to financial institutions was disallowable under Section 43B of the Income Tax Act and out of total interest liability, an amount of ₹ 27,48,326/- was added back by the assessee itself in the revised return and balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the plea of the assessee that the payments were made before filing the return of income. Case of the revenue is that the assessee made the payment of interest before filing the return for the assessment year 1995-96 which pertained to the assessment year 1994-95 and was outstanding but the entire interest accrued in assessment year 1995-96 remained unpaid and was, therefore, rightly disallowed by the CIT while passing order under Section 263 of the Act. Even the auditor of the assessee clearly mentioned in the statutory Audit Report that the interest payable to financial institutions was disallowable under Section 43B of the Act and out of total interest liability, an amount of ₹ 27,48,326/- was added back by the assessee its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, in computation of income for the assessment year 1995-96, is valid claim, as per the reading of section 43B of the Income Tax Act, 1961. Since, payment of interest has been made during assessment year 1995-96, for the interest liability incurred during assessment year 1994-95, the allowance can be given for assessment year 1995-96. This is subject to the fact that no deduction has been claimed for assessment year 1994-95 (and also allowed) for the amount of interest (remaining unpaid at the end of assessment year 1994-95). 5. In view of the above the questions (b) and (c) are answered against the revenue. 6. Question No. (d) is general in nature and, therefore, does not arise for consideration. 7. With regard to question (a) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioned in third week of August 1994 and was taken for regular production from last week of August 1994. It was also certified that furnace No.2 and 3 were commissioned in February 1995 and were taken for production from March 1995. This certificate has been discarded by the Commissioner by observing that the certificate is dated 2nd February 1998 i.e. much after the event. If the Commissioner was not satisfied with the contents of the certificate, the recourse would be to call the person certifying the same and putting question to him. However, in absence of any material to hold that the certificate is not genuine, the value as contained in the said certificate is not lost. The work in relation to furnace commenced even prior to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. Thus this shows that whatever was required to be done regarding installation of the furnace was completed prior to the end of the financial year. The depreciation as such has been allowed in the succeeding year by the Assessing Officer by passing order under Section 143(3) of the Act. Even this order has not been found to be erroneous. This shows that the whole of the expenses covered erection and installation were complete before the end of the current financial year and hence entitled to depreciation. Thus there was no error in the order of the Assessing Officer granting depreciation. 8. In view of the above, the substantial questions of law are answered against the revenue. Consequently, the appeal stands dismissed. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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