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TMI Blog2017 (4) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether on the facts and in the circumstances of the case learned Income Tax Appellate Tribunal was justified in dismissing the departmental appeal in respect of addition of Rs. 1,56,786/- made on account of depreciations on Iraqi assests without appreciating the material brought on records and the facts of the case. 2.) Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal was justified in dismissing the departmental appeal in respect of addition of Rs. 6,52,16,092/- on account of depreciation on temporary erections by holding that durable structures made of cement, bricks and steels and designed to last 10 to 15 years qualified as purely temporary structures eligible for depreciation @ 100% under the Income Tax Rules, 1962. 3.) Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal was justified in dismissing the departmental appeal in respect of addition of Rs. 2,46,000/- on account of disallowance of interest on borrowings because it is contrary to the decision of Punjab and Haryana Court in the case of CIT Vs. Abhishek Industries Ltd.(2006) 286 ITR 1, even though the assessee& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for revenue pointed out that questions no. I, II, III & V are basically founded on appreciation of facts and in the absence of anything to show that findings are perverse, or there is any misreading of document, or that any relevant evidence has been ignored, these questions do not give rise to any substantial question of law. 4. Learned counsel for Revenue at this stage, also stated, at the outset, that substantial question of law is question no. IV and that may be considered and decided by this Court. This question reads as under: "IV. Whether on the facts and in the circumstances, learned Tribunal was right in dismissing departmental appeal in respect of disallowance of interest on borrowed amount of Rs. 3,25,03,000.00." 5. The Assessing Authority (hereinafter referred to as ''A.A.') in the assessment order dated 29.03.2005 has dealt with the issue of disallowance of interest as under: "5. Disallowance of Interest:- From the examination of Balance Sheet of the company for Financial Year 2001-02, it was found that the company has advanced interest free loans/advances to various parties with whom it had no business transactions. The details of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as such no congizance is taken on this argument. Moreover period of Block assessment does not pertain to this Asstt. year. Hence interest @ 12.5% on advance given Rs. 2600.20 crore on which no interest has been charged is disallowed which worked at Rs. 3,25,03,000/-." (emphasis added) 6. Findings aforesaid show that addition on account of interest upto the date of search was deleted by Commissioner of Income Tax (Appeals), Lucknow, (hereinafter referred to as ''CIT(A)', on the ground that no interest bearing funds were utilised for making any interest free loans/advances to various parties and hence, no interest should be disallowed in the year in question, but A.A. has discarded aforesaid deletion made by CIT (A) only on the ground that department has not accepted decision of CIT (A). So long as CIT (A)'s order is not upset, it was not open to A.A. to ignore the same. Therefore, addition made by him was apparently illegal. This is what has been found by CIT (A) and Tribunal in the appeal preferred against assessment order dated 29.03.2005. CIT(A) has dealt with aforesaid issue in paras 7, 8 & 9 as under: "7. Regarding the addition of Rs. 3,25,03,000/- the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal preferred by Revenue has also noted that in ITA 187/Luc/04, relating to assessment year 2000-01, decided on 17.11.2006, Tribunal has already upheld the view taken by CIT (A). Findings recorded by Tribunal in para-55 of the order reads as under: "55 We have considered the rival submissions and have perused the record of the case. It is stated that if assessee has utilized its non-interest bearing funds for giving non- interest bearing advances then no disallowance is called for. The AO has merely gone by the fact that assessee had given interest free advances to different concerns of assessee's group. He has not commented upon the actual sources from where these advances were given. In the block assessment for the period ending on 2.7.1999, it has been clearly observed as noted above that assessee was having sufficient own funds to finance the interest free advances. These facts being not controverted no disallowance is called for. We, accordingly, confirm, the order of the Ld. CIT(A) on this issue. The ground is dismissed." 8. Aforesaid decision dated 17.11.2006 relating to assessment year 2000-01 also has been followed to confirm finding of CIT (A) in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was right in dismissing the departmental appeal in respect of addition of Rs. 79,58,63,603.00 lacs made on account of retention money without appreciating the facts of the case and the material brought on records. (v) Whether on the facts and in the circumstances of the Income Tax Appellate Tribunal was right in dismissing the appeal of the department in respect of disallowance of Rs. 25,27,000/- on account of share issue expenses debited in P & L account, contrary to the decision of Hon'ble Supreme Court in the case of PIDC Ltd. Vs. CIT reported in 225 ITR 972." 4. So far as question-(i) is concerned, we find that there is a finding of fact recorded by Tribunal after noticing that Assessing Officer computed the foreign currency translation difference as income as per accounting principle and only on notional basis. In this regard, Tribunal has recorded its finding which reads as under: "8. As could be seen from the computation reproduced by the AO in assessment order, this difference had arisen on the translation of the overseas account in the Head Office account at the end of the year on exchange rate prevalent on the last day of the accounting year. The AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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