TMI Blog2015 (1) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of ACIT vs. Ashima Syntex Limited [2000 (8) TMI 22 - GUJARAT High Court] we do not find that such question can be considered as substantial question of law, which may arise in the present appeal, as canvassed. Appeal admitted on (D), (E), (F) &(G) being substantial questions of law. (D) Whether the Appellate tribunal has substantially erred in law in deleting the addition of ₹ 52,59,803/- in calculation of adjusted book profit for the purpose of MAT considered as towards provision for doubtful debt and diminution in the value of investment relying on the decision of coordinate Bench in the case of ACIT vs. Vodafone Essar Gujarat Limited ? (E) Whether the Appellate tribunal has substantially erred in law in deleting the addition of the provision for diminution in value of asset despite amended provisions of Clause (i) inserted in Explanation-I by Finance Act, 2009 w.e.f. 1.4.2001 under which the provisions for diminution in the value of any assets needs to be added back ? (F) Whether the Appellate tribunal has substantially erred in law in directing to reduce the prior period expenses of ₹ 23,27,520/- for the computation of book profits u/s 115JB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of investment relying on the decision of coordinate Bench in the case of ACIT vs. Vodafone Essar Gujarat Limited ? (E) Whether the Appellate tribunal has substantially erred in law in deleting the addition of the provision for diminution in value of asset despite amended provisions of Clause (i) inserted in Explanation-I by Finance Act, 2009 w.e.f. 1.4.2001 under which the provisions for diminution in the value of any assets needs to be added back ? (F) Whether the Appellate tribunal has substantially erred in law in directing to reduce the prior period expenses of ₹ 23,27,520/- for the computation of book profits u/s 115JB of the Act ? (G) Whether the Appellate Tribunal has substantially erred in law in deleting the addition of ₹ 64,13,532/- quantified as disallowance expenditure u/s 14A, despite the specific provisions of Clause (f) of Explanation- I to Section 115JB and when the issue of disallowance u/s 14A under regular computation was restored to the CIT(A) ? 3. On question (A), discussion by the Tribunal is from paragraphs 10, 11 and 11.1, which is reproduced herein below:- 10. Ground No.5 is against the disallowance of the expenses for sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Assessee, has relied upon the decision of this Court in the case of CIT vs. Cadila Healthcare Limited, reported in (2013) 31 Taxmann.com 300 (Gujarat). We find that as the question is already covered by the said decision of this Court, such question A would not arise being substantial question of law to be considered in the present appeal, as canvassed. 5. On question (B), discussions by the Tribunal are from paragraphs 12, 12.1, 13 and 13.1, which is reproduced herein below:- 12. Ground No.6 is against the disallowance of interest amounting to ₹ 17,06,566/. The ld. counsel for the assessee submitted that the AO made disallowance of interest on the basis that the interest free loans/ advances given by the assessee to its sister concern, namely, M/s.Casil Health Products Ltd. (CHPL). The AO made addition of ₹ 30,93,151/as compared to, in the same average rate of borrowing i.e.7.25% applied on the daily balances outstanding. On appeal, the ld.CIT(A) restricted the disallowance to the extent of 4% of the average cost of fund. The ld. counsel for the assessee submitted that the assessee was having sufficient interest free funds. The ld. counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of S.A.Builders Ltd. vs. CIT reported in (2007) 288 ITR 01 (SC) answered the question in favour of assessee. In the present case, both the authorities have made addition on the basis that the advances given have been continuing for a long period of time. Both the authorities have not given any finding with regard to availability of funds with the assessee for making such advances. However, the contention of the assessee is that the fact is not controverted by the authorities below that the advances have been given for business purposes since the assessee has been making purchases and getting job work from the associate concern. This goes to prove that advances were given for business purpose. The Hon'ble Jurisdictional High Court has decided the issue in favour of the assessee by following the judgement of the Hon'ble Apex Court rendered in the case of S.A.Builders Ltd. vs. CIT (supra), wherein it has been held that if the advances have been made for business purpose, then disallowance is not called for. The Hon'ble Supreme Court in that case has approved the judgement of Hon'ble Delhi High Court rendered in the case of CIT vs. Dalmia Cement (B.) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty power consumption bill, registration of excise, etc. He submitted that the authorities below failed to appreciate the fact that it was not necessary that the production so made should be sold, in fact the assessee had furnished evidence of commencement of the production. He submitted that the issue is squarely covered by the judgement of Hon'ble Gujarat High Court rendered in the case of ACIT vs. Ashima Syntex Ltd.(supra). On the contrary, ld.Sr.DR supported the orders of the authorities below. He submitted that the assessee should have given the cogent evidence regarding usage of the plant purchased from Pfizer Ltd. and also production so made. 17. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgement relied upon by the ld. counsel for the assessee. The authorities below have not disputed the fact that the assessee has purchased the plant machinery and installed the same. The authorities below have also not disputed the fact that the assessee has furnished the electricity bill, etc. and also the salary paid to the staff. The Hon'ble Gujarat High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the plant and machinery were upto the extent of its efficiency is irrelevant for the purpose of deciding depreciation. The test is that building, plant and machinery are used for the purpose of business. It is not even necessary that in a year it must have been used for a particular number of days. If the intention of the legislature was that if the plant and machinery is used for a particular number of days, only then one is entitled to get the benefit of depreciation, legislature would have made that provision. Earlier, rules were to the aforesaid extent. Even recently, with regard to depreciation of vehicles, law is made clear. Therefore, it is for the legislature to make a provision in that regard. Unless and until that provision is made, plant, machinery and building used for the purpose of business in a particular year irrespective of number of days for which it worked, and if worked for the purpose of business, would attract the provisions of s. 32 of the Act. 17.1. In the present case, the assessee has produced the evidence of electricity power consumption that goes to show that the Plant was running and this fact is not rebutted by placing any contrary evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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