TMI Blog2018 (1) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... funds, reserves and surplus, share capital etc. should be utilized. It is the company who decides the time of utilization of reserve and surplus funds. During the year under consideration appellant has taken fresh loans from (i) Ranjit Sen, (ii) Aditya Sen, (iii) Supriya Sen, (iv) Suparna Sen, (v) R. R. Gopal. All other balances are opening balances. Thus without prejudice to the above and in the alternative, the appellant stated that the proposition that when advance have been made in the past for which no disallowance has been made in the year of advance, there could be no disallowance in the subsequent year and now it is settled by the decision in case of Shridev Enterprise [1991 (1) TMI 52 - KARNATAKA High Court] and CIT vs. Sushma Kapoor [2009 (10) TMI 56 - DELHI HIGH COURT]. Unexplained/unsecured loan - Held that:- The amount of ₹ 20,00,000/- is an opening balance which is being carried forward for F.Y.2007-08 and there is no new amount has been taken during the year under consideration and an addition u/s.68 is not legal and assessee cited a judgment CIT vs. Usha Stud Agricultural Famrs Ltd. (2008 (3) TMI 91 - DELHI HIGH COURT) in the appeal, it has been held that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the fact that the assessee has not proved the creditworthiness and identity of the party. 3. The ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 95,274/- made by AO towards late payment of employees contribution to PF ESIC even though the same was not paid within due date. 4. The brief facts of the case are that the AO noticed that appellant had claimed depreciation at 15% on electrical equipments instead of 10% so that the difference of 5% i.e. ₹ 1,36,878/- and further the additional deprecation of ₹ 77,178/- was inadmissible. Ld. CIT(A) held that AO has failed to appreciate that the appellant company has claimed the depreciation at 15% because the electrical installations were installed at the plant of the factory. The electrical installation includes items like Control penal board cooling and temperature control in plant, HP motor, Utility penal, gland KCE for plat etc. which are being used in the plant of the assessee company as a part of plant and machinery. Hence it cannot be construed as Furniture and Fixtures. The appellant explained theses facts. As per CIT(A), ld. AO has erred in not granting depreciation at 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on date, same was not disposed off by the department. In this case, amount was paid to LIC group of Gratuity Fund, which is under the control of the Central Government and an application for approval of Gratuity fund is pending before the department. As per decision of Hon ble Punjab Haryana High Court, in the case of CIT vs. Bitoni Lamps Ltd. 277 ITR 396. The AO however, held that gratuity liability cannot be allowed when the assessee did not have any approved gratuity fund. The claim was accordingly DCIT, Bharuch vs. Baroda Gujarat Gramin Bank disallowed. Same submissions were made before the learned CIT(A). The learned CIT(A) considering the order of ITAT Ahmedabad Bench in the case of Crystal Solvent Pvt. Ltd. (ITA No.655/Ahd/2005) allowed the appeal of the assessee in which it was held that disallowance u/s.40A(7) of the IT Act cannot be made on the ground of absence of approval of gratuity fund as the deduction was not claimed on account of any provision. As per order of co-ordinate bench, in the case of New Bharat Engineering Works (Jam) Ltd. vs. ITO 44 TTJ (Ahd) 522. The learned Counsel for the assessee further submitted that the assessee made a claim on actual exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el.). 13. In our considered opinion, It does not require any interference in the order passed by the ld. CIT(A). Therefore, this ground of appeal of the department is dismissed. 14. So far as disallowance of 20,00,000/- made by AO as unexplained/unsecured loan is concerned. During the year of assessment proceeding, the AO had asked for the confirmation of parties to the Unsecured Loan. Assessee filed confirmations of 11 parties to the unsecured loans alongwith their PAN. But in absence of source, credit worthiness, identity etc. one of the parties to the Unsecured loans i.e. Standard Cal Chem, the Ld. AO made addition of ₹ 20,00,000/- as Unsecured loan. In appeal ld. CIT(A) deleted the addition. 15. We have gone through the relevant record, the amount of ₹ 20,00,000/- is an opening balance which is being carried forward for F.Y.2007-08 and there is no new amount has been taken during the year under consideration and an addition u/s.68 is not legal and assessee cited a judgment CIT vs. Usha Stud Agricultural Famrs Ltd. (301 ITR 384)(Delhi HC) in the appeal, it has been held that no addition u/s.68 with respect to opening balance. In our considered opinion, in su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
