TMI Blog2011 (1) TMI 1559X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal with which we shall deal in seriatim. 3. First Ground relates to disallowance of interest on advances for harvesting and transport of sugarcane amounting to ₹ 18,30,440/-. As per the assessment order, assessee had advanced huge advances to harvesting and transport contractors on which no interest was charged. The assessee explained that advances were given on a regular basis and it was difficult to furnish exact details regarding amounts advanced and the party to which the money was advanced. Before the Commissioner of Income-tax (Appeals), assessee contended that advances were given for reservation of harvesters and contractors so as to ensure that during the crushing season, timely services were available to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport contractor free of interest, because such advances were made to meet the exigencies of the contractors, which was certainly in the business interests of assessee. As per the Hon ble High Court, in a such like situation, the advances were made to ensure that contractors supplied harvested sugarcane promptly and efficiently, which was in the interest of assessee s business. Following the aforesaid judgment, we hereby set aside the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to delete the addition. Hence on this Ground, assessee succeeds. 6. Second Ground is with regard to a disallowance of ₹ 1,05,550/- on account of expenses incurred for inserting greetings to political functionaries a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arieties of sugarcane was a business necessity and, hence the expenditure constituted a genuine business expenditure. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) have dis-agreed with the assessee and the expenditure has been disallowed. 9. Before us, the learned Counsel for the assessee submitted that the impugned expenditure needs to be allowed since the addition to cane development fund is treated as income as per the decision of the Hon ble Supreme Court in the case of Siddheshwar SSK Ltd. 270 ITR 1 (SC) and, therefore, any expenditure on cane development shall be allowed. A reference has also been made to a decision of the Pune Bench of the Tribunal in the case of Jai Jawan Jai Kisan SSK Ltd. v. DCIT vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the parties, we find that this issue stands covered in favour of assessee by the decision of our coordinate Bench in the case of Indapur SSK Ltd. v. ACIT vide ITA No 597/PN/08 dated 31.8.2009. Following the parity of reasoning, we set aside the order of the Commissioner of Income-tax (Appeals) on this issue and direct the Assessing Officer to allow the claim of the assessee. This Ground of appeal is allowed. 13. The next issue relates to disallowance of telephone expenses of ₹ 50,000/-. After hearing both the parties, here again, we find that this issue stands covered in favour of assessee by the decision of our coordinate Bench in the case of Indapur SSK Ltd. v. ACIT vide ITA No 597/PN/08 dated 31.8.2009. Following the parity of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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