9911796707
TMI Blog2024 (5) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... to as "the Act") relating to the Assessment Year (AY) 2015-16. 2. The assessee has raised the following grounds of appeal:- "The learned Commissioner of Income Tax Appeals has erred both in law & on facts in confirming the additions made by learned AO while passing an order u/s (3) of the 1. T. Act for AY 2015-2016 dated 15.12.2017. The learned CIT(A) has erred in confirming disallowance of Depreciation Rs. 3,370/- without appreciating the law and facts of the case properly. (u/s. 32) The learned CIT(A) has erred in confirming disallowance of Interest Rs. 6,22,500/- without appreciating the law and facts of the case properly. (u/s. 36(1)(iii) The learned CIT(A) has erred in confirming addition in stock value Rs. 12,52,238/- without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42(1) along with detailed questionnaire were issued on 09/06/2017 providing another opportunity to the assessee to represent its case. During the course of assessment proceedings, the Assessing Officer issued show-cause notice asking for justification of expenditures as claimed by the assessee. While making the assessment u/s. 143(3) of the Act, the Assessing Officer has made disallowance of interest expenditures as under: (1) Interest Expenses : Rs. 6,22,500.00 (2) Investment balance of taxes value of stock : Rs. 12,52,238.00 (3) Exp. claimed in earned exempt Income u/s. 14A of the Act r.w.r. 8D : Rs. 2,73,643.00 Accordingly, made total addition in the income of the assessee to the tune of Rs. 21,51,750/- vide assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven as a part of business expediency of the assessee company. The Assessing Officer was of the view that advance given to the wife of an employee cannot be considered for the purposes of business expediency. Therefore, the Assessing Officer has charged interest @ 15% on such advance and added an amount of Rs. 6,59,425/-. 5. The assessee preferred appeal before the Id. CIT(A) The Id. CIT(A) has dismissed this ground of appeal of the assessee. The Id. CIT(A) held that the impugned advance was given to the wife of the employees out of the overdraft account having credit balance frequently resulting into payment of interest on which the assessee has paid interest @ 11.5%. Accordingly, the ld. CIT(A) has restricted the disallowance of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2017], the Ld.CIT(A) has observed in Paragraph No.6.2 of his order, as under: "6.2. I have considered facts of the case. Firstly, I notice that debit balance of CENVAT is created by crediting the raw material cost and debiting this account and thus it is already credited in profit and loss account due to reduction in cost of raw material. Hence, it cannot be added to the income again. Rather than making addition for taxes or duties relatable to closing stock and also considering the exact impact of this excise on the method of accounting being followed by the appellant, the Assessing Officer wrongly added that debit balances of various duties created by reducing the cost of raw material. Thus, the addition of debit balances made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record. We find that the Ld.CIT(A) has deleted the addition in assessee's case for the AYs 2013-14 & 2014-15. Before us, neither the Ld.DR has placed any material on record nor controverted the findings of the ld.CIT(A). The CIT(A) while passing the aforesaid order relied upon the decision(s) of Hon'ble Supreme Court in the case of CIT vs. Indo Nippon Chemicals Co.Ltd. reported at 261 ITR 275 (SC) and CIT vs. M/s. Dynavision Ltd.(SC). In view of the aforesaid facts, we are of the opinion to approve the findings of Ld.CIT(A) and delete the addition. Thus, this ground of Assessee's appeal is allowed. 10. Ground No.5 relates to confirmation of disallowance of Rs. 2,73,643/- u/s. 14A of the Act by the Ld.CIT(A). A si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs, we are not inclined with the decision of Ld. CIT(A) however, we consider that incurring of administrative expenses i.e. cost of employee, office expenses etc. to manage the investment cannot be ruled out therefore we restrict the disallowance to the extent of administrative expenses of Rs. 85,923/- as computed by the Assessing Officer. Accordingly, this ground of appeal of the assessee is partly allowed." 11. We have heard both the sides and perused the material available on record. The assessee has claimed Rs. 27,22,464/- as exempt income being earned as dividend income. The Assessing Officer held that the indirect expenses were involved in earning this exempt income. The Assessing Officer accordingly worked out disallowance u/s. 14 r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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