Tribunal directs AO to reevaluate tax disallowance & verify discrepancies in interest, depreciation, and capital gains.

Dy. Commissioner of Income-Tax, Circle 1 (1), Mumbai Versus Beekaylon Synthetics Limited

Dy. Commissioner of Income-Tax, Circle 1 (1), Mumbai Versus Beekaylon Synthetics Limited - TMI Issues Involved:
1. Disallowance of interest u/s.14A of the Act.
2. Deletion of depreciation on assets sold but not deducted from block of assets.
3. Disallowance of depreciation u/s.50C r.w.s. 50 of the Act for shops sold.
4. Addition of short term capital gain on sale of plant.
5. Disallowance of packing material expenses.
6. Disallowance u/s.40(a)(ia) of the Act for late payment of tax deducted at source.

Issue 1: Disallowance of interest u/s.14A of the Act
- The Revenue appealed against the deletion of disallowance of interest u/s.14A.
- The Tribunal set aside the order and directed the AO to decide the disallowance quantum based on a reasonable basis, following a specific judgment.

Issue 2: Deletion of depreciation on assets sold but not deducted from block of assets
- Dispute arose regarding the deletion of depreciation on assets sold but not deducted from the block of assets.
- The Tribunal found a conflict in statements and restored the matter to the AO for a final decision after verifying the actual sale date.

Issue 3: Disallowance of depreciation u/s.50C r.w.s. 50 of the Act for shops sold
- The dispute involved disallowance of depreciation u/s.50C for shops sold by the assessee.
- The Tribunal found discrepancies in stamp duty values and directed the AO to verify the stamp duty paid and make necessary adjustments.

Issue 4: Addition of short term capital gain on sale of plant
- The Revenue challenged the deletion of short term capital gain on the sale of a plant.
- The Tribunal found discrepancies in the sale consideration and directed the AO to reevaluate the issue based on proper evidence.

Issue 5: Disallowance of packing material expenses
- Dispute arose over the disallowance of packing material expenses.
- The Tribunal made an estimated addition towards cash expenses due to lack of supporting evidence.

Issue 6: Disallowance u/s.40(a)(ia) of the Act for late payment of tax deducted at source
- The dispute involved disallowance u/s.40(a)(ia) for late payment of tax deducted at source.
- The Tribunal upheld the deletion of the disallowance based on the provisions of section 40(a)(ia) for the relevant assessment year.

*Note: This summary is based on the judgment of the Appellate Tribunal ITAT MUMBAI in 2011 (7) TMI 1177 - ITAT MUMBAI.*