Tax Appeal Outcome: Assessee's 2008-09 appeal partly allowed, 2009-10 dismissed; Revenue's 2008-09 appeal partly allowed.

The assessee's appeal for assessment year 2008-09 was partly allowed, while for assessment year 2009-10 it was dismissed. The Revenue's appeal for assessment year 2008-09 was partly allowed. The Tribunal's order, pronounced on June 28, 2013, addressed the issues regarding disallowance of interest, disallowance under the proviso to section 36(1)(iii) of the Act, and disallowance of expenditure on purchase of items.

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Issues involved: Appeals filed by the assessee and Revenue against the order of the Commissioner of Income-tax (Appeals) for assessment years 2008-09 and 2009-10 u/s 143(3) of the Income Tax Act.

Issue 1 - Disallowance of Interest under section 36(1)(iii) of the Act:
- The assessee invested in shares of M/s DSG Papers Private Limited and paid interest on borrowed capital.
- Disallowance of interest was made by the Assessing Officer based on the Punjab & Haryana High Court's ruling in CIT Vs. Abhishek Industries.
- CIT (Appeals) upheld the addition, following the Tribunal's order in the assessee's case for the previous year.
- Tribunal upheld the disallowance based on similar issue in the assessee's case for assessment year 2007-08.

Issue 2 - Disallowance under the proviso to section 36(1)(iii) of the Act:
- Disallowance of Rs.20,921/- for assessment year 2008-09 and Rs.59,063/- for assessment year 2009-10 under the proviso to section 36(1)(iii) was contested by the assessee.
- Tribunal allowed partial relief for assessment year 2008-09 by directing re-computation for a specific period.
- Disallowance for assessment year 2009-10 was upheld by the Tribunal.

Issue 3 - Disallowance of expenditure on purchase of items:
- The Assessing Officer disallowed expenditure on various items as not being in the nature of repair and maintenance but as addition to capital assets.
- CIT (Appeals) allowed the claim of the assessee, considering the expenditure to be revenue in nature.
- Tribunal upheld the majority of the expenditure as repair and maintenance, but directed depreciation on capital items like pumps and printers.

Conclusion:
- The appeal for assessment year 2008-09 by the assessee was partly allowed, while for assessment year 2009-10 it was dismissed.
- The Revenue's appeal for assessment year 2008-09 was partly allowed.
- The Tribunal's order was pronounced on June 28, 2013, addressing all the issues raised by the parties.

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