TaxTMI 
TaxTMI 
2002 (4) TMI 572
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....ich was disallowed by the Assessing Officer." 2. Additional ground taken by the revenue and admitted by the Bench is stated as under:- "2.The learned CIT(A) has further erred both in law and on facts of the case in allowing assessee's claim of deduction under section 32 disregarding the facts that the Bank overdraft had been utilised for the purpose of machinery and the assessee had not utilised any funds from his own sources." 3. The relevant and material facts for the disposal of these grounds of appeals are that the Assessing Officer made disallowance of the claim of the assessee amounting to Rs. 1244888 under section 32AB of the Income-tax Act for the reason that the assessee has not utilised any amount from its own sources for....
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....e year was Rs. 2.10 crores and at the close of the year this was 5.5 crores. The investment in stocks was to the tune of Rs. 2.81 crores. This position further shows that investment in machinery was not made from the available sources of the company but by taking loans by raising the same from the overdraft account. In view of the above facts, it is clear that deduction under section 32AB was rightly disallowed." 5. Whereas on appeal before the CIT(A) the assessee in the written submissions contended as under:- "We have made claim for Rs. 1213597 under section 32AB. Although the said claim has been deducted out of total income of the company, but pertains to combing unit the basis of the claim are as under:- Total machinery purchas....
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....ssessing Officer before the CIT(A). Learned AR for the assessee further contended that the return of loan of Rs. 70000 was actually an adjustment of bridge loan against regular loan of 81.5 lakhs sanctioned by the Financial institutions and the assessee's claim of depreciation on machinery amounting to Rs. 91.589 lakhs, was only notional and hence cash flow statement of the assessee was worked out before deducting the depreciation. Lastly according to the learned AR for the assessee, since the funds for making purchases of machinery were available from profits earned by the assessee, so the Assessing Officer was not justified in making the disallowance. 7. Ld. CIT(A) on considering the detailed arguments advanced on behalf of the asse....
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....ng reliance on the reasoning given in the orders of tax authority below and contended that after proper verification of the records and after carrying out proper working, the CIT(A) has rightly concluded that the assessee has sufficient funds available from its own profits in making the impugned purchases of machinery, so the CIT(A) has rightly allowed the assessee's claim made under section 32AB. 11. On considering the rival submissions of both the parties, perusing the records and carefully going through the orders of tax authorities below. We are of the opinion that it is not very material whether the Assessing Officer conceded or not before the CIT(A) that the funds were available to the assessee for purchase of the machinery from th....