TaxTMI 
TaxTMI 
2011 (4) TMI 505
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....and in the circumstances of the case, the ITAT is right in law in confirming the order of the CIT(A) regarding deletion of Rs.13,76,990/-, made by the Assessing Officer on account of rent undercharged by the assessee from its sister concern? (ii) Whether on the facts and circumstances of the case, the ITAT is right in law in allowing Rs.24,93,443/- as depreciation on building for the full year, whereas the Assessing Officer has established that the said fixed asset was not completed and put to use on or before 30.9.1995? (iii) Whether on the facts and circumstances of the case, the ITAT is right in allowing Rs.66,04,880/- as depreciation on plant and machinery for the full year, when the Assessing Officer has established that the Plant & Machinery was not put to use on or before 30.9.1995? (iv) Whether on the facts and circumstances of the case the ITAT is right in law in allowing deduction of Rs.43,52,604/- as interest paid on money advanced to its sister concern free of interest in the light of judgment of this Court in CIT-I, Ludhiana Vs. Abhishek Industries Ltd., dated 4.8.2006?" 3. The facts, in brief, necessary for adjudication as pleaded in th....
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.... electricity available there. The comparable cases had not been referred by the Assessing Officer while determining notional rent. The Tribunal while affirming the aforesaid findings had recorded as under:- "31. The AO has opined that the total investment in the newly constructed building and land being that of Rs.7,73,09,772/- interest thereon at the minimum rate of 10% would work out at Rs.77,30,972/-, 50% of which would amount to Rs.38,65,465/- that against this, the assessee was charging rent at the annual rate of Rs.18 lakhs only, which amounted to under charging of rent. Before the learned Commissioner (A), the assessee had placed on record written submissions along with the lease agreement, on the basis of which the learned Commissioner (A) deleted the addition in question. 32. The Department has not been able to controvert the findings of fact recorded by the learned Commissioner (A). The lease agreement produced by the assessee showed that the location of the company was far away from any industrial estate. The AO failed to consider the market rent and did not make a comparison with other instances, for arriving at a notional rent, taking an ad-hoc 10% of t....
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....n at the new site on 29.6.1995; that raw material machines etc., had been received and installed at the new building much before 30.9.1995; and that could only have been happened if the building was ready and put to use. The learned Commissioner (A), after considering the evidence placed, agreed with the submission on behalf of the assessee to the effect that the building was constructed and put to use on 30.9.1995, it was held that the assessee was entitled to depreciation for whole year. As such, a further relief of Rs.24,51,145/- was given. The total relief to the assessee on depreciation of building thus amounted to Rs.24,94,443/- (Rs.42,298/- + Rs.24,51,145/-). 40. The plea raised by the department has been that since as per the certificate from M/s Abhijit Ray & Associates, the Architects of the assessee, the process of completion of the building was only in the month of March, 1996. So, it could not have been possibly put to use before 30.9.1995. As a result, according to the department, the assessee is not entitled to the relief on account of depreciation of the building, as granted by the learned Commissioner (A). 41. The learned Commissioner (A) has found as a fact that....
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....material on record which may require interference by this Court in the aforesaid findings. 11. Taking up third issue, the Tribunal while affirming the findings of the CIT(A) had concluded that plant and machinery were put to use before 30.9.1995 entitling the assessee depreciation for the entire year. The relevant observations noted by the Tribunal read thus:- "47. The AO observed that this letter clearly showed that no production had actually taken place till 26.9.1995 and that production was yet to commence. The assessee also claimed that the first sale from the new plant was made to M/s Mark Exhaust Systems Ltd. On 27.9.95. In this regard, the AO observed that M/s Mark Exhaust Systems Ltd. was none other than the assessee's own sister concern; that the copy of invoice issued by the assessee in respect of the said first sale showed that some 25 "End Covers" were sold in returnable cases against a purchase order received just a day before, i.e. on 26.9.1995; that the assessee could not produce any corroborative evidence to establish that the goods ordered on 26.9.1995 could be manufactured within a short span of one day and that they were also despatched on the sam....