TaxTMI 
TaxTMI 
2011 (6) TMI 504
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....njustified & contrary to the provisions of law & facts prevailing in the case. The claim of advertisement expenditure is allowed. The appellant be granted just & proper relief in this respect. On facts & circumstances prevailing in the case & as per provisions of law, it be held that the disallowance of Rs. 3,31,730/- & Rs. 3,69,796/- out of vehicle expenses & telephone expenses respectively is not in accordance with provisions of the Act. The disallowance so made is deleted. The appellant be granted just & proper relief in this respect. On facts & circumstances prevailing in the case & as per provisions of law, it be held that disallowance of Rs. 7,97,902/- on account of depreciation on cars is contrary to the provisions of the Act & facts prevailing in the case. The disallowance so made is deleted. The appellant be granted just & proper relief in this respect. On facts & circumstances prevailing in the case & as per provisions of law, it be held that disallowance of Rs. 11,58,461/- made by invoking the provisions of section 40(ia) on account of non-deduction of the Act & such disallowance being unwarranted be delet....
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....t in Mutual Fund shown in item-D in the Schedule F regarding investments. The Ld. A.R. submitted that the issue relating to provisions u/s. 14A in case of Mutual Funds is also covered by the recent decision of Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. Reliance Utilities and Power Ltd. 313 ITR 340 (Bom.) and Godrej & Boyce Mfg. Co. Ltd., v/s. DCIT 328 ITR 81 (Bom.) 5. The Ld. D.R. did not dispute the above submission of the Ld. A.R., but he tried to justify the assessment order in this regard. He submitted further that A.O has made disallowance of interest separating the same in view of the provisions laid down u/s. 14A and others and Ld CIT (A) has made disallowance as per Rule 8D of I.T. Rules. 6. The relevant facts are that A.O made disallowance of Rs. 72,88,204/- u/s. 36(1)(iii) and 14A. He observed that interest bearing fund to the extent of Rs. 5,83,34,802/- were deployed in investments, income whereof is not includible in the total income. After calculating average cost of borrowing at 10.75%, he worked out interest attributable to investments out of borrowed capital at Rs. 62,70,991/- and disallowed the same by invoking the provisions of section 1....
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....funds with the assessee was already explained in their letters by the assessee before the A.O. Those were in much excess of the investment made by the assessee yielding tax free income. It was required to be considered while working out the disallowance, if any. It was contended that the word "incurred" used in Section 14A requires factual finding that interest bearing funds have really gone into financing the asset generating tax free income. The assessee also made following submissions on relevant facts ~ "iii) The investment in Weikfield Overseas Ltd. of Rs.26,69,747/- has directly resulted into the income by way of Royalty from Weikfield International (UAE) of Rs. 7,21,535/-. Weikfield Overseas Ltd it a joint venture alongwith Dabar who market the products by using the trade name of "Weikfield'. The joint venture is known as "Weikfield International (UAE)'. It is for the user of the name the company gets the royalty. Therefore this investment is a business investment & cannot qualified for disallowance of any u/s. 36(1)(iii)/section 1 4A. iv) The interest paid to the bank of Rs.28,95,382/- is on account of cash credit / overdraft facilities taken from State Bank/Dena Bank....
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....; Rs. 8,55,938/ - Interest on unsecured loans Rs.36,36,478/ - Interest on security deposit Rs. 3,68,763/- Vehicle loan interest Rs.3,05,224/- Interest on ICD Rs. 82,357/- Total &....
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....ssee contended that company had constructed the Dome and handed it over to PMC. Thus, it had not retained property in its structure. By the said construction of dome, the assessee had achieved the twin object of advertisement and meeting the social commitment as well. No benefit of enduring nature was created out of this structure, hence expenses so incurred deserves to be allowed as revenue expenditure u/s. 37 of the Act. The Ld CIT (A) did not agree and upheld the action of the A.O. 13. Similar argument has been advanced by the Ld. A.R. in support of the Ground. We find substance in the contention of the Ld A.R. that no benefit of enduring nature was created out of the structure since after construction of it, the same was donated to the PMC. Thus expenses incurred on the construction are revenue in nature within the meaning of Section 37 of the Act. The A.O is directed to allow the same as such. Ground No. 2 is accordingly allowed. Ground No. 3 (Assessee) 14. In absence of log book and telephone calls' records the A.O. disallowed 20% of the expenses claimed on account of motor vehicles and telephones. It resulted into disallowance of Rs.3,31,730/- out of the claimed veh....
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....t that the issue raised is covered in favour of the assessee in view of the decision of Hon'ble Bombay High Court in the case of Dilip Singh Sardar Singh Bagga, 201 ITR 995 (Bom.). He submitted further that the issue is also covered by the decision of Pune Bench of the Tribunal in the case of Rohan Builders and Developers (P.) Ltd. v/s. ACIT in ITA No. 942/PN/2006, A.Y. 2004-05, order dated 29th August 2008. Ld. D.R., on the other hand, tried to justify the orders of the authorities below. Considering the above submissions, we find that the Hon'ble Bombay High Court in the case of Dilip Singh Sardar Singh Bagga ( Supra) has been pleased to hold that where an assessee has purchased a motor vehicle for valuable consideration and used the same for its business cannot be denied the benefit of depreciation on the ground that the transfer was not recorded under the Motor Vehicles Act or that the vehicle stood in the name of the vendor on the records of the authorities under the Motor Vehicle Act. Following the ratio laid down therein by the Hon'ble jurisdictional High Court, the Pune Bench of the Tribunal has decided an identical issue in case of Rohan Builders and Developers (P.) Ltd. v....
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....hat it had subsequently paid the TDS alongwith interest u/s 201 of the Act, we are of the view that the issue needs fresh consideration after verification of certain basic fact. This verifiable material fact is, as to whether the TDS was paid before the filing of the return u/s. 139(1) for the year under consideration. We thus set aside the matter to the file of the ld. CIT (A) to get verified the above stated material fact and decide the issue afresh in view of the decision of Mumbai Bench of the Tribunal in the case of Bansal Parivahan (India) (P) Ltd vs. ITO (2011) 53 DTR (Mum) (Trib) 40 after hearing the parties. We have occasion to go through this decision of Mumbai Bench wherein it has been held that amendments made by the Finance Act, 2010 w.e.f. 1.4.10 to the provisions of S. 40(a)(ia) being curative/remedial nature are applicable retrospectively. As per the amendments if the tax has been deducted in the relevant previous year and the same has been paid on or before the due date of filing return of income for the said previous year as specified in S. 139(1), the corresponding amount from which such tax has been deducted shall be allowed as deduction. In vi....