TaxTMI 
TaxTMI 
2012 (11) TMI 549
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....of Rs. 4,08,835/- on account loss of stock as the assessee failed to prove the genuineness of this claim. 4. That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.18,200/- made u/s 14A on the income claimed as exempt to tax. 5. That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,84,420/- made on account of interest capitalized on proportionate basis pertaining to the preoperative period as the fund borrowed for the purchase of machinery keeping in view of ratio of decision of Hon'ble Punjab & Haryana High Court reported in 286 ITR. 6. That the Ld. CIT(A) has erred in law and on facts by allowing the assessee's claim worth Rs. 7,09,457/- in respect of reducing the income due to valuation of closing stock. The claim of assessee is not acceptable keeping in view judgement of Hon'ble Supreme Court in the case of Goetez (India) Ltd. vs CIT reported in 284 ITR 323(SC). 7. That the order of the Ld. CIT(A) be set aside and that of the A.O. be restored. 8. That the appellant craves leave to add or amend any ground of appeal before it is finally disposed off." 3. In ground No.1, revenue conte....
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....GS USED FOR BUSINESS PURPOSES-NOT ON REVENUE TO SHOW NEXUS BETWEEN BORROWINGS AND ADVANCES-THAT ADVANCES BY COMPANY WERE OUT OF ITS OWN FUNDS OF SHARE CAPITAL OR OUT OF MIXED FUNDS, NOT SUFFICIENT TO DISCHARGE ON US INTEREST TO EXTENT RELATING TO SUMS ADVANCED INTEREST-FREE TO BE DISALLOWED INCOME- TAX ACT,1961, s.36(1) ( i i i ) . " 12. Respectfully following the decision of the Hon'ble jurisdictional High Court , this ground of appeal of the revenue is allowed. " 6. This ground of appeal of the revenue is allowed. 7. In Ground No.2, revenue contended that CIT(A) erred in deleting the disallowance of Rs.7,68,000/- made on account of interest not declared by the assessee on undisclosed investment of Rs.64 lacs not declared in the books of account. 7( i ) In the course of present appellate proceedings, it transpired that issue is covered against the revenue in assessee's own case in ITA No. 1293/Chd/2010 A.Y. 2007- 08, as per para 16 & 17. We have perused the issue in question and found that the same is covered against the revenue in assessee's own case. The same is reproduced hereunder : "16. In Ground No.1, revenue contended that CIT(A) erred in law in de....
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....r years or during this year. 8(iii) In the course of assessment proceedings before CIT(A), assessee claimed it as business loss and stated that it had worked out at 0.02% of the total sales of the assessee company and in fact, the stock which is in shortage, may have resulted over the years due to breakage, theft or some other reason. However, same was noticed in the year under consideration. Ld. CIT(A), on appreciation of the submission filed by the assessee and fact-situation of the case, allowed the loss. Relevant para of the findings is reproduced hereunder : "11. I have considered the issue under appeal and it is seen that the appellant's basic claim is that the difference has been found because of physical verification carried out on implementation of new software called SAP. Since the physical verification of stocks is carried out every year in order to arrive at the figures of closing stock in respect of various items, then there is no logic in appellant's claim that the loss has been discovered on account of implementation of new software. However it is also a matter of fact that the physical verification has led to shortage of stock to the extent of Rs. 4,08,835/-. This....
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....rry out the business in efficient manner. The CIT(A), deleted the impugned addition on the ground that the said investment has been purely because of direction of the Punjab Government and the same related to the exigency of business. The findings of the CIT(A) are contained in para 14 and same are reproduced hereunder: "14. I have considered the basis of disallowance made by the A.O. and the arguments of the AR on the issue. It is *clear that the said investment has been made entirely because of directions of the Punjab Govt. and in connection with the business of the assessee company to contribute its bit in waste management and there has not been any income from this investment during the year under consideration. As such there was no reason for the A.O. to work out the disallowance as no exempt income from such investment has been claimed. Therefore the addition made by the A.O. is deleted." 13. We have carefully perused the rival submissions, and also findings of the AO and CIT(A). Having regard to the exigency of business and the non-optional investment to be made by the assessee on the direction of the Punjab government, the impugned addition cannot be made, as held by the....
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...., this ground of appeal of the revenue is dismissed. 17. In Ground No. 6, revenue contended that CIT(A) erred in law and on facts by allowing the assessee's claim worth Rs. 7,09,457/- in respect of reducing the income due to valuation of closing stock. The claim of assessee is not acceptable keeping in view judgement of Hon'ble Supreme Court in the case of Goetez (India) Ltd. vs CIT reported in 284 ITR 323(SC). The AO disallowed the claim of reduction in closing stock to the tune of Rs.7,09,457/-. The AO disallowed the claim on the ground that same was not made by the assessee in revised return and in view of judgement of the Hon'ble Supreme Court cited in the ground of appeal. 18. Before CIT (A), it was submitted that the assessee is following consistent method of accounting and each year valuation is made on the basis of scientific and accepted method by the Department and in each year, by way of certain adjustments in the stock valuation, certain additions are made in the valuation of stock, which are accepted by the assessee and the benefit of the same is being given in the corresponding year. The assessee filed a statement of addition of closing stock, as is evident from pag....