TaxTMI 
TaxTMI 
2015 (1) TMI 739
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....act that this business was not conducted during the year and the basic condition of Section 32 that assets must be used for the purpose of business is not satisfied. 2. On the facts and circumstances of the case, the Ld. CIT(A)has erred in deleting the addition of prior period expense of Rs. 1,36,51,602/- in law and on merits. 3. On the facts and circumstances of the case, the Ld. CIT(A)has erred in treating the expenditure of Rs. 92.50 lakhs incurred on processing fees paid to banks and financial institutions as Revenue expenditure. 4. On the facts and circumstances of the case, the Ld. CIT(A)has deleted the addition of Rs. 1,02,75,000/-. On account of commission paid for processing loans from banks/financial institutions without appreciating the fact that there is no evidence on record that recipient of the commission actually liaisoned with banks/financial institutions to arrange the finance for the assessee. 5. On the facts and circumstances of the case, the Ld. CIT(A)has erred in not remanding the addition on account of exchange rate fluctuation back to the AO and in giving directions to the AO in violation of Section 251. 6.(a) On the facts and circumstances of the case,....
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....we hold that the CIT(A) rightly allowed relief for the Assessee and orders of the ITAT have not been set aside or modified by any high forum. We, therefore, of the firm opinion that we are unable to see any ambiguity or any other valid reason to interfere with the findings of the CIT(A) in this regard. Therefore, under these circumstances, Ground No.1 of the Revenue being devoid of merits is dismissed. GROUND NO. 2 OF THE REVENUE. 5. The Ld. Departmental Representative submitted that the CIT(A) has erred in deleting the addition of prior period expenses of Rs. 1,36,51,602/- in law and on merits. The Ld. Departmental Representative further submitted that the Assessee's claim of Rs. 1,06,16,692/- on account of Rent and Common Sharing Expenditure paid to Escorts Ltd which was claimed to be in dispute, therefore, the claim of the Assessee is not acceptable. The Ld. Departmental Representative further submitted that the expenses has to be charged in the year in which it was incurred in a mercantile system of accounting the expenses claimed by the Assessee were incurred in earlier years and cannot be allowed in the year under consideration. Therefore, the AO rightly made addition which....
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....enses are always claimed in the year in which the same are quantified in view of above we inclined to hold that since the liability in respect of entire expenditure arose during the year under consideration. Therefore, the same cannot be disallowed by holding them to be prior period expenditure. Hence, the CIT(A) rightly granted relief for the Assessee and we decline to interfere with the impugned order in this regard. On the basis of aforementioned discussions, Ground No. 2 of the Revenue being devoid of merits is dismissed. GROUND NO. 3 OF THE REVENUE. 8. Apropos Ground No. 3 the Ld. Departmental Representative submitted that the CIT(A) has erred in treating the expenditure of Rs. 92.50 lakhs incurred of processing fees paid to banks and financial institutions as revenue expenditure. The Ld. Departmental Representative further submitted that the processing fees expenses one to be capitalized and the AO rightly made addition in this regard. The AR vehemently contended that this issue has been covered in favour of the Assessee by the decision of Hon'ble Madras High Court in the case of CIT Vs. Shri Meenakshi Mills Ltd 290 ITR 107 (Madras) and submitted that the processing fee pai....
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....UE. 11. Apropos Ground No.4 the Ld. Departmental Representative submitted that CIT(A) has deleted the addition of Rs. 1,02,75,000/- on account of commission paid for processing loans from banks/financial institutions without appreciating the fact that there was no evidence on record that the recipient of the commission actually lisioned with banks/financial institutions to arrange the finance for the Assessee. The DR further submitted that the AO rightly held that these agents were not required and on enquiries made from banks it was denied by the bankers that any person other than employees of the Assessee Company was involved in syndicating the bank loans. The DR also contended that the AO rightly concluded that no services were rendered by these agents. The DR vehemently contended that the CIT(A) wrongly hold that the payment of brokerage was genuine and needs to be allowed. 12. Replying to the above, the Ld. AR supported the impugned order and submitted that the CIT(A) has given a factual finding that the brokers had rendered services and these are the parties which have their Permanent Account Nos. (PAN) and other tax particulars. The AR further contended that these factual ....
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....n 251 of the Act and submitted that the CIT(A) is not empowered to remand or restore the issue to the file of the AO with certain directions. Replying to the above, the Ld. AR submitted that the point of the Revenue is not clear whether the Department is aggrieved over the remanding of this matter to the AO or wanted the matter to be referred back. The AR further submitted that the Assessee has disallowed a sum of Rs. 64 lakhs in the Assessment Year 2002-03 on account of exchange rate fluctuation and had claimed this amount as deduction in the Assessment Year 2003-04 on payment basis. On careful consideration of above submission we observe that the CIT(A) has discussed this issue at Page No. 11 in para viii wherein the CIT(A) has directed to allow this amount after verification of facts. The AR submitted that the power to confirm and upheld also includes verification of certain facts at the end of AO. 15. From computation of income for Assessment Year 2002-03 which is available at Page 191 to 192 of the paper book, we clearly observe that the Assessee has added back a sum of Rs. 64 lakhs in the computation of income for the Assessment Year 2002-03. Further from page 189 to 190 of ....
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....ound No. 1, 1.1 and 2. Accordingly, Ground No. 1, 1.1 and 2 are dismissed as not pressed. Ground No. 4 of the Assessee is of general in nature which needs no adjudication. We also dismiss the same. The remaining Ground No. 3, 3.1, 3.2 and 3.3 are related to the one issue which read as under:- ".3. That the Ld. CIT(A) has grossly erred in law and in the circumstances of the appellant's case in confirming the addition of Rs. 1,56,85,383/- on account of provisions made by the appellant towards various routine expenses at the end of the year. 3.1 That the Ld. CIT(A) has erred in law and on facts in holding that the provisions represented contingent liability. 3.2 That the Ld. CIT(A) ought to have held that the provisions made at the year end towards various expenses are liabilities which have actually accrued to the appellant and pertained to the year under consideration and were legally and properly allowable under the law. 3.3 That the Ld. CIT(A) has gross erred in law in confirming the addition inspite of the fact that most of such provisions have been paid immediately after the closes of the year, for which necessary evidences were filed before the AO/CIT(A). 20. Apropos Groun....