TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2240
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....to alter, amend or delete any of the grounds of appeal or to add to the same, if deemed necessary. 3. The issue in ground of appeal No.1 raised by the assessee is against the disallowance under section 36(1)(iii) of the Act at Rs. 5,89,573/-. 4. Briefly, in the facts of the case, the assessee was a private limited company engaged in the business of manufacture of P.S.C. Poles. The assessee was a member of Yog Group of Aurangabad. Search action under section 132 of the Act was carried out on the Yog group on 21.02.2008 ad Survey action was carried out under section 133A of the Act at the factory premises of the assessee on the same date. The assessee filed return of income for the year under consideration on 30.03.2009 declaring total income of Rs. 12,42,891/-. During the course of assessment proceedings, the Assessing Officer noted that the assessee had made investment in shares of sister concern to the extent of Rs. 1,74,24,000/- and had also given interest free loans & advances to sister concerns of Rs. 3,00,350/-. The Assessing Officer further noted that the Reserves & Surplus funds available with the assessee was Rs. 36,83,453/-. The Assessing Officer in view of the interest....
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.... investment of Rs. 49,13,113/- and computed the disallowance under section 36(1)(iii) of the Act at Rs. 5,89,573/-. 6. The assessee is in appeal against partial addition made in the hands of the assessee. 7. The learned Authorized Representative for the assessee pointed out that no new investment was made during the year and all the investments were made in earlier years and no disallowance of interest was made in the earlier years. It was specifically pointed out by the learned Authorized Representative for the assessee that the findings of CIT(A) that similar disallowance was made in all seven scrutiny assessment years was incorrect. It was further pointed out by him that the said investments and advances were made because of commercial exigency as the assessee had business dealings with the sister concerns. Our attention was drawn to the submissions made before the Assessing Officer vis-à-vis the details regarding share investments and the availability of funds in financial years 1995-96 to 2007-08. Reliance was placed on the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Srishti Securities (P) Ltd. (2009) 321 ITR 498 (Bom). 8. The learned Departmental Rep....
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....he other hand, upholding the disallowance of interest noted the plea of the assessee that the total of interest free funds available as on 31.03.2008 was Rs. 1,26,37,878/-, against which the investment in loans & advances and share investments with the sister concerns amounted to Rs. 1,75,50,991/-. The CIT(A) worked out the disallowance under section 36(1)(iii) of the Act on the differential amount of Rs. 49,13,113/- and computed the disallowance @ 12% amounting to Rs. 5,89,573/-. The case of the assessee before us is that all these advances were made in the earlier years and no such disallowances were made in all the earlier years. The CIT(A) at page 5 has given a finding that the Assessing Officer had disallowed interest under section 36(1)(iii) of the Act in all seven years under appeal, for which the scrutiny assessments were made. The assessee on the other hand, has pointed out that no scrutiny assessments were made in the earlier years. The Revenue is not in appeal against the order of CIT(A) in allowing the benefit of interest free funds available with the assessee at Rs. 1.26 crores as against investment of Rs. 1.75 crores. The only issue raised in the present appeal is whe....
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.... asset into new asset by incurring expenditure. It was further contended by the assessee that the installation expenses of capital assets were to be regarded as capital assets. Another plea raised by the assessee was that the Assessing Officer had incorrectly disallowed expenditure in respect of assets for which, the assessee had not claimed additional depreciation. The submissions of the assessee were forwarded to the Assessing Officer, who in the remand report dated 24.02.2011 has accepted that the additional depreciation was allowable on generator set purchased for Rs. 1,30,000/- and also accepted that the additional depreciation was incorrectly disallowed in respect of some items amounting to Rs. 83,798/-, on which the assessee had not claimed additional depreciation. The CIT(A) accepted the contention of the Assessing Officer in respect of expenditure on conversion of old mould into new mould totaling Rs. 68,035/-, on which additional depreciation of Rs. 13,607/- was claimed and confirmed the addition. In respect of expenditure relating to installation of new generator set at factory premises amounting to Rs. 25,660/-, the plea of the assessee that the said expenditure was cap....