TaxTMI 
TaxTMI 
2015 (11) TMI 1122
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....part and parcel of plant and machinery, which includes High Tension power cabling panel boards 66KVA power line are connected with manufacturing process cannot be treated as part of furniture and fixtures and hence allowances of depreciation @ 10% is not justified. 2. DISALLOWANCE OF INTEREST OF Rs. 69,76,659/- 2.1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in confirming disallowance of interest by stating that similar addition had been confirmed by CIT (A) in assessment year 2005-2006. 2.2. The Ld CIT (A) failed to prove any direct nexus between the amount invested and interest expenditure attributed towards purchases of land at Athal, Silvassa, without appreciating the facts the appellant company had not borrowed any funds for acquiring land and other assets till 31st March, 2005, whatever expenditure was incurred towards projects were from internal accrual. 2.3. The Ld CIT (A) erred in not considering the details reply given vide letter dated 12.1.2011 confirming that the payment of land purchase at Athal was given from current account maintained by the company with Indian Overseas Bank Ltd against the ....
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.... submission given before the AO was also submitted to the CIT (A) during the course of appeal proceedings which states that in assessment year 2004-05 and 2005-06 alternate claim was allowed by the then AO in respective year. 5.3. On similar issue in AY 2007-2008, CIT (A) has allowed the relief of alternate claim of depreciation on assets taken on lease. Additional Ground 6. The Ld CIT (A) failed appreciate the fact that if the expenses are not allowable u/s 35D, then alternative the revenue expenditures may be allowed u/s 37." 2. At the outset, Ld Counsel for the assessee brought our attention to the above grounds and mentioned that they are covered by the order of the Tribunal in the assessee"s own case in the earlier AYs 2002-03; 2004-05 and 2005-06 in ITA No.4035/M/2006 (AY 2002-2003) and ITA Nos. 1623 & 1624/M/2009 vide the order dated 17.12.2014 copy of which is placed on record. Considering the same, ground wise adjudication is given in the following paragraphs of this order. 3. Ground No.1 relates to the disallowance of depreciation of certain assets and the rate of depreciation is the subject matter of dispute. While the assessee claimed ra....
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....e, CIT (A) confirmed the decision of the AO. Therefore, the assessee is in appeal before the Tribunal vide ground no.2 mentioned above. 6. During the proceedings before us, Ld Counsel for the assessee brought our attention to the said order of the Tribunal (supra) dated 17.12.2014 and mentioned that an identical issue was decided by the by the Tribunal vide para 31 of this order and therefore, the present ground should also be decided in the same lines. 7. On the other hand, Ld DR dutifully relied on the orders of the Revenue Authorities. 8. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited decision of the Tribunal (supra), we find the said para 31 of the Tribunal"s order dated 17.12.2014 is relevant in this regard. Considering the significance of the said para 31 and also for the sake of completeness of this order, the same is extracted as under: "31. We have heard the parties and perused the record. At the time of hearing the Ld AR submitted that the assessee had used the internal cash accruals for funding the above said projects and the availability of its own funds could be proved to the AO by showing t....
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....a 35 of the Tribunal"s order dated 17.12.2014 is relevant in this regard. Considering the significance of the said para 35 and also for the sake of completeness of this order, the same is extracted as under: "35...........Accordingly, to put this matter at rest, we direct the AO to recomputed the disallowance at the rate of 6% of the aggregate purchase value of purchases made from M/s. Arya Industries. The order of the CIT (A) on this issue stands modified accordingly." 14. Considering the commonality of the issue involved in the instant ground with that of the one decided by the Tribunal (supra) vide above extracted para 35 of its order and respectfully following the same, we direct the AO to compute the disallowance @ 6% of the aggregate purchase value of the purchases made from Arya Industries. Accordingly, this ground 3 with its sub-grounds is partly allowed. 15. Ground No.4 relates to the allowablility of the claim u/s 35D of the Act. In this regard, Ld Counsel for the assessee brought our attention to the additional ground filed before us for the first time making an alternate claim seeking relief u/s 37(1) of the Act. In this regard, Ld Representatives of both....