TaxTMI 
TaxTMI 
2015 (11) TMI 1122
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 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 temporary OD facilities given by bank against the Fixed Deposit. 3. EXCESS PAYMENT TO PART....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 rate of depreciation @15% on the assets mentioned in the above grounds, the AO restricted the same to 10%. On similar facts, the Tribunal held in favour of the assessee and granted 25% as c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see 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 the balance sheet of the assessee. Accordingly, he requested that this matter may be set aside to the file of the AO so that the assessee would be able to demonstrate about the availablility of its own funds, to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.......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 the parties mentioned that this issue raised in ground no.4 needs to be remanded to the file of the AO for fresh adjudication after admitting the said additional ground. 16. After hearing both the parties and on perusal of the add....