TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 858
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....f the case; 2. Deleting the addition on account of expenses under various heads of Rs. 42,10,861/- made by the A.O., without appreciating the facts of the case;" 2. The first ground of the appeal is against deleting the addition made U/s 40A(2)(b) of the Income Tax Act, 1961 (hereinafter referred as the Act) at Rs. 15,545/-. The assessee company is engaged in the business of manufacturing of casting, alloys and mechanical spares. The assessee filed its return on 07/08/2010 declaring total income of Rs. 20,49,550/-. The case was scrutinized U/s 143(3) of the Act. The ld Assessing Officer observed that the assessee had paid interest of Rs. 4,78,314/-@ 15% on deposits to the persons covered U/s 40A(2)(b) and paid interest to the bank @ 11.7....
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....f business as the company was needed additional funds. The borrowings were unsecured whereas bank borrowings were secured. The rate of interest paid to the family members were on annual basis. However, in case of bank, it was paid on the basis of monthly interest rate. There were other hide charges in the name of service also to be paid to the bank, therefore, there is no difference between rate of interest paid to the relatives. Accordingly, he prayed to uphold the order of the ld CIT(A). 5. We have heard the rival contentions of both the parties and perused the material available on record. After verification of both the rate of interest hardly any difference is found in the rate of interest as the secured and unsecured loan cannot be co....
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....e head power and fuel expenses. 6.1 Similarly, the ld Assessing Officer also sought the explanation for increasing the expenses under the head travelling expenses. The assessee's reply has been reproduced by the Assessing Officer on page 7 and 8 of the assessment order. After considering the assessee's reply, the ld Assessing Officer gave the same observation as given under the head power and fuel expenses. He found the explanation offered by the assessee was general in nature. Some of the internal vouchers of travelling were prepared on the basis of cash payment to the employees and without any concrete evidence, which was brought to notice of the AR of the assessee. The assessee had claimed expenses under this head at Rs. 6,40,11....
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....he appeal by observing that the assessee had paid electricity expenses at Rs. 1,27,33,946/- to AVVNL through account payee cheques. The payments were supported by bills and vouchers. The sale of high value products such as HRCS castings had decreased from Rs. 4.11 crores to Rs. 2.87 crores while sale of other items have remained more or less similar to last year. Consumption of electricity was more or less was same. This was the reason for decline in sale. There was a marginal increase in the tariff rate during the year under consideration. The diesel price also increased by 14.75%. This was the reason to increase in fuel expenses. The ld Assessing Officer had not found any bogus expenses, therefore, it is allowable U/s 37 of the Act. 7.1 ....
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....herefore, he also deleted the addition of Rs. 21,03,764/- made by the Assessing Officer. 8. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer and argued that there was no justification for increase in the various expenses with reference to decline of sale. These evidences were not produced before the Assessing Officer, therefore order of the Assessing Officer may please be confirmed. 9. At the outset, the ld AR of the assessee has vehemently supported the order of the ld CIT(A) and argued that the company is a manufacturer having excise license and is also a registered sales tax dealer. The goods were supplied to the big cement company but there was decline in the demand. Accordi....