AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 50
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....s erred in law and on facts in allowing the disallowance of depreciation on building amounting to Rs. 3,37,157/- 5) The Ld. Commissioner of Income-tax(A)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowances made u/s. 41(1) of the Act amounting to Rs. 13,34,951/-. 6) The Ld. Commissioner of Income-tax (A)-XIV, Ahmedabad has erred In law and on facts in deleting the disallowances made by the Assessing Officer amounting to Rs. 1,12,368/- out of staff welfare expenses, Rs. 1,53,970/- out of vehicle expenses, and Rs. 13,05,162/- out of travelling expanses. 7) On the facts and in the circumstances of the case, the ld. CIT(A)- XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. 8) It is therefore, prayed that the order of the Ld. CIT(A)-XIV, Ahmedabad may be set-aside and that of the order of the Assessing Officer be restored. 2. The assessee is a company engaged in the business of manufacturing of Laser System for material processing and others. The assessee-company is located within the limits of Surat Special Economic Zone. 2.1 The first issue raised by the assessee-company, before us, is with regard to the disallowance of Rs. 5,30,76....
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....2-2009, furnished a copy of four BRCs only. Perusal of chart and BRCs reveals that the assessee itself exported to the extent of Rs. 26.65 crores only. The balance sales as claimed by the assessee for the purpose of exemption u/s. 10A were not made by the assessee company. Such sales were made by other parties to which the assessee company sold articles or things. The assessee could not explain as to why sales apart from Rs. 26.65 crores was eligible for exemption u/s. 10A of the Act. Further, for sales of Rs. 26.65 crores, it was observed that total 119 invoices were raised which could have been realized within stipulated time limit as mentioned in the relevant section. However, again such 119 invoices, the assessee could be able to produce 4 BRCs only. In absence of any evidences of realization of foreign convertible exchange, the claim of the assessee cannot be accepted. Moreover, the assessee produced a BRC of invoice No.3 of sales which shows that the assessee had exported to the tune of 13188 USD and in Indian currency the amount was mentioned as Rs. 1006359 instead of Rs. 572359 (13188 x 43.4). Thus, the assessee has excess claimed to the tune of Rs. 434000. Further, this ....
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....refore, the quantum of discrepancies cannot be identified. 8. The assessee was requested to produce production register of the Unit, sales of which were falling under the net of exemption u/s. 10A. But the assessee did not produce production register despite of given it more than reasonable opportunities. In absence of any verification of production details, the claim of the assessee is not accepted. 9. The assessee has not furnished the working of exemption u/s. 10A. In absence of any working, the claim of the assessee cannot be verified. In view of the above narrated facts and in the circumstances, the claim of exemption of Rs. 58265233 is denied." 2.2 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of the assessee and having considered the same, the CIT(A) granted relief to the assessee and the same has been opposed on behalf of the Revenue, inter alia, submitting that the CIT(A) erred in law and on facts in allowing the claim of the assessee u/s 10A of the Act amounting to Rs. 5,30,76,095. Accordingly, the ld. Departmental Representative pleaded that the order of the CIT(A) may be set aside and that of the Assess....
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....y as export and profits earned by such activity is eligible for exemption u/s. 10A of the Act. As per provisions of sub-section 1 of Section 10A, the deduction mentioned in sub-section 1 in computing the total income of the undertaking in any special economic zone shall be 100%. In the case of assessee-company, the sales within zone, sales of EOU and sales (100% export) of Rs. 22.99 lacs, Rs. 58.47 lacs and Rs. 3.74 crores respectively, totaling to Rs. 4.55 crores was deducted from the total income of the assessee. 3.2 The CIT(A) further found that although the assessee was having all the necessary certificates in Form No.56F and BRCs but were not produced before the Assessing Officer; therefore, the Assessing Officer had not allowed the exemption u/s. 10A of the Act claimed by the assessee. The assessee filed additional evidence on 02.03.2010 i.e. Form- 56F and few bank realization certificates before the CIT(A). Before the CIT(A), the Authorized Representative for the assessee took a plea that the Managing Director of the company Shri Arvindbhai Patel suffered a paralytic stroke and was under medical observation during the course of assessment proceedings. Further, the concerned....
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....ssee paid interest of Rs. 68,94,829/- during the year under consideration as against Rs. 69,88,315/- in the last year. The Assessing Officer further found that the assessee had given interest free loans and advances to various parties to the extent ofRs.1,26,80,993/-. The Assessing Officer, without discussing the facts of the issue in details, relying on the decision in the case of CIT vs. Abishek Industries Ltd [2006] 156 Taxman 257 (P&H), disallowed the claim of interest expenses amounting to Rs. 15,21,790/-. 4.1 Matter was carried before the First Appellate Authority wherein various contentions were raised on behalf of the assessee and having considered the same, the CIT(A) deleted the disallowance in question, which has been opposed on behalf of the Revenue, inter alia, submitting that the CIT(A) has erred in allowing the claim of interest expenses of Rs. 15,21,790/-. On the other hand, ld. Authorized Representative for the assessee supported the order of the CIT(A) and submitted that the assessee had sufficient surplus fund to advance loans without interest. He further submitted that the unsecured/secured loan amount on which interest has been paid was less than the fund avai....
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....allowance in question. This reasoned finding of the CIT(A) needs no interference from our side. We uphold the same. 6. Next issue is with regard to the disallowance of depreciation on building amounting to Rs. 3,37,157/-. The Assessing Officer has disallowed the claim of depreciation amounting to Rs. 3,37,157/- on building situated at A/8, Gandhinagar which was purchased on 27.03.2007 by executing deed of conveyance. The Assessing Officer noticed that the assessee has filed to furnish any evidences in support of its claim with regard to the depreciation except deed of conveyance and light bill. In liminie, the Assessing Officer disallowed claim of depreciation of the assessee. In appeal before the CIT(A), the same was allowed on the ground that the assessee was fully eligible for the claim of depreciation as the evidences like deed of conveyance and light bill produced by the assessee signifies that the assessee had infact used the building in the year under consideration. The CIT(A) also observed that the when the building is ready and put to use by the assessee, there is no ground of disallowance. These reasoning findings of the CIT(A) do not require any interference from our si....