TaxTMI 
TaxTMI 
2016 (5) TMI 972
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....confirming addition on account of disallowance out of various expenses of textile division amounting to Rs. 10,31,448/- as per page 10 of the CIT(A) order. 2. The learned CIT(A) grossly erred in confirming addition on account of disallowance out of various expenses of power division amounting to Rs. 7,24,700/- as per page 10 of the CIT(A) order. 3. The appellant reserves right to add, alter and withdraw of any grounds of appeal. 3. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") was framed vide order dated 20.12.2010. While framing the assessment, the Assessing Officer observed th....
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....tten submission, the disallowance to the extent of Rs. 9,75,370/- is contested and rest of the disallowance is not pressed. The contention of the assessee in respect of Ground No.1 is as under:- Nature of expenses Amount Submission Fees to CA for filing return of income for AY 2007-08 2,80,900 Legal fees accrued as an when the bill is raised by the concerned professional. Since the bill is raised on 31.03.2008 and, therefore, the liability of expenditure arose in the period in which the company had operations after taking over the business. Merely because the bill pertains to AY 2007-08, disallowance is not justified. Wages to workers 3,30,490 The liability of wages to worker for the month December arose on 26th &....
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....ed as and when the bill was raised by the concerned professional. In respect of wages to workers, the contention is that liability of wages to workers for the month December arose on 26th and 31st December, 2007, i.e., in the end of the month. Since the partnership firm Abhishek Exports was converted into company on 12.12.2007 with all its assets and liabilities, any liability which arose after the conversion belongs to assessee, i.e., Abhishek Exports (India) Pvt Ltd. It is therefore urged that proportionate disallowance of 11 days is not justified. In respect of packing credit bank loan interest, similar contention is made that the proportionate disallowance of 11 days was not justified. 5.1 We have given our thoughtful consideration t....
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.... the month of December 2007 arose in the end of the month, i.e., 31st December 2007. Since the wages are paid on daily basis, the Assessing Officer was justified in disallowing the expenditure pertaining to 11 days, i.e., the period before succession; therefore, the contention in this regard is rejected. Thus, the Ground No. 1 is partly allowed as discussed hereinabove. 6. Next ground is against the disallowance out of various expenses of Power Division amounting to Rs. 7,24,700/-. Out of this disallowance of expenses of Rs. 7,24,700/-, only Rs. 7,09,780/- is contested before us; i.e., Rs. 5,55,210/- out of interest on term loan and Rs. 1,54,570/- on account of preliminary expenses. With regard to disallowance on account of interest on t....