2016 (6) TMI 840

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....ave heard ld. DR and perused the material available on record. 3. Effective grounds raised are as under: 1. On the facts and the circumstance of the case, whether Ld. CIT(A) was correct in deleting the addition of Rs. 1,42,21,882/- and holding that freight expenses are allowable as business expenditure in reference to re-export of equipments. 2. On the facts and in the circumstances of the case, whether Ld. CIT (A) was correct in deleting the addition of Rs. 51,07,400/- and holding that these were in nature of deductible expenses and the assessee was correct in not classifying this sum as work-in-progress for the reason that the assessee was not to recover anything from the client in spite of the fact that in the light ....

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....O disallowed the assessee's claim, inter alia, observing as under: "As the assessee has not imported any equipment during the year, but ahs re-exported only and that too to its head office, at a value near to WDV. The assessee has not submitted the basis of valuation of assets. In the circumstances it should have also recovered the freight expenses relating to such re-export of assets. Considering these facts, the freight expenses claimed of Rs. 14,221,882/- is disallowed." 5. As regards IT-500 Kolar project, the AO noticed that the income of the assessee was interest income on refunds from IT department and bank deposit interest income. He further noticed that expenses pertained to direct material of Rs. 35,95,180/-, subcontrac....

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....re with the order of ld. CIT(A) because he has, inter alia, pointed out that expenses had been incurred in reference to re-export of equipment used by the assessee in its business and hence these were in the nature of business expenditure. Nothing has been brought on record by the department to controvert these findings. Accordingly, order of ld. CIT(A) on the issue in question is upheld. Ground no. 1 is dismissed. 8. Apropos ground no. 2 in regard to IT-500 Kolar Project, we find that ld. CIT(A) in para 8.2 has observed as under: "8.2. I have duly considered the submissions of the appellant and other materials placed on record. It has been noted that all the payments have been made by account payee cheques and the appellant has....