TaxTMI 
TaxTMI 
2015 (12) TMI 1553
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.... to the Ld. counsel, even in earlier assessment years, the said Ms. M. Krishnaveni used to file Form 15H and the assessee has paid the amount without deducting the tax. During the year consideration, Form 15H in fact was filed on 10.04.2011, before the due date for deposit of the TDS amount. Since the assessee was informed in advance, according to the Ld. counsel, the TDS was not made and in fact, the assessee has filed the TDS certificate subsequently. Therefore, there cannot be any disallowance. The Ld. counsel placed his reliance on the decision of the Jodhpur Bench of this Tribunal in ITO v. Pearl Organic Coatings [2004] 4 SOT 755, the decision of Mumbai Bench of this Tribunal in Karwat Steel Traders v. ITO [2013] 145 ITD 370/37 taxmann.com 190 and Delhi Bench of this Tribunal in Vijaya Bank v. ITO [2014] 49 taxmann.com 533/66 SOT 20 (URO). 3. On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the assessee at the time of crediting the interest income has to deduct tax as required under Section 194A of the Act. In this case, admittedly, the interest was credited in the books of account before 10.04.2011 and the tax was not deducted. The....
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....unable to uphold the order of the lower authority and accordingly, the order of the lower authority is set aside and the addition of Rs. 71,016/- is deleted. 5. The next issue arises for consideration is with regard to disallowance of Rs. 3,70,377/- 6. Shri G. Baskar, the Ld. counsel for the assessee, submitted that the assessee is in the business of generating electricity through windmill. During the year under consideration, the assessee has added one more windmill to the existing business. Therefore, according to the Ld. counsel, it was an expansion of business and not extension of business. Therefore, proviso to Section 36(1)(iii) of the Act is not applicable. However, the Assessing Officer found that the assessee has to capitalize the interest on the borrowed funds till the machinery is put to use. Referring to Section 36(1)(iii) of the Act, the Ld. counsel submitted that the interest payment till the machinery was put to use has to be capitalized when the business of the assessee was extended. In this case, it is not an extension of business but expansion of business. When the business was expanded by adding one more windmill, according to the Ld. counsel, the proviso t....
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....rovided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalised in the books of account or not) ; for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction : Explanation - Recurring subscriptions paid periodically by shareholders, or subscribers in Mutual Benefit Societies which fulfil such conditions as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause ;" As rightly submitted by the Ld. D.R., the Parliament qualified the word "extension" with the word "existing business or profession". Therefore, what is to be extended is existing business or profession. The contention of the Ld. counsel for the assessee is that addition of one more windmill does not amount to extension, it is only an expansion of the business. This Tribunal is of the considered opinion that when the assessee is admittedly in the business of generation of electricity through windmill and made addition of one more windmil....
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....e, the assessee cannot claim deduction. Therefore, this judgment of the Apex Court is also not of any assistance to the assessee. 11. In view of the above discussion, we do not find any reason to interfere with the order of the CIT(Appeals) and accordingly, the same is confirmed. 12. The next ground of appeal is with regard to disallowance of Rs. 46,71,233/- being the amount paid to Life Insurance Corporation of India, towards Narasu's Spinning Mills Employees Group Gratuity Fund. 13. Shri G. Baskar, the Ld.counsel for the assessee, submitted that the assessee has admittedly paid Rs. 46,71,233/- towards Employees Group Gratuity Fund to LIC. The assessee has also produced a copy of the receipt for payment of money before the Assessing Officer. According to the Ld. counsel, the payment of money is not disputed. Once the money is paid in the year out of the hands of the assessee, in view of judgment of Apex Court in CIT v. Textool Co. Ltd. [2013] 35 taxmann.com 639/216 Taxman 327, the amount paid by the assessee has to be allowed under Section 36(1)(v) of the Act. 14. We heard Sh. P. Radhakrishnan, the Ld. D.R. also, who submitted that admittedly, the Employees Group G....