TaxTMI 
TaxTMI 
2014 (5) TMI 1123
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....oss; ii. Disallowance of interest on diversion of interest bearing loans as interest free advances to subsidiary company; iii. Disallowance u/s.40(a)(ia) in respect of truck hire charges (freight charges) to the extent of Rs. 7,28,38,925/-. 3. The brief facts of the case are: The assessee-company [formerly known as SembCorp Logistics (India) Pvt. Ltd.,] provides integrated logistics and supply chain management services including warehousing services, depot management with certain value added services. The assessee is providing logistic services to corporate customers in various sectors such as automotive resource and mining to fast moving consumer goods, retail and pharmaceutics. The assessee for the AY.2007-08 filed its return of income on 31-10-2007 declaring a loss of Rs. 1,55,09,529/-. The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Income Tax Act, 1961 (herein after referred to as 'the Act') was issued to the assessee on 12-09-2008. The Assessing Officer vide assessment order dt.29-12-2009 made dis-allowance/additions inter-alia on account of: i. Foreign exchange fluctuation loans; ii. Interest on diversion of interest bearing ....
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.... CIT(Appeals) that the assessee could furnish bills to the extent of 78% of the total additions. Thus, it is not disputed that the assessee has not incurred expenditure on purchase of fixed assets during the relevant AY. The Revenue has not disputed the corresponding cash outflow for the purchase of said assets. We are of considered view that in the light of the fire incident which has gutted the branch offices of the assessee at Bhiwandi and Jamshedpur, the assessee has not been able to produce documents in support of purchase of assets. However, the assessee has been able to show from records expenditure incurred for fixing of the assets. The said claim of the assessee has not been rebutted by the Revenue. In view of the facts and circumstances of the case, we hold that the assessee is entitled to claim deprecation on the fixed assets acquired for Bhiwandi and Jamshedpur Branches. Accordingly this ground of appeal of the assessee is allowed. 7. The second ground raised by the assessee in its appeal is relating to dis-allowance of Rs. 8,41,46,181/- u/s.40(a)(ia). The Revenue has also assailed the findings of CIT(Appeals) on deleting the dis-allowance u/s.40(a)(ia) in respect of ....
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....ubmissions made by the ld.AR of the assessee. 11. It is an un-disputed fact that the fire had taken place at the premises of the assessee. Out of the total freight charges of Rs. 55.00 Crores, the assessee has been able to support its claim with respect to Rs. 46.6 Crores. The dispute is with regard to balance Rs. 8.41 Crores. Form No.15-I having value of Rs. 8.41 Crores are allegedly destroyed in fire that took place at Bhiwandi & Jamshedpur Branches. The assessee had produced the details of truck-wise list of form No.15-I received and destroyed in fire at Bhiwandi office. The assessee had pleaded genuine hardship in getting duplicate Form 15-I from large number of truck owners/drivers who were hired for transportation of goods throughout the country. Section 194C of the Act deals with the deduction of tax at source on payments made to contractors. Any person responsible for paying any sum for carrying out any work shall at the time of payment in cash or credit of such sum shall deduct on amount equal to 1% or 2% as the case may be (as specified under the Act) of such sum as income tax. Sub-section(6) of Section 194C gives exception where no such amount is to be deducted. The Re....
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....rd agreement dt.30-01-2004 wherein it has been mentioned that the borrower has taken funds to finance general business purpose expenditure. The CIT(Appeals) after examining the documents on record concluded that out of the total loan of Rs. 23.84 Crores, Rs. 21.68 Crores were utilized for working capital purposes and hence allowed the same as expenditure by following the decision of the Hon'ble Supreme Court of India in the case of CIT v. Woodward Governor India (P) Ltd., [2009] 312 ITR 254. 13. Before us, the ld.DR has not been able to controvert the findings of the CIT(Appeals). The Hon'ble Apex Court in the case of Woodward Governor India (P) Ltd., (supra) has held that loss suffered by the assessee on account of fluctuation in the rates of foreign exchange as on the date of balance sheet is an expenditure u/s.37(1) of the Act. We do not find any infirmity in the findings of the CIT(Appeals) on this issue. Accordingly, this ground of appeal of the Revenue is dismissed. 14. The next ground raised by the Revenue in its appeal is with respect to dis-allowance of interest on diversion of interest bearing loans. The contention of the ld.DR is that there is no nexus between ....