TaxTMI 
TaxTMI 
2017 (1) TMI 884
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....the assessment year 2011-12 vide his order dated 24-01-2014 of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The first issue in this appeal of Revenue is against the order of CIT (A) deleting the addition made by AO by treating the Revenue expenditure as capital amounting to Rs. 32,54,413/-. For this Revenue has raised following ground No.1: - "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) was justified in directing the AO to treat the expenditure of Rs.32,54,413/- as Revenue expenditure without appreciating the fact that the nature of expenditure shown is undoubtedly capital in nature as the expenditure incurred is nothing but replacement or old structure with new structure which is permanen....
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....of steel and cement sheets. These sheets were purchased to protect the existing building and support the existing structure. It is also seen that labour charges of Rs. 2.92,889/-was also paid. Replacement or repair of old walls cannot lead to a conclusion that new capital assets came into existence. I refer here to the decision in the case of New Shorroc Spg. & Mfg. Co.Ltd. v. VIT so ITR 338 (Bom); Addl.CIT v. Desai Bros -.108 ITR 14 (Guj); CIT v. Chowgule & C0. (P) Ltd. 81 Taxman 384/214 ITR 523(Bom); CIT v. Saravana Sp. Mills (P) Ltd. 163 Taxman 201215293 IT'R 201(SC); CIT v. Janakiram Mills Ltd. 275 ITR 403(Madras); CIT v. Madras Auto Service (P) Ltd. 99 Taxman 575 (SC); CIT v. Manohar Lal Him Ltd. 219 Taxman 161; CIT v. Jawahar Mill....
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....ot vice versa. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting proportionate interest of Rs. 5,58,036/out of total disallowance u/s. 14A of Rs. 5,94,435/relying on the decision of the Hon'ble Bombay High Court in the case CIT Vs Reliance Utilities and Power Ltd., without appreciating the fact that the decision is in the context of disallowance of interest expenditure u/s. 36(1)(iii) of the Act and has no direct application for a disallowance u/s. 14A." 6. We have heard rival contention and gone through the facts and circumstance of the case. The facts of the case are that the assessee has earned dividend income of Rs. 1,10,97,653/- and long term capital gain on sale of mutual ....
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....n a presumption would arise that the investments made are out of interest free funds generated or available with the company and if the interest free funds are sufficient as meet the investment then there is no need for disallowing any interest. I find that the appellant company has suo motu disallowance of Rs. 11,11,265/- u/s 14A of the Act. In View of the above, the further disallowance of Rs. 5,94,435/- is restricted to Rs. 36,399/-." Aggrieved Revenue is in second appeal before Tribunal. 7. We have heard rival contentions and after going through the facts, we noticed that the assessee has interest free fund in the balance sheet amounting to Rs. 43.57 crores and investment is amounting to Rs. 25.39 crores. There is presumption t....
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....ves various materials to be blended together and blending process planned during the day and completed within that day and thereafter there is no work in progress at any point of time. The AO estimated the deployment of material for manufacturing of finished goods at 1% and estimated work in progress amounting to Rs. 11,80,812/-. Aggrieved assessee preferred appeal before CIT (A), who deleted the addition made by AO by observing as under: - "I find that the manufacturing process of the appellant company Involves imported material to be blended. In the past assessment years also the appellant-company has never shown work in progress since It never had work in progress in its audited accounts. The AG has not brought any material on record ....
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.... simply furnished the photocopies of visiting cards of the persons to whom the directors have met and the details of travelling agent bill. The assessee had not furnished any e-mail correspondence, invitations, if any, offered by the said foreign parties in support of the said foreign travel. In absence of such details, the business purpose of such foreign travel by merely relying on the copies of visiting cards and copies of travel agent bill was not acceptable to the AO. The argument of the assessee that such foreign travel is to source new suppliers is not maintainable as the majority of purchases shown by the assessee is from Germany, China, UAE, South Korea and the foreign travel expenditures to such places have already been considered....