TaxTMI 
TaxTMI 
2018 (6) TMI 1180
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....DV of the said block of assets after considering the order recorded sales of scrap of Rs. 1.50 croes, Rs. 79.23 lakh and Rs. 47.38 lakh and thereafter reduce Rs. 10247738/- from WDV of the block of assets and allow depreciation accordingly. 3. On the facts and circumstances of the case, the ld CIT(A) erred in law in deleting the addition of Rs. 11200000/- made by the AO on account of payment of loan processing fee. 4. On the facts and circumstances of the case, the ld CIT(A) erred in law in deleting the addition of Rs. 1053863/- made by AO u/s 14A of the Income Tax Act, 1961." 2. The brief facts of the case shows that search was conducted in the group cases of Suresh Nanda on 28/2/2007 and it included the premises of the assessee also. Further search was also conducted in the office and business premises of Mr. Bipin Shah on the same date. During the course of search, statement had been recorded of Mr. Bipin Shah in his individual capacity. Impugned addition has been made on basis of that statement in the hands of the Assessee. The original assessment was passed on 31/12/2008 by the Ld. assessing officer wherein the sum of Rs. 25 crore was added as unexplained cash under se....
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.... account of undisclosed sale of scrap. However, he held that the above sum shall be reduced from the part of the block of fixed assets and depreciation on the balance written down value of the block would be allowable to the appellant. Further with respect to the loan processing fee of Rs. 1.12 crore paid by the assessee to the state bank of India , he held that coordinate bench has set aside the matter for the purpose of verification that assessee paid it in respect of disbursement of loan of state bank of India. He held that as assessee established that, same to be allowed. Therefore he held that as the Ld. assessing officer has not brought on record any adverse material so as to suggest that the loan was not utilized for the purpose of the business contrary to the finding of the Ld. CIT in his earlier order as well as the order of the coordinate bench that the utilization of loan was for the purpose of the business of the appellant, therefore he deleted the disallowance of the above sum. He also deleted the disallowance u/s 14A of the act, as the assessee has not recorded any satisfaction with respect to the provisions of subsection to of section 14A of the income tax act with r....
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....d that assessee has fulfilled the direction of the coordinate bench and based on that the Ld. CIT - A has allowed the above claim. With respect to the disallowance under section 14 A of the income tax act he submitted that when the AO has not recorded any satisfaction with respect to the claim of the assessee the disallowance under section 14 A cannot be made. In view of this he submitted that the order of the Ld. CIT - A may be found. 7. We have carefully considered the rival contentions as well as perused the orders of the lower authorities. We have also perused the order of the coordinate bench. 8. Ground No. 1 of the appeal of the revenue is general in nature and therefore it is dismissed. 9. Coming to the 2nd ground of appeal wherein the revenue is aggrieved with the direction of the Ld. CIT that the sale of scrap should be adjusted against the written down value of the block of asset is concerned, assessee has submitted that scrap sale of these 1.50 crore is sale of scrap M/s IB enterprises which is only a sale of scrap and reduced from the written down value of respective block of assets and accordingly claimed lower depreciation as per the income tax act. The assessee's ....
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....lso confirmed that assessee has paid on 27/11/2006 loan processing fee toward sanction of loan of Rs. 90 crores and the processing fee was charged of Rs. 1.12 crores. However, the Ld. assessing officer was of the view that assessee failed to correlate the use of loan for which this loanprocessing fee below was paid, therefore he disallowed the same. On appeal before the Ld. CIT - A he deleted the disallowance. 11. The Ld. departmental representative relied upon the order of the Ld. assessing officer whereas the Ld. authorized representative relied upon the order of the Ld. CIT - A. 12. We have carefully considered the rival contentions and perused the order of the lower authorities. In the present case, the assessee has undisputedly paid the amount of Rs. 1.12 crores as a loan-processing fee to state bank of India for obtaining a term loan of Rs. 90 crores for the purpose of the business of the appellant. The revenue did not show it at any time that this sum of Rs. 90 crores has not been used for the purposes of the business by the assessee. The assessee produced the enough evidence before the Ld. assessing officer about the claim of the above expenditure. The Ld. AO further enqu....