2018 (6) TMI 1459

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...., resins and chemicals, filed its return of income on 18. 09. 2012 declaring total income of Rs. 14. 80 crores. The AO completed the assessment u/s. 143(3) of the Act, on 31. 03. 2015 determining its income at 15. 31 crores. 2. First ground of appeal is about treating the expenditure of Rs. 11. 23 lacs as revenue expenditure. It was agreed by the representatives of both the sides that the issue stands covered by the order of the Tribunal (ITA 1725/Mum/2015 & ITA 1028/Mum/2015-A. Y. 2011-12, dated 15. 11. 2016). We are reproducing the relevant portion of said order and it reads as under para 2 to 7 copy. "2. The first issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by Assessing Officer by....

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....ly in the nature of Capital and accordingly, disallowed the entire expense of Rs. 32, 54, 413/- and allowed depreciation as per applicable rates. Aggrieved assessee preferred appeal before CIT(A). The CIT(A) deleted the addition and held the expenditure as Revenue in nature by observing as under:- "5. I find that the appellant company has incurred expenditure of Rs. 25, 84, 047/- for repairs of existing factory building at Vapi to strengthen the beam of the existing building. Similarly, Rs. 3, 48, 125/- was spent on repair of the boundary wall at Nashik factory. It is also found that Rs. 16, 32, 302/- was spent on purchase of steel and cement sheets. These sheets were purchased to protect the existing building and support the exist....

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....d of appeal is about deleting the addition of Rs. 12. 66 lacs being work in progress. The Authorised Representative (AR) & the Departmental Representative (DR) agreed that while adjudicating the appeal for the year 2011-12(supra) the Tribunal has dealt with the issue at para no. 8 to 10:- 8. The next Issue in this appeal of Revenue is against the order of CIT (A) deleting the addition made by AO being work-in-progress amounting to Rs. 11, 80, 812/-. For this Revenue has raised following ground No. 4: "4. Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) was justified in deleting the Addition made by the A. O. of Rs. 11, 80, 812/- being work in progress without appreciating the fact that the ass....

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....g of the AO that "not having any raw material/semifinished goods in the machinery itself in the manufacturing process at any particular point of time cannot be ruled out" is not based on any reasoning. Therefore, the adhoc disallowance of 1% of raw materials deployed for manufacturing of finished goods which has been made by the (AC) and which comes to Rs. 11, 80, 812/- is deleted. " Aggrieved Revenue is in second appeal before Tribunal. 10. We have considered the submissions of both the sides and find that the AO has made adhoc disallowance of 1% on raw material and CIT (A) deleted the same as there is no evidence. We find no infirmity in the order of CIT (A) and hence deletion is confirmed. This issue of Revenue's appeal....

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....s of the Assessee Company. A statement showing complete details in respect of foreign travel containing names the person, place of visi t , purpose of visi t and expenses spent on every individual trip is enclosed. From the details you will observe that Z 13, 24, 804/- was spent on seven foreign trips of Mr. Arvind Kapoor and Mr. Aditya Kapoor who travelled to Seoul, South Korea where the Assessee Company's principal i. e. Kumho Petrochemicals Co. Ltd is located. The Assessee Company is an official indenting agent of the said Korea Company from whom the company has received almost Z 17 crore as indenting commission which has been offered to tax. Directors are required to visit principals office to hold discussions on m....

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....d. Thus, the trip to Sau Paulo, Brazil was wholly and exclusively for the purpose of business of the Assessee Company. Rs.2, 49, 565/- was incurred on trip to Frankfurt, Amsterdam was again incurred on Mr. Arvind Kapoor who visited Frankfurt Amsterdam to meet business associates and to explore business opportunity. Rs.1, 88, 098/- was incurred on trip to Hong Kong was to attend Forbes Award Ceremony. Rs.44, 606/- on USA trip of Mr. Aditya Kapoor was spent was related to exploring new business and to understand various new products relating to business in which the Assessee Company is engaged. Similarly, Rs.58, 485/- was spent on trip to Srilanka where Senior Execut ives Jaykumar Ruparel visited to meet th....