AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1752
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....,738/-. Similar investment had been made by the assessee in land at Morekarina and Sheikhpura during the financial year 2008-09. The Assessing Officer noticed that the assessee had shown secured loans amounting to Rs. 23.56 crores and unsecured loans amounting to Rs. 10.67 crores, against which interest liability incurred was Rs. 3,25,10,882/-. He also noted that there was capital work-in-progress amounting to Rs. 1,86,95,645/- including the addition made during the year amounting to Rs. 1,02,56,336/-. The Assessing Officer accordingly, held that the interest to the extent of interest on investment in land was not for business purpose and disallowed interest @ 12%. Similar disallowance under section 36 (1) (iii) of the Act was made pertaining to investment in capital work-in-progress also. In this way, total disallowance of Rs. 82,10,154/- was made by the Assessing Officer. 4. Before the learned CIT (Appeals), it was contended that the investment in land and building were made for business purposes and out of own resources. As regards the investment in land at Morekarina and Sheikhpura, it was submitted that the investments were old one and similar disallowances made in assessment....
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....o 12 of the order, which read as under : "9. We have heard the rival contentions and perused the record. We find that similar issue of disallowance under section 36(1)(iii) of the Act on the investment made in the purchase of land arose before the Tribunal in assessee's own case relating to assessment year 2008-09 (supra) and vide order dated 17.01.2013, the Tribunal held as under : "9. We have heard the rival contentions and perused the record. The assessee had made investment totaling Rs. 4.75 crores in the purchase of agricultural land as under: 14/1/2006 Rs.1,50,00,000/- 9/3/2006 Rs. 20,00,000/- 15/2/2007 Rs.2,43,00,000/- 15/2/2007 Rs. 57,00,000/- 11/4/2007 Rs. 5,00,000/- 10. The finding of the CIT (Appeals) vide para 4.1 of the appellate order is that the assessee had furnished the copies of bank accounts reflecting availability of funds on the dates when earlier investments were made and also when payment of Rs. 5 lacs was made during the year. The learned D.R. for the Revenue has not controverted the factual finding of the CIT (Appeals) that the total investment made by the assessee in the earlier years and the sum of Rs. 5 lacs invested dur....
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....yali Kalan and the AO has not mentioned even once that this building was not being constructed by the appellant for his business. That being so, no disallowance on this account can be made u/s 36(l)(iii). The disallowance if at all in these circumstances can be made under proviso to section 36(l)(iii). However, for applying the proviso it has to be shown that the appellant had borrowed funds specifically for capital work-in- progress. The AO has not shown that any funds were borrowed for this purpose. The case of CIT Vs. Abhihsek Industries is not applicable in the circumstances of the case. Disallowance made is accordingly deleted. This ground of appeal is therefore allowed." 12. The ld. DR for the revenue has failed to controvert the findings of Commissioner of Income Tax (Appeals) and in view thereof, we find no merit in the ground of appeal raised by the revenue and the same are dismissed." 7. In view of the above, we do not find any infirmity in the order of the learned CIT (Appeals). As the old investments continue which have been held to be made out of owned funds, as regards the investments made during the year, by the same parity of reasoning, we confirm the order of th....
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....essee submitted that the action of the learned CIT (Appeals) to the extent of confirming the disallowance is as per law. 12. The learned counsel for the assessee relied upon the order of the learned CIT (Appeals) to the extent relief given by him. His submission was that the facts of the case are very clear, since the interest on term loan and packing credit being diriectly relatable to earning the taxable income, it can never be taken into consideration for the purposes of computation under Rule 8D of the Income Tax Rules. Further, it was stated that the learned CIT (Appeals) himself has given relief on the basis of order of the I.T.A.T. in earlier year in assessee's own case. As regards its Cross Objection, there were two contentions. Firstly, the learned counsel for the assessee requested for netting off interest. Reliance was palced on a number of judgment of various Benches of the Tribunal, including that of Chandigarh Bench in the case of Shri Shiv Parshad Aggarwal Vs. ACIT, ITA No.927/Chd/2012, dated 27.3.2014. Secondly, it was argued that in view of the fact that the assessee possess sufficient owned fund to make investments, no disallowance of interest can be made. 13. W....
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....ollowing the order of the Coordinate Bench, we allow this ground of Cross Objection raised by the assessee and direct the Assessing Officer to recompute the disallowance as per the directions given above. The other contention raised by the assessee in its Cross Objection is that since assessee has suo motto disallowed the expenses under section 14A of the Act amounting to Rs. 5,94,638/-, the Assessing Officer cannot make further disallowance on account of expenditure. It is an admitted fact that the assessee itself has disallowed an amount of Rs. 5,94,638/- on account of expenses relatable to earning the tax free income. In such a scenario, the Assessing Officer had to record a satisfaction as to why he is not satisfied with the disallowance so made by the assessee. Under sub-section (2) of section 14A of the Act, the Assessing Officer is required to examine the accounts of the assessee and only when he is not satisfied with the correctness of the claim of the assessee in respect of expenditure in relation to exempt income, he can determine the amount of expenditure which should be disallowed in accordance with the method prescribed, i.e. Rule 8D of the Income Tax Rules. Even....
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....9 on appeal filed by the Department, The Chandigarh Bench of the Tribunal upheld the action of the CIT (Appeals) and deleted the addition. Relying on the order of the Chandigarh Bench in assessee's own case for assessment year 2008-09, the CIT (Appeals) deleted the addition. 19. Aggrieved by the said order of the learned CIT (Appeals), the Department has come up in appeal before us. The learned D.R. relied upon the order of the Assessing Officer, while the learned counsel for the assessee apart from reiterating the submissions made before the lower authorities also drew our attention to the order of the Chandigarh Bench in assessee's own case for assessment year 2009-10, whereby on similar issue the disallowance so made by the Assessing Officer was deleted. 20. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. On perusal of the order of the I.T.A.T., Chandigarh Bench for assessment year 2009-10, we see that on exactly the same issue, the I.T.A.T. dismissed the appeal of the Revenue holding as under : "26. The issue in ground of appeal No. 3 raised by the revenue ag....
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....smitted to Electricity Board as part and parcel of the windmill. The Assessing Officer had allowed depreciation on the same at lower rates. 30. The Mumbai Bench of the Tribunal in Trumac Engineering Co. Pvt. Ltd. Vs. Income Tax Officer (supra) held that transmission lines are part and parcel of the windmill and are entitled to depreciation @ 100%. The CIT (Appeals) while deciding the appeal of the present assessee before us referred to the decision in Trumac Engineering Co. Pvt. Ltd. Vs. Income Tax Officer (supra) and observed as under: "The other judgment cited by the counsel is in the case of Trumac Engineering Company Pvt. Ltd vs. ITO of ITA No. 555/Mum/2003. The issue related to reopening u/s 147 and also to depreciation on the wind mill. As per as reopening was concerned it was decided against the assessee. The other issue were dealt on merits. The assessee had capitalized some of Rs. 42.50 Lakhs being the payment on account of contribution made to GEDA for creation of common sub-station for evacuation of power from wind farm. The AO held the claim of the assessee is not allowable as the payment is not made for creating an asset nor it is owned by the assessee. The assesse....
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....re stored and metered. Since this is the function of transformer upto DP structure, hence ought to be held as an integral part of wind mill and is consequently entitled for higher rate of depreciation. The facts of the case are identical with the facts of the appellant." 32. The Ahmedabad Bench of the Tribunal in ACIT(OSD) Vs. Parry Engineering & Electronics P. Ltd. in ITA No.3317/Ahd/2011 with C.O.No.44/Ahd/2012 held as under : "4. We have considered rival submissions and perused the orders of the AO and the CIT(A). The depreciation is allowable on renewable energy device which also includes windmill. The depreciation at the rate of 80% is allowable on the entire device which is capable of generating electricity using wind energy. There is no provision in the Act to bifurcate the device into several parts and allow depreciation thereon at different rates of depreciation. The foundation, civil and electrical works are necessary for the installation of the windmill and is clearly part and parcel of the windmill project on which depreciation at the rate of 80% is allowable. The CIT(A) has referred to the decisions of the High Courts while deciding the issue in favour of the asses....