2019 (1) TMI 198

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....1)/Kol dated 14.06.2017 against the common order passed by the ACIT, Circle-11, Kolkata [ in short the ld AO] under section 254 / 143(3) of the Income Tax Act, 1961 (in short "the Act") dated 31.03.2006 for the Assessment Years 1996-97 & 1997-98 respectively. Both these appeals are taken together and disposed off by this common order for the sake of convenience. 2. DISALLOWANCE U/S 43B OF THE ACT Ground No. 1 of Assessee Appeal for Asst Year 1996-97 The brief facts are that the assessee submitted its return of income for the Asst Year 1996-97 on 29.11.1996 declaring total loss of Rs. 2,63,38,975/-. The scrutiny assessment was completed u/s 143(3) of the Act determining total loss at Rs. 96,71,857/- making various disallowances / ad....

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....1) of the Act so as to make it allowable u/s 43B of the Act in the year under consideration itself or in subsequent years. Accordingly, disallowance of Rs. 52,43,000/- was made u/s 43B of the Act towards excise duty on closing stock of finished goods by the ld AO. This was upheld by the ld CITA. Aggrieved, the assessee is in appeal before us. 2.1. We have heard the rival submissions. At the outset, we find that the entire disallowance has been triggered based on the observations made by the tax auditor in the tax audit report. We find that the tax auditor had duly observed that the assessee had not provided for excise duty on closing stock of finished goods, meaning thereby, no debit to profit and loss account has been made for the same.....

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.... The brief facts of this issue are that the ld AO observed that during the relevant Asst Year, the assesee company had claimed depreciation for Rs. 22,50,396/-. On perusal of the record, it appears that during the relevant period, only three units of the company remained in operation and all other units remained closed. He observed that as per provisions of section 32 of the Act, depreciation is allowable on fixed assets which were put to use during the relevant period. Since during the previous year, only three units of the assessee company were in operaetion, hence in absence of details, 50% of depreciation claimed was disallowed in the sum of Rs. 11,25,198/- by the ld AO. The ld CITA observed that though depreciation is allowable on bl....

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.... this issue and hence the grounds raised by the revenue in this regard are not maintainable. Accordingly, the grounds raised by the assessee in this regard are allowed and grounds of the revenue are dismissed as not maintainable in this regard. 4. DISALLOWANCE OF MISCELLANEOUS EXPENSES - Rs. 100.99 lakhs Ground Nos. I & II of Revenue Appeal for Asst Year 1996-97 The brief facts of this issue are that the ld AO observed that under the head 'other operating expenses' the assessee company had debited miscellaneous expenses of Rs. 277.38 lakhs. The ld AO observed that miscellaneous expenses includes printing charges for Rs. 108.75 lakhs which appears to be very abnormally high in nature. No supporting documents / evidences were produce....

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....lly very high. It was argued that since the assessee is already declared as a sick industrial company and most of its units are closed , the papers containing documents and evidences are dislocated and hence the evidences could not be furnished before the ld AO. We find that the ld CITA had taken due cognizance of the same and had deleted the disallowance of miscellaneous expenses on an estimated basis , which requires no interference. Accordingly, the Grounds I & II raised by the revenue for Asst Year 1996-97 are dismissed. 5. DISALLOWANCE OF LEGAL & PROFESSIONAL EXPENSES - Rs. 9,87,014/- Ground No. 2 of Assessee Appeal for Asst Year 1997-98 The brief facts of this issue are that the assessee company debited a sum of Rs. 31,72,....