2019 (5) TMI 287

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....e Assessing Officer u/s. 143(3) of the Income-Tax Act, 1961 (in short, the Act),dated 11-01-2013. 2. Grounds of appeal raised by the assessee are as follows:- 1. For that the orders passed by the lower authorities are arbitrary, erroneous. without proper reasons, invalid and bad-in-law, to the extent to which they are prejudicial to the interests of the appellant. 2. For that the Ld. CIT (A) ought not to have confirmed the disallowance of Rs. 3,87,322/- claimed on 'account of depreciation. 3. For that the Ld. CIT CA) ought to have appreciated the facts of the case relating to disallowance of Rs. 50,16,609/- made by the A.O. under the Sec.36(1) (iii) of the Act and should have deleted the disallowance. ....

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....2009 to 31/03/2010. The manufacturing activities being in full stream from 01/08/2009 the same has been reckoned as the date of commencement of production at Bellary Unit". 6. The ld. AO noticed that the capital work in progress is Rs. 12,86,89,456/-. The assesse has Total Assets amounting to Rs. 113,00,79,409/-. The interest debited by the assesse in the P & L A/c is Rs. 4,40,53,073. The interest allocable on account of capital work in progress was worked out by AO as follows:- Interest debited to the P & L A/c x capital work in progress = Rs. 4,40,53,073 x 12,86,89,456 Total Assets 113,00,79,409 Interest allocated for capital work in progress = Rs. 50,16,609/- Therefore, an amount of Rs. 50,16,609/- was....

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....ount 06.08.2009 23,07,787/- 12.25% 238 1,84,338/- 15.08.2009 10,39,958/- 12.25% 229 79,927/- 27.08.2009 8,05,663/- 12.50% 217 59,873/- 26.09.2009 5,48,246/- 12.50% 187 35,110/- 26.09.2009 15,00,000/- 12.50% 187 96,062/- 26.09.2009 4,87,890/- 12.50% 187 31,245/- 08.10.2009 35,53,124/- 12.50% 175 2,12,944/- 12.10.2009 1,15,00,000/- 12.50% 171 6,73,459/- 24.03.2010 5,05,00,000/- 12.50% 8 1,38,356/-         15,11,314/- The aforesaid submissions and the working which has been made out with reference to the accounts duly examined by the AO would indicate the facts so far as th....

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....03.2010 and the interest of Rs. 15.11 lakhs on this portion is charged to revenue. In worst case the amount which can be disallowed towards interest on capital WIP (work in progress) is to be Rs. 15.11 lakhs only. Therefore, we are of the view that balance loan amount of Rs. 7.12 crore, which was disbursed between 1.8.09 to 31.03.10 and interest on such loan of Rs. 15.11 lakh needs to be verified by AO, whether it falls in revenue zone or capital zone. Assessee treated Rs. 15.11 lakh as revenue expenditure. If this interest of Rs. 15.11 lakh is before put to use an asset, then it may be capitalized. Otherwise, it would be revenue expenditure. Therefore, AO should examine this factual aspect and to adjudicate the issue in accordance to law. ....