2020 (4) TMI 588

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....14A(3) of the I.T. Act by applying Rule 8D(2)(ii) & 8D(2)(iii) I.T. Rules being expenditure relatable to income not includable in total income." 2. "Whether on the facts and in the circumstances of the case, Ld. CIT(A) was right in law in deleting the disallowance of Rs. 27,82,055/- which was made by the AO as per provisions of section 36(l)(iii) of the I.T. Act being interest for the period from the date of payment to the date of assets put to use is to be capitalized." 3. "Whether on the facts and in the circumstances of the case, Ld. CIT(A) was right in law in deleting the disallowance of Rs. 2,16,56,114/- out of total disallowance of Rs. 9,49,96,740/-which was made by the AO on the account of difference in Gross Profit". 4. The ap....

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....2 relates to the deletion of the disallowance of Rs. 2782055/-. 9. While scrutinizing the balance sheet the AO noticed that the assessee has shown advance of Rs. 23183794/- to M/s. D. K. Buildcom Private Limited. The assessee explained that the said advance was given for the construction of a building which has been completed and put to use in earlier financial years. The AO was of the opinion that the amount of Rs. 23183794/- has been given as advance out of interest bearing funds and the assessee has not established with any documentary evidence that the building allegedly constructed by the said party has been actual put to use in earlier years. The AO proceeded by computing proportionate disallowance of interest @ 12% and made addition....

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....al; therefore this ground of appeal is rejected. Accordingly, Ground No.3 is thus dismissed." Thus, the facts being absolutely identical in this appeal, Ground No. 4 of the appellant is allowed. 12. It can be seen from the aforementioned finding of the CIT(A), the finding is totally irrelevant to the issue agitated before the CIT(A). Therefore, in the interest of justice and fair play we restore this issue to the files of the CIT(A) with a direction that the CIT(A) shall decide this issue in true perspective of the underlying facts in the issue after giving a reasonable opportunity of being heard to the assessee. 13. Ground No.2 is treated as allowed for statistical purpose. 14. Ground No.3 relate to the deletion of the disallowance of....

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....nt proceedings. The same have also been examined by the AO as evident from the assessment order. However, the AO while rejecting the contention of the appellant has not provided any cogent reasons for the same. Thus keeping of these facts and perspective, I find merits in the arguments of the appellant and thus this particular addition I/"' made by the AO is deleted. 29 In Para 7.4 of the assessment order, the AO has made an ad-hoc disallowance of Rs. 80,00,000/- from the wage expenses. Perusal of the assessment order reveals that the AO has observed that the personal expenses have in fact decreased vis-a-vis the sales as compared to the earlier years. From the submissions of the appellant, it is seen that from Financial Year 2009-10 ....