AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 716
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....ower plant was commercial started." 3. The assessee is a private limited company engaged in manufacturing of Sponge Iron, M.S. Billets and TMT Bars. The return income of the assessee was (-) Rs. 12.67 Crores against which the book profit u/s 115JB shown was of Rs. 6.47 Crores. 4. During the assessment, the assessee could not furnish any confirmation in details in respect of the following three parties: 1. Concast Exim Ltd. Rs. 3,59,06,000 /- 2. Fridon Kikalishvili Rs. 64,46,557/- 3. Aggarwal Coal Corporation Pvt. Ltd. Rs. 4,86,531 /- Hence, it was incumbent upon the Assessing Officer to make addition on account of unproved purchases in the absence of any evidence furnished by the assessee before him. 5. During the First Appellate proceedings, the assessee submitted that these three parties were trade creditors from whom the assessee had purchased raw material in the goods were supplied to them and provided all the documentary evidences. The same have been forwarded to the Assessing Officer and remand report have been sought. 6. We have gone through the order of the ld. CIT (A) wherein the entire issue and the reconciliations have been exami....
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.... Particulars Amount Dr./(Cr.) USD 1 Balance of Fridon in the books of Appellant 6,446,557 2 Custom Duty paid and shown in M/s Fridon Kikalishvili in the Appellant Ledger of books of (a) 13.02.2010 Custom Duly paid by 275,614 (b) 27.03.2010 Custom Duty paid by 816,473 3 Custom Duty on purchase credited in Ledger of M/s Fridon Kikalishvili in the books of Appellant (a) 3.02.2010, Voucher No. FRK-008 (Excise Duty on Purchase) (270,302) (b) 31.03.2010, Voucher (Excise Duty on Purchase) No. FRK-0013 (799,690) Balance as per books of Fridon Kikalishvili (in INR) 6,468,652 Equivalent to USD 138171 c. Reconciliation Statement between balances as on 31.03.2010 as per books of Account of assessee and ACCL/ACCL(s) S. No. Particulars Amount Dr./(Cr.) 1 Balance of ACCL as on 31.03.2010 as per books of Appellant 486,531 2 Difference in Opening balance 7,816,103 2 Balance of Agarwal Transport Corp. Pvt. Ltd. adjusted by party ....
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....ridon Kikalishvili shows that the assessee has stated that the Closing Balance of the assessee in books of M/ s Fridon Kikalishvili as on 31.03.2010 was USD 1,38,171 /- equivalent to Rs. 64,68,652 /- and that the Closing Balance of M/ s Fridon Kikalishvili in the Books of assessee as on 31.03.10 was Rs. 64,46,557 /-. A reconciliation Statement for the reason of difference between balance of assessee and M/ s Fridon Kikalishvili was submitted by the assessee. 12. In view of the entire facts of the case, we hold that no addition is called for on account of purchases from M/s Fridon Kikalishvili. 13. With regard to M/ s Agarwal Coal Corporation Pvt. Ltd. (ACCL), the Closing Balance of the assessee in books of M/s ACCL as on 31.03.10 was Nil, whereas Closing Balance of M/s ACCL in the Books of assessee as on 31.03.10 was Rs. 4,86,531 /-. It was stated that the copy of account for the F.Y. 09-10 shows that a sum of Rs. 73,88,469 /- was the opening credit balance as on 01.04.09, and a total payment of 78,75,000 /- was made to that party by the assessee, and thus, a Debit Balance of Rs. 4,86,531/- was outstanding in the Books of the assessee. 14. On going through the details no a....
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.... Run" should be allowed as Revenue expenditure. The assessee relied upon the judgment of the Hon' ble Supreme Court of India in the case of Commissioner of Income Tax vs. Shri Rama Multi Tech Ltd., 2017(4) TMI 669. 21. There was no dispute that the Power Plant was used for Trial Run from the date of the installation to the date of the start of commercial use. The Assessing Officer has made the disallowance on the Ground that the interest incurred for the period before the commercial starting of the Power Plant had to be disallowed, without taking into account the period for "Trial Run". 22. Heard the arguments of both the parties and perused the material available on record. 23. We have gone through the case law of Shri Rama Multi Tech Ltd (supra) relied upon by the assessee and find that neither the facts of the case nor the ratio laid down in the case are applicable to the instant case. 24. We have gone through the issue with relevance to the allowances claimed in the P&L account whether it be depreciation or capitalization of interest with regard to the "Trial Run" of the unit. 25. In the case of PCIT Vs Larsen & Turbo Ltd., the Hon'ble Court ruled that once t....
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....o conclude that the business had set up. 30. The Co-ordinate Bench of ITAT Kolkata in the case of ACIT v. Paharpur Cooling Towers P. Ltd [TS-5437- ITAT-1992] held that assessee had not only set up its business but also commenced production when it started its trial production and hence allowed the expenses on trial production i.e. after setting up of business but prior to commercial production. 31. We have also gone through the ICDS IX with relation to capitalization of borrowing costs. The main guidelines with regard to the capitalization of borrowing costs are as under: 1. The borrowing costs should be capitalized to an extent to which it is incurred during the reporting period on the borrowed funds, specifically for the purpose of acquisition, construction or production of qualifying asset. 2. The capitalization will commence from the date when the funds have been borrowed, in case funds have been borrowed for the purpose of acquisition, construction or production of qualifying asset. In case of inventory, it will commence from the date, the utilization of borrowed funds have been started. 3. The capitalization of borrowing cost will cease when t....