2018 (10) TMI 589 - RAJASTHAN HIGH COURT

Disallowance of interest - investment made in the 100% subsidiary companies - proof of commercial expediency warranting no interest disallowance - Held that:- In view of concurrent finding of both the authorities and in view of the fact that 86,08,460/- deduction which was allowed by the CIT (A) after following the detail reasoning and the matter was remitted to verify the accounts, in that view of the matter, the first question is answered in favour of assessee against the Department.

The funds borrowed to the extent which was from their own fund, interest is required to be deducted in view of the judgment of Supreme Court in Godrej & Boyce Manufacturing Company Ltd. [2017 (5) TMI 403 - SUPREME COURT OF INDIA] relied on by Mr. Sanjay Jhanwar. - Decided in favour of assessee.

Education cess as a disallowable expenditure u/s 40(a)(ii) - Held that:- In view of the circular of CBDT No. 91/58/66 ITJ (19), dated May 18, 1967 where word "Cess" is deleted, in our considered opinion, the tribunal has committed an error in not accepting the contention of the assessee. Apart from the Supreme Court decision M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT OF INDIA] referred that assessment year is independent and word Cess has been rightly interpreted by the Supreme Court that the Cess is not tax in that view of the matter, we are of the considered opinion that the view taken by the tribunal on issue is required to be reversed and the said issue is answered in favour of the assessee.

Disallowing deduction on account of Capital expenses claimed against the sale of mining rights and not reducing the short-term capital gains - Held that:- For the assessment year 2004-05, it was stated that the same is not revenue expenses then for the relevant year, in our considered opinion, the CIT(A) has rightly accepted the details that payment has been made through cheque and the same has been reflected by the assessee in the balance sheet, merely on that ground the expenses cannot be disallowed since for earlier year it was accepted as capital expenses and capital gains, the issue ought to have been decided in favour of the assessee.