9911796707
TMI Blog2002 (8) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the orders of both the lower authorities in respect of the ground of appeal, we find that the AO has observed from the balance sheet of the assessee that the assessee has shown liability of Rs. 3,96,86,822 as undisbursed subsidy. The AO further noted that the said amount consisted of capital subsidy of Rs. 2,41,05,155 and Rs. 1,55,81,667 on account of subsidies which were revenue in nature. The AO rejected the explanation of the assessee that these amounts were received from the Government for distribution to the persons approved by the Government Department. As the assessee has received the amount as an agent only, the same was not its income. According to the AO, the assessee ought to have credited the amount of undisbursed revenue subsidy in its P L a/c. Hence, he added Rs. 1,55,81,667 to the income of the assessee. The CIT(A) found that the Government of Assam vide letter No. 149/69/Pt. 4 dt. 8th Feb., 1974, appointed the assessee as disbursing agent for subsidy under two schemes which are: (1) 10 per cent Central Subsidy Scheme and (2) Transport Subsidy Scheme. In addition the Government of Assam vide its industrial policies also appointed the assessee as the implementing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility on account of CTD Rs. 2,080 and amount payable on account of fixed assets (furniture) Rs. 3,023 both totalling to Rs. 5,103 are not allowable. We find that these amounts were not debited to P L a/c and hence question of its allowability or otherwise does not arise. Further, no material was brought on record by the Revenue to show that these were fictitious liabilities. Hence, in our considered opinion the CIT(A) was not justified in sustaining the addition of Rs. 5,103. Thus, the appeal of the Revenue in respect of this ground of appeal is dismissed and the CO of the assessee so far relating to this ground of appeal is allowed. 6. In the cross-objection No. 24/Gau/1997 the only other ground taken by the assessee is against the confirmation of disallowance of Rs. 4,000 by the CIT(A) under the head donation and subscription . The CIT(A) has observed that Rs. 4,000 was incurred by the assessee on account of Viswakarma Puja and is not relatable to the business of the assessee. We find that no material is brought on record by the assessee to show that the above expenses were incurred out of commercial expediency. Hence, we would not like to interfere with order of the CIT(A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 2.44 crores on the amounts borrowed by it and as the interest-free advance in question was not given for the purpose of business of the assessee, he disallowed interest thereon @ 14 per cent which worked out to Rs. 7,14,000. The CIT(A) found that there was loss of income in this transaction to the assessee, but the transaction has not affected the interest expenses claimed by the assessee since the assessee has not diverted any interest-bearing loan funds for the purpose of advancing the loans to the said Assam Tea Corporation. He also observed from the balance sheet of the assessee that the total interest-bearing loans received by the assessee together with the accrued interest amounts to Rs. 49.79 lakhs and the income yielding loans and investments together with interest receivable was Rs. 66.70 lakhs. Thus, he found that the interest-bearing loans were not utilised for making interest-free advance to M/s ATC. He also observed that on the facts of the case, it may be contended that the assessee could have put such funds to more profitable use but this contention cannot be accepted since how the assessee runs its business is not for the AO to decide. The scope of inquiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier years by the assessee and Rs. 3,06,07,518 advanced during the previous year relevant to the assessment year under consideration. Further the assessee has in earlier years advanced Rs. 26 lakhs towards share capital in the said PBSL out of which as per PBSL shares of Rs. 700 only was issued and the balance of Rs. 25,99,300 was kept as advance. No interest was charged by the assessee on the above advances given by it to the said PBSL. Hence, the AO disallowed interest of Rs. 76,01,083 relating to the advance of Rs. 4,34,67,869 and Rs. 25,99,300 advanced by the assessee in earlier years and Rs. 7,54,705 relating to the advance made by the assessee during the year under consideration. Thus, the total disallowance of Rs. 83,55,788 (Rs. 76,01,083 + Rs. 7,54,705) was made by the AO. The CIT(A) has observed that in his order for the asst. yr. 1990-91 he found that the source of advance by the assessee of Rs. 4,34,67,869 and Rs. 25,99,300 in the earlier years were out of non-interest-bearing fund of Rs. 4,61,00,000 made available to the assessee by the Government of Assam and no interest on the above fund was charged by the Government of Assam w.e.f., 30th Sept., 1989. Hence, following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the AO. Assessee s third ground of appeal relates to a similar issue wherein the assessee has objected against the sustenance of the addition of Rs. 3,55,262.50, by the CIT(A). Thus, both the grounds are taken up together for adjudication. The brief facts of the case are that the assessee has shown in its books of account Rs. 7,41,38,387.25 as advance to PBSL. The assessee has filed a copy of confirmation received from the said PBSL before the AO. From the said confirmation, it transpired that the said PBSL in its books of account had shown Rs.7,77,86,419.27 as advance received from the assessee. Thus, there was a difference of Rs. 36,48,032. The assessee explained the above difference as under: Rs. Rs. (a) Shown as investment in shares by the assessee but shown in the advance account by PBSL 26,00,000 (b) Difference in pending balance to be reconciled : Advance shown by PBSL as on 31.3.1990 4,67,60,638 Advance shown by the assessee as on 31.3.2000 4,34,67,868 6,92,770 (c) difference dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence thus found out will show that whether there is any undisclosed investment or not. In the instant case, the lower authorities have not obtained any clarification from the PBSL and no material was brought on record to show that the difference was only on account of investment made by the assessee during the year. Since material facts are not on record which contributed to the said difference, it will be just and fair to set aside the orders of the lower authorities and remand the issue back to the file of the AO. The AO is directed to decide the issue afresh in the light of observations made hereinbefore after allowing sufficient opportunity of hearing to the assessee. Thus, these grounds of appeal of the Revenue as well as of the assessee are allowed for statistical purposes. 18. Coming to the appeal of the assessee, the first ground of appeal relates to the disallowance of expenses of Rs. 2,28,791 under the head "Silver Jubilee expenses". The AO disallowed the amount as details of the expenses incurred under this head were not filed before him so as to enable him to ascertain that the same were business expenses. The CIT(A) confirmed the above disallowance. Before us it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee with reference to receipts said to have been issued by the said committee. Thus, this ground of appeal of the assessee is allowed for statistical purposes. 20. The second ground of appeal of the assessee is directed against the disallowance of Rs. 1,79,722 under the head 'Udyog Sahayak'. The assessee has acted as an agent of the Government in promoting the industrialization of the State of Assam. As per the Industrial policy of the Government of Assam, the assessee was appointed as an implementing agency. The assessee-company was to implement various programmes like disbursement of subsidy, training of entrepreneurs, etc. through a window called Udyog Sahayak. The expenditure incurred under this head is normally reimbursed by the Government of Assam to the assessee. But, during the year, the expenditure under this head exceeded the budget of the Government of Assam and the assessee could not get reimbursement of the above expenditure to the tune of Rs. 1,79,722. The assessee by acting as an implementing agency received interest-free funds from the Government of Assam and before utilising the same in the intervening period, the Government allowed the assessee-company to earn ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
