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TMI Blog2002 (4) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed by the Assessing Officer." 2. Additional ground taken by the revenue and admitted by the Bench is stated as under:-- "2.The learned CIT(A) has further erred both in law and on facts of the case in allowing assessee's claim of deduction under section 32 disregarding the facts that the Bank overdraft had been utilised for the purpose of machinery and the assessee had not utilised any funds from his own sources." 3. The relevant and material facts for the disposal of these grounds of appeals are that the Assessing Officer made disallowance of the claim of the assessee amounting to Rs. 1244888 under section 32AB of the Income-tax Act for the reason that the assessee has not utilised any amount from its own sources for the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her shows that investment in machinery was not made from the available sources of the company but by taking loans by raising the same from the overdraft account. In view of the above facts, it is clear that deduction under section 32AB was rightly disallowed." 5. Whereas on appeal before the CIT(A) the assessee in the written submissions contended as under:-- "We have made claim for Rs. 1213597 under section 32AB. Although the said claim has been deducted out of total income of the company, but pertains to combing unit the basis of the claim are as under:-- Total machinery purchased in the combing unit during the period from 1-7-1987 to 31-3-1989 1,31,62,726.00 Less non eligible machinery 25,22,853.00 1,06,39,873.00 Less Term loan t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Financial institutions and the assessee's claim of depreciation on machinery amounting to Rs. 91.589 lakhs, was only notional and hence cash flow statement of the assessee was worked out before deducting the depreciation. Lastly according to the learned AR for the assessee, since the funds for making purchases of machinery were available from profits earned by the assessee, so the Assessing Officer was not justified in making the disallowance. 7. Ld. CIT(A) on considering the detailed arguments advanced on behalf of the assessee and by the Assessing Officer, before her, allowed the appeal of the assessee by making following observations in her order :-- "Considering the facts of the case it is seen that assessee's claim is only 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has sufficient funds available from its own profits in making the impugned purchases of machinery, so the CIT(A) has rightly allowed the assessee's claim made under section 32AB. 11. On considering the rival submissions of both the parties, perusing the records and carefully going through the orders of tax authorities below. We are of the opinion that it is not very material whether the Assessing Officer conceded or not before the CIT(A) that the funds were available to the assessee for purchase of the machinery from the profits earned by the assessee-company because we would like to factually examine this point in this order instead of relying upon the observation of the CIT(A) while deciding this appeal. 12. In this case the cash f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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