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TMI Blog2010 (10) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... penses. The lack of third party vouchers per se cannot be reason enough for disallowance, but that is precisely the ground on which the CIT(A) has sustained the disallowance. - Claim of these expenditures allowed. commission - the issue is covered in favour of the assessee by the decision of the Tribunal in the case of Smt. Varsha G. Salunke v DCIT,(2005 -TMI - 59416 - ITAT BOMBAY), and, therefore, we see no reasons to interfere in the findings of the CIT (A) in deleting the disallowance of Rs.42,87,733. Accordingly, this ground is dismissed. Loan processing fee -. The processing fees is in the nature of interest and for use of funds borrowed for the purposes of business, and, accordingly, it has to be allowed as deduction under section 36(1)(iii). The limitation under section 37(1) for disallowability of capital expenditure thus is not relevant in the present context. In The Assessing Officer was clearly in error in disallowing the same as capital expenditure, which was not even in the nature of capital expenditure anyway, and the CIT(A) rightly reversed the action of the Assessing Officer. We uphold the action of the CIT(A) and decline to interfere in the matter. - ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is that the relevant deduction could be claimed for the assessment year 2005-06. Aggrieved, the assessee carried the matter in appeal before the CIT (A) but without any success. The CIT (A) was of the view that the deduction could only be claimed in the assessment year 2005-06 and merely because the assessee has not claimed the credit in the said assessment year, the assessee cannot be allowed the deduction in the present assessment year. The assessee is not satisfied and is in further appeal before us. 4. Learned counsel for the assessee contends that while the assessment for the assessment year 2005-06 has become final and in view of the fact as it is stood at the relevant point of time, the assessee has not been able to claim the deduction in the said assessment year, the denial of deduction to the assessee in the present assessment year would result in an undue hardship to the assessee. It is thus prayed that in view of the legal position as it is stood at the relevant point of time, the Assessing Officer should be directed to grant deduction in the current year. He, however, submitted that as long as he is allowed the deduction - whether in this assessment year or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. To be a necessary finding, it must be directly involved in disposal of a case. It is possible that in certain cases, in order to render a finding on 'A', a finding in respect of 'B' is called for........The same principle seems to apply when the question under inquiry is whether an income is taxable in the assessment year under consideration or for any other assessment year...." 8. It is thus clear that the CIT(A)'s finding that payment is not allowable in the assessment year 2006-07 because the same is allowable in the assessment year 2005-06, to which the payment actually pertains, is the kind of 'finding' which is covered by the provisions of section 153(3) of the Act. The scheme of the Act thus permits any assessment, reassessments and recomputation orders to give effect to, or in consequence of, any findings or directions not only in the CIT(A)'s order but also orders of the Tribunal, Hon'ble High Courts, Hon'ble Supreme Court as well as of "any Court" in a proceeding otherwise than in appeal. In other words, where the Assessing officer is required to give effect to any finding or direction in a appellate order giving such effect is not covered by normal time bound pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere. 12. Section 153(3) of the Income-tax Act, 1961 provides that the provisions of section 153(1) and (2) (i.e. the provision laying down the time limit within which assessments, reassessment or recomputations can be done) shall not apply to, inter alia, the classes of assessments, reassessments and recomputations which may be completed at any time where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order, under sections 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. Therefore, to the extent, an assessment, reassessment or recomputation is done to give effect to the 'finding or direction' contained in, inter alia, the Tribunal order, the same can be passed at any time. It is also settled in law that when a statutory authority has the powers to do something, then it has a corresponding duty to exercise such powers whenever circumstances warranting exercise of such powers exist. No doubt, as held by the Hon'ble Supreme Court in the case of Rajinder Nath v. CIT [1970] 120 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 14A. The Assessing Officer computed the amount disallowable at Rs.4,31,987 which was sustained in the first appeal. 14. Before us, learned representatives agree that so far as the question of disallowance u/s.14A is concerned, the issue is now decided in favour of the assessee by the judgment dt.12.8.2010 of the Hon'ble Bombay High Court in the case of Godrej and Boyce Limited vs. ACIT, holding that the provisions of section 14A are applicable in such circumstances and the disallowance has to be worked out by the AO on some reasonable basis. Under such circumstance, and with the consent of the parties, we set aside the impugned order and restore the matter to the file of the AO for deciding the quantum of disallowance as per the aforenoted judgment, after allowing a reasonable opportunity of being heard to the assessee. This ground is allowed for statistical purposes. 15. Ground No. 2 is thus allowed for statistical purposes. 16. Ground No.3 is against adhoc disallowance of 10% being Rs.4,10,789 on account of conveyance, traveling expenses, repairs, stationary, misc. expenses, office expenses and presentation expenses. 17. Briefly stated the facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 is thus dismissed. 29. In Ground No.2, the revenue is aggrieved with the order of the CIT (A) in deleting the addition of Rs.2,42,202 on account of loan processing fee. 30. Briefly stated the facts are that the assessee had claimed an amount of Rs.2,42,202 as loan processing charges in the PandL account of M/a. Maharashtra Traders. The AO noted that the processing charge is paid to Bank of Maharasthra for the loan taken of Rs.3 crores for paying the liability of M/s. Joy International Ltd. The AO disallowed the same observing that such loan processing charge being capital in nature and was not incurred for the business purpose of the assessee. In appeal, the CIT (A) following the Hon'ble Supreme Court judgement's in the case of India Cements Ltd v CIT, 60 ITR 52 (SC), deleted the disallowance made by the AO. 31. Having heard the rival contentions, we see no reasons to interfere with the order of the CIT (A) since the CIT (A) has simply followed the decision of the Hon'ble Supreme Court in the case of India Cements Ltd (supra) in deleting the disallowance. The processing fees is in the nature of interest and for use of funds borrowed for the purposes of business, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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