9911796707
TMI Blog2012 (11) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred in law in deleting the addition of Rs. 1,50,000/- considered by the Assessing Officer as capital expenditure whereas the Assessing Officer has rightly made the addition by holding discrimation between a capital and revenue expenditure in detail vide para 6.3 of the Assessing Officer by reproducing the relevant portion of the judgment of Hon'ble Supreme Court in the case of Assam Bengal Cement Company reported at 27 ITR 34." 2. Ground No. 1 - After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that the assessee has received a sum of Rs. 50.00 lakhs from Jindal Electricals which is shown in the balance sheet as loan. It was further noticed that no interest was paid on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from HUF and was recorded in the balance sheet as liability of unsecured loan. Therefore, the issue was covered by the decision of Hon'ble Punjab & Haryana High Court in case of Saranpal Singh (HUF) (supra) and accordingly he deleted the addition. 5. Before us, the ld. DR for the revenue supported the order of Assessing Officer. 6. On the other hand, the ld. counsel of the assessee submitted that the issue was covered in favour of the assessee because the amount was taken as loan from HUF and was reflected as loan and he referred to page 8 of the paper book which is balance sheet of the assessee's proprietary concern. He also submitted that in any case the loan has been returned in the next year. 7. We have heard the rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. 8. Ground No. 2 - After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that the assessee had claimed a sum of Rs. 1,50,000/- as consultancy charges paid to M/s Jeet Engineering, Baroda. In response to a query initially it was stated that the amount was paid for consultancy of designing the equipment as per specifications of the export order from M/s Surya Minerals Pvt Ltd, Zambia and tax was also deducted @ 11.33%. The assessee was asked that why this expenditure be not treated as capital expenditure. In response it was stated that the amount was basically paid for assistance provided for execution of export order / sales for an amount of Rs. 27,91,000/-. Thus it was claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering the rival submissions we find that the ld. CIT(A) has decided the issue vide para 8 which is as under: "8 I have considered the facts of the case, the basis of Assessing Officer's conclusion and the submissions of the A.R on the issue. It is a matter of fact that an amount of Rs. 1,50,000/- and the same has been confirmed by the recipient to be on account of sourcing, export, installation and not for designing of any equipment. It is also a matter of fact that the appellant has been in the business of manufacturing of rectifiers for very long and similar rectifiers had been supplied to different customers earlier than this sale as well. This only meant that the product in question has been designed in house by the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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