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TMI Blog2013 (3) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the claim made by the assessee with reference to his view of the material on record. However, the CIT(A) disagreed with the findings of the AO after analyzing the material on record and also after referring to the ground realities as well as obvious inconsistencies in the order of the AO. Then, the Tribunal found no reason to interfere while proceeding on relevant considerations. The matter essentially related to the facts but the approach of the AO could not have been approved when the same had been either too theoretical or carried obvious inconsistencies like total disallowance of the claim towards labour payment despite there being addition to the factory building during the period in question. Thus the findings on facts have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer of fertilizers. The assessee filed its return for the assessment year 2005-06 declaring income as nil . Thereafter, the return was revised declaring a loss of Rs.3,79,286/-. The AO proceeded to complete the assessment by the questioned order dated 28.12.2007. The assessee, inter alia, claimed that there had been addition in the factory building to the tune of Rs.2,50,08,048/- . The AO asked the assessee to furnish the details and also issued notices to several of the parties referred to in the bills and the books of accounts. The AO, while referring to various alleged shortcomings, lacunae and ambiguities in the bills/vouchers, proceeded to exclude an amount of Rs.46,81,086/- as claimed to be of labour payment; another sum of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heory part while devoting much of the time in collecting and analyzing the bills/vouchers/wage-sheets and even the aspect of ratio of the building material, masons and labourers. The learned CIT(A) also found the AO not correct in appreciation of the statements of the material suppliers. The CIT(A) also found that every item of purchase, payment, transportation, receipt etc. was recorded properly in the books of accounts and the AO had nowhere pointed out any defect in such books. The CIT(A), therefore, did not approve of disallowance made by the AO with reference to some procedural irregularities and presumptions. The CIT(A) also indicated about the obvious flaws in the AO s approach where total labour payment was disallowed, which would p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance out of depreciation on building has already been deleted, here also the same facts involved, the disallowance of interest is also deleted. In the department s appeal against the order so passed by the CIT(A), the Tribunal found that the CIT(A) had considered the relevant aspects minutely before accepting the claim of the assessee; and found no reason to interfere. The Tribunal also indicated that it had not been the case of the department that the assessee had shown excessive valuation of the factory building. It was further found that the bank loan had been obtained for addition to the building or purchasing machinery; and complete vouchers had been furnished before the bank; and yet further, there was no material differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the Bank for satisfying the bank for taking loan. Valuation has also been obtained by the assesee. there was no major difference between the value adopted by the valuer or the expenditure shown by assessee in its books of account. In view of these facts and circumstances, we confirm the order of ld. CIT (A) on this issue. 9. Interest is a consequential to the main ground as interest paid by assessee was paid on borrowed amount from bank which is allowable as business expenditure. The CIT (A) has allowed the same. Accordingly we confirm the order of ld. CIT (A) on this issue also. Seeking to question the order of the Tribunal, it is contended that the AO ordered disallowance after deep scrutiny of the material placed before him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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