9911796707
TMI Blog2013 (6) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... time it is also a fact that scheme as well as calculation of interest etc. was not available before the Assessing Officer - set aside the order of the ld. CIT(A) and restore the matter to the file of AO to decide then issue after going through the documents filed by way of additional evidence. In favour of assessee for statistical purposes. Disallowance of general charges - Held that:- This expenditure cannot be treated as revenue expenditure. Money was paid towards extension charges to HUDA for non construction of the building. At best it can be called "improvement of asset" i.e. the appreciation in the value of land because Bank seems to retain the land without committing the funds towards building to realize appreciation in the land. Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the revenue opposed the submissions of the ld. counsel of the assessee. 5. After considering the rival submissions we are satisfied that these documents referred to in the application dated 13.5.2013 mainly consist of OTS scheme, balance sheet and detail of interest waived are relevant for adjudication of the issue and accordingly the same are admitted. 6. After hearing both the parties we find that during assessment proceedings the AO noticed that the assessee has claimed expenditure relating to one time settlement of Rs. 10 crores. On enquiry it was explained that this is interest liability on the loans advanced to the Primary Agricultural Cooperative Societies (in short PACS) which was written off as per the scheme announced by the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. There is no time frame for meeting this liability nor are the benefits accruing the to the cooperative credit structure restricted to the current year alone. It is therefore, directed the excess liability of 15% over and above 15% proposed by the bank amounting to Rs. 9,98,75,649.049 (say Rs. 10 crorer) be accounted for in the year 2008-09 instead of the current year i.e. 2007-08." On the basis of above note, a sum of Rs. 10 crore was not allowed as expenditure. On appeal, the action of the Assessing Officer was confirmed by the ld. CIT(A). 7. Before us, the ld. counsel of the assessee referred to the scheme and submitted that Government announced relief by way of one time settlement of interest on the loans which was over due on 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounting treatment given by the assessee in the books of account. 9.1. Hon'ble Supreme Court in case of Kedarnath Jute Manufacturing Co. Ltd. V CIT (supra) has observed as under:- "whether the assessee is entitled to a particular deduction or not will depend on the provisions of law relating thereto and not on the view which the assessee might take of his rights; nor can the existence or absence of entries in his books of account be decisive or conclusive in the matter." 9.2 Similarly in case of Sutlej Cotton Mills Ltd. V CIT (1979) 116 ITR 1 (S.C) it was observed as under: "It is now well settled that the way in which entries are made by an assessee in his books of account is not determinative of the question whether the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture, it was submitted that Bank paid this amount to HUDA as extension charges due to delay in construction. Some case law was also cited. The Assessing Officer was of the opinion that this amount is of capital nature and accordingly the same was held to be capital expenditure. 11. On appeal it was mainly stated that normally capital expenditure would refer to those expenses which leads to creation of fix assets or increasing of capacity. Since no capacity has been increased the same should be treated as revenue expenditure. 12. The ld. CIT(A) on examination of the submissions, did not find merit and confirmed the addition. 13. Before us, the ld. counsel of the assessee reiterated the submissions made before the ld. CIT(A). 14. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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