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TMI Blog2013 (10) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of new product - Services of Dr. Dilip Sanvordekar have been utilized for the purposes of assessee's business. It is also not in dispute that the payments made by the assessee are genuine. As per the record, it is seen that and which has also been accepted by the A.O. that the services of Dr. Dilip Sanvordekar, Consultant have been utilized for some projects which are part of assessee's running business. Valuation of stock - addition on account of cenvat credit - Held that:- The A.O. gave a finding that the opening stock for the year under consideration stands increased by the said amount. According to the A.O., after giving credit for the said increase, the net addition on account of unutilized Cenvat credit amounts to Rs. 24,05,558/-. Since the A.O. has himself given a categorical finding in the assessment order which is identical to the directions given by the ld. CIT(A), we do not find any reason why the Revenue has shown its grievance on this account. The A.O. is directed to follow his finding given in the assessment order and restrict the disallowance to Rs. 24,05,558/-. - I.T.A. No. 5641/Mum/2011, I.T.A. No. 5676/Mum/2011 - - - Dated:- 29-5-2013 - Shri H. L. Karw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly direct the A.O. to allow the claim of the assessee of Rs. 46,429/-. Ground No. 1 is accordingly allowed. 6. Ground No. 3 relates to the disallowance of Rs. 3,79,249/- made by the A.O. and confirmed by the ld. CIT(A) on account of Provident Fund dues. 7. While scrutinizing the return of income during the course of assessment proceeding, the A.O. noticed that the assessee has not deposited Rs. 9,78,388/- on account of employees' contribution to Provident Fund within the prescribed due date as per Explanation to section 36(1)(va) of the Act. The A.O. observed that the payment for July, 2006 was due on 15-8- 2006 but the same has been paid on 21-8-2006. The other sum represented Goa arrears amounting to Rs. 3,79,249/-. In the absence of details, the A.O. was of the firm belief that the payment of arrears being not paid within the prescribed due date, therefore, added the entire amount of Rs. 9,78,388/-. Before the ld. CIT(A) it was contended that the payment of July,2006 was made within the grace period of five days. The ld. CIT(A) was convinced that in respect of payment for the month of July, 2006, the due date of payment was 15-8-2006. The date 15-8-2006, was a national holi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent appeal. The appeal is, thus, dismissed." Considering the facts of the case in the light of the aforementioned decision of the Hon'ble Delhi High Court, we direct the A.O. to allow the claim of deduction of Rs.3,79,249/- on account of Provident Fund due. Ground No. 3 is accordingly allowed. 11. Ground No. 2 relates to the rejection of the claim of enhanced depreciation in full. 12. During the course of assessment proceeding, the A.O. noticed that in the statement of total income, depreciation of Rs. 2,19,12,091/- was claimed u/s 32 of the Act. However, the A.O. observed that as per Annexure 1 to Form No. 3CD, the amount of depreciation allowable u/s 32 of the Act was worked out at Rs. 2,14,37,050/-. The A.O. was of the opinion that excess claim made in the statement of computation of income is neither explained nor reconciled by the assessee company and accordingly restricted the claim of depreciation to Rs. 2,14,37,050/-. Before the ld. CIT(A), the assessee reconciled the claim and explained that a genuine error arose in the calculation of depreciation. It was contended that the A.O. has completely ignored the revised return. It was explained that initial depreciation wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) erred in directing the Assessing Officer to reduce opening balance of CENVAT credit because of the following reasons:- (i) The revaluation of opening stock may lead to a situation when the income of the assessee may be required to be assessed at a figure below the returned income due to higher adjustment to value of opening stock than to value of closing stock. (ii) Revaluation of opening stock will lead to chain reactions in earlier years whereby valuation of closing stock and opening stock in earlier years will be needed to be redone in keeping with accountancy principle that opening stock is to be identical with closing stock of the preceding year". 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to allow Rs. 7,30,500/- on account of professional fees paid to Dr. Dilip Sanvordekar as the assessee derives benefits of enduring nature by making payment of Referral Fee and it should be treated capital expenditure." 18. While scrutinizing the return of income, the A.O. found that as per Note 10 to the Form 3CD, the unutilized Cenvat balance as on 31-03-2007 amounted to Rs. 55,83,968/-. The A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not find any reason why the Revenue has shown its grievance on this account. The A.O. is directed to follow his finding given in the assessment order and restrict the disallowance to Rs. 24,05,558/-. Ground No. 1 of Revenue's appeal is accordingly dismissed. 22. Ground No. 2 relates to the disallowance of Rs. 7,30,500/- disallowed by the A.O. on account of professional fees paid to Dr. Dilip Sanvordekar. The issue finds place at para 5 of the assessment order wherein the A.O. has discussed the claim of the expenditure vis- -vis the services rendered by Dr. Dilip Sanvordekar. After analyzing the agreement, the A.O. observed that the services were also to be rendered in respect of the new plant at Hinjewadi, Pune which will be ready by August/September, 2007 and BA/BE studies, which the facility will be ready by April/May, 2007. According to the A.O., the services to be rendered are capital in nature and at the same time not pertaining to the year under consideration. Considering the capital nature of the services and also the fact that the period beyond the relevant previous year, the A.O. disallowed the claim of Rs. 7,30,500/- and added to the total income of the assessee. Befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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