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TMI Blog2014 (12) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... order in contravention of the provisions of Section 250(6) of the Income Tax Act, 1961. 2. That on facts, circumstances and legal position of the case, the initiation and conclusion of reassessment proceedings u/s 148 r.w.s. 147 of the Act is bad in law and hence the reassessment framed is illegal. 3. That on the farts, circumstances and legal position of the case, the Worthy CIT (A) has erred in confirming the action of Ld. AO wherein he had disallowed the Interest claimed u/s 36(1)(iii) of the Act amounting to Rs. 29,54,333/- on Capital work in progress. 4. The ground of appeal No.1 raised by the assessee is general in nature and the same is dismissed. 5. The issue in ground No. 2 raised by the assessee is against the re-opening of assessment under section 147/148 of the Act. 6. The brief facts relating to the issue are that the assessee before us moved an application under Rule 11 of the 1TAT Rules, 1963 claiming that the said ground of appeal No. 2 which is purely on legal issue was not raised before the Commissioner of Income Tax (Appeals) but the same was taken in the original ground of appeal filed before the Tribunal and in the interest of natural justice, the said gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide order passed under section 143(3) read with section 148 of the Act. 9. Before the Commissioner of Income Tax (Appeals), the only issue raised was against the disallowance of interest, which was upheld by the Commissioner of Income Tax (Appeals) in view of the ratio laid down by the Hon'ble Punjab & Haryana High Court in CIT Vs Abhishek Industries (supra). 10. The assessee is in appeal before us on both the accounts i.e. vide ground No. 2, it had raised the issue of initiation and conclusion of the assessment proceedings under section 147/148 of the Act and also against the addition made on merits by disallowing the interest under section 36( 1)(iii) of the Act at Rs. 29.54.333/-. 11. The ld. AR for the assessee submitted that once the original assessment was completed under section 143(3) of the Act, the invocation of proviso to section 36(1)(iii) of the Act was not automatic as it had to be established whether the interest bearing funds were utilized for making the said investment. The first aspect of the issue is that where the assessee has not raised the said issue before the Commissioner of Income Tax (Appeals), whether the same can be admitted for adjudication in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file of Assessing Officer to re-work the disallowance under section 36(1)(iii) of the Act by applying pro-rata day product method and not by applying flat rate of interest on the closing balance of each day. The ground of appeal No. 3 raised by the assessee is thus partly allowed. ITA 1033/CHD/2012 :: Assessee's Appeal :: A.Y. 2009-10 15. The assessee has raised the following grounds of appeal: 1. That on the facts and in the circumstances of the case and in law, the Worthy CIT (Appeals) through his order dated 04.07.2012 has erred in passing that order in contravention of provisions of Section 250(6) of the Income Tax Act, 1961. 2. That on facts, circumstances and legal position of the case, the Worthy CIT (A) has erred in confirming the action of Ld. AO wherein he had is allowed the Interest claimed u/s 36(1)(iii) of the Act for Rs. 7,93,364/- on Capital work in progress. 3. That on facts, circumstances and legal position of the case. Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he had disallowed the depreciation of Rs. 43.248/- on fixed assets installed a; Baddi unit by alleging that if the unit did not function, the depreciation attributable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the ld. AR for the assessee that section 32 of the Income Tax Act had to be interpreted in cases the asset was temporarily not in use but was part of the Mock of assets and whether on such block of assets, depreciation was allowable. Reliance was placed upon CIT Vs Yamaha Motor India Pvt. Ltd. 328 ITR 297 (Del). 22. The ld. DR for the revenue placed reliance on the orders of the authorities below. 23. We have heard the rival contentions and perused the record. The issue arising in the present ground of appeal is in relation to the allowability of depreciation on the assets which were part of block of assets in Baddi unit. During the year under consideration, no manufacturing activity was carried out at the said unit and part of the assets were transferred to the Dera Bassi unit by the assessee. However, balance assets were lying in Baddi unit and the assessee claimed depreciation on the same which was disallowed by the Assessing Officer and Commissioner of Income Tax (Appeals). We find no merit in the stand of the revenue authorities in view of the concept of block of assets where the assets cannot be individually identified after the same are merged in the block of assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in respect of its Baddi Unit by erroneously holding the same to be not allowable as no working took place in the unit during the year under consideration. 5. That on facts, circumstances and legal position of the case, the Worthy CIT (A) has erred in confirming the action of Ld. AO of making impugned addition of Rs. 8,301/- in the total income by erroneously invoking the provisions of section 14A r.w.r. 8D of Income Tax Rides. 1962 even when no expenditure was incurred during the year by the appellant company for making such investment. 25. The ground of appeal No. 1 raised by the assessee is general in nature and the same is dismissed. 26. The ground of appeal Nos. 3 and 5 are not pressed and hence the same are dismissed. 27. The issue in ground of appeal No. 4 is identical to the issue in ground of appeal No. 3 raised in assessment year 2009-10 in respect of depreciation on Fixed assets at Baddi unit. In line with our decision in paras herein above, the ground of appeal raised by the assessee is allowed. 28.. Now coming to ground of appeal No. 2 raised by the assessee which is against the addition of Rs. 456, 830/- on account of disallowance of interest on the monthly bala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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