9911796707
TMI Blog2017 (4) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Coming to the question of interest expenditure, nothing has been asked by the Assessing Officer nor any reply given by the assessee during the original assessment, despite the fact that assessee did not show any secured loans or unsecured loans in its balance sheet for the two preceding years. Such circumstances also would clearly indicate that the claim of interest expenditure requires verification. Assessing Officer failed to do this also. Thus lack of enquiry is pregnant in the assessment order on the two aspects mentioned by Ld. PCIT. As held by Hon’ble Apex Court in the case of Toyota Motor Corporation (2008 (8) TMI 56 - SUPREME COURT ), a cryptic order given by the Assessing Officer would be erroneous and prejudicial to the interests of Revenue where the issues require clear reasonings for accepting the claims of the assessee - Decided against assessee. - I.T.A. No. 124/Coch/2016 - - - Dated:- 23-3-2017 - SHRI ABRAHAM P. GEORGE, AM AND GEORGE GEORGE K., JM Assessee by : Shri V. Sathyanarayanan, CA Revenue by : Shri Shantham Bose, CIT (DR) ORDER Per Abraham P. George, Accountant Member This appeal filed by the assessee challenges the order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not reflect any secured or unsecured loans in the preceding two years. As per Ld. PCIT, even in the cash flow statement filed by the assessee, no borrowings or repayment of borrowed funds were shown. Thus, according to Ld. PCIT, Assessing Officer had passed the assessment order without looking into the above aspects and such order was erroneous and prejudicial to the interests of Revenue. 4. Assessee replied to the notice issued by the Ld. PCIT, stating that expenses incurred for corporate social responsibility were for the purpose of its own business. Relying on the judgment of Hon ble Jurisdictional High Court in the case of CIT vs. Travancore Cochin Chemicals Ltd. (243 ITR 284), assessee contended that expenses which were incurred for the welfare of the employees and their children formed a part of the corporate social responsibility expenses. In so far as interest payments were concerned, reply of the assessee was that such interests were paid to banks and Indian Navy. As per the assessee, loans were taken and squared up during currency of the relevant previous year and this was the reason why there were no loans appearing in the balance sheets. 5. Ld. PCIT after cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and institutions were in the nature of corporate social responsibility outgoing. Contention of Ld.AR was t hat the Assessing Officer had taken a lawful view by allowing the expenses incurred for the benefit of the employees of the assesseecompany. Reliance was placed on the judgment of Hon ble Madras High Court in the case of CIT vs. Madras Refineries Ltd. (266 ITR 170) and the decision of ITAT, Chennai Bench in the case of ITO vs. Velumanickam Lodge (123 ITD 25). For his argument that assessment made in accordance with a judgment of Hon ble Jurisdictional High Court could not be subjected to revision u/s. 263 of the Act, Ld. AR relied on the judgment of Hon ble Calcutta High Court in the case of CIT vs. Pradeep KumarTodi (325 ITR 96). 7. With regard to the claim of expenditure on interest, contention of Ld. AR was that no error whatsoever was pointed out by Ld. PCIT in the assessment order. As per Ld. AR, Ld. PCIT had expressed only an apprehension. According to him absence of opening or closing balance of loans, would not mean that the assessee had not taken any loans during the previous year. Ld. AR pointed out that assessee was engaged in building indigenous aircraft for In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of the Party Amount(in Rs.) Remarks 1. The Secretary, Payipad Jalolsava Samity 70000 3. Academy of Magical Sciences 930000 4. Kerala State Youth Welfare board 400000 Paid to Kerala Government 5. Prathyasha Foundation 400000 Paid to Organization of Physically Handicapped 6. Off Shore Sailing Club of India, Naval Base 200000 Paid to Indian Navy 7. Director, Grand Kerala Shopping Festival 800000 Paid to Kerala Government 8. Kerala Football Association 800000 Paid to Sports Association 9. Govt. UP School, Valampoor 90000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following details:- 1. Details of parties from whom income from work and services received S. No. Name and Address Amount received during the year 2. Details of the repairs/maintenance above ₹ 10lakhs. Please mention the nature of repairs/maintenance. 3. Details of liquidated damages. 4. Details of loss on derivative contracts. 5. Details of expenditure on exchange variation. 6. Note on treatment of expenses claimed under the head Depreciation and other losses written off in computation of total income. 7. Details of corporate social responsibility. 8. Note on treatment of position for anticipated losses and expenditure in computation of total income . 9. Note on treatment of adjustment relating to prior years in computation of total income. 10. Details of tax deducted at source in respect of payments made on account of various expenses. 11. Note on capital reserve being restoration of charges received from M/s. IOCL for laying pipeline. Please give explanation on to why the same has not been offered to tax. 12. Detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Travancore Cochin Chemicals Ltd. (supra) relied on by the Ld. AR, it is true that Their Lordships held expenses incurred exclusively for the welfare of its employees and for carrying on the business more efficiently to be allowable. However, the question that is to be addressed is whether such expenses were indeed incurred for efficiently doing the business of the assessee. This could have been answered only if an enquiry was done by the Assessing Officer, which was not done. It is not a case where the Assessing Officer had taken a lawful view of the claim of the assessee. Assessing Officer having not examined the claim, he had not taken any view at all. He simply went by what was given by the assessee in reply to his notice u/s. 142(1) of the Act and did not make the enquiries which a prudent man would have done under the circumstances of the case, 13. Coming to the question of interest expenditure, nothing has been asked by the Assessing Officer nor any reply given by the assessee during the original assessment, despite the fact that assessee did not show any secured loans or unsecured loans in its balance sheet for the two preceding years. Such circumstances also would clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
