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TMI Blog2018 (4) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly the addition made u/s 14A of the Act is directed to be deleted. Addition of interest on fixed deposit - Held that:- Before us the ld. Counsel for the assessee submitted that submissions were made before CIT(A) on this issue. We are of the view that it would be just and appropriate to direct the CIT(A) to decide this issue afresh Unexplained cash credit - no credit entry in the books of accounts - Held that:- It is clear from the ledger account of Flower Trading & Investment Co.Ltd. as appearing in the books of accounts of the assessee that there was a debit of ₹ 20,00,000/- on 22.06.2011 towards refund of loan and a corresponding credit entry on 25.06.2011 reversing the debit entry. These entries are contra entries and do not represent any transaction. Flower Trading & Investment Co.Ltd in their books of accounts have not recognized these transactions at all. It is only because of this that there is a difference between the assessee’s books of accounts and the books of accounts of Flower Trading & Investment Co. Ltd. In our opinion the assessee has rightly reconciled the difference and the addition made by the AO is purely on surmises and ignoring the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenses incurred for connection has no relevance with Plant Machinery except the electricity is used for running Plant Machinery, which is used for household purpose also. Tile initial payment for installation of electricity connection is definitely capital expenditure since it is one-time payment. The expense comes under the Building Block which is used in business. Hence, depreciation @ 10% is applicable on electric connection payment of ₹ 13,53,831/-. 2. Aluminium Armoured cable: The expense of ₹ 25,72,335/- towards purchase of aluminium armoured cable is recognised as expense incurred for purchase of electrical fitting. The cable has its distinct characteristic and used and deployed in Plant Machineries as per requisition for making the machineries work. This cannot be an integral part of any plant or machinery, but can be used in any kind of plant or machinery for which those are used. Hence, the cable falls under the category of electrical fitting and depreciation as per Income Tax Act, is allowable @ 10%. Since the cable does not come under the Block plant or machinery, additional depreciation is not allowed. 3. Control Panel: The expense of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Plant Machineries as per requisition for making the machineries work. This cannot be an integral part of any plant or machinery, but can be used in any kind of plant or machinery for which those are used. Hence, the various electrical items falls under the category of electrical fitting and depreciation as pet Income Tax Act, is allowable @ 10%. Since the electrical items do not come under the Block plant or machinery, additional depreciation is not allowed. 7. Fire extinguisher: The expense of ₹ 47,437/- towards purchase of Fire extinguisher is recognised as expense incurred for purchase of furniture fixture. The control panel has its distinct characteristic and used for purpose not related to Plant Machineries. This cannot be an integral part of any plant or machinery. Hence, fire extinguisher falls under the category of furniture fixture and depreciation as per Income Tax Act, is allowable @ 10%. Since the fire extinguisher does not come under the Block plant or machinery, additional depreciation is not allowed. 5. The AO thereafter reworked depreciation that was to be allowed as follows: On the basis of above analysis, it has been established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item had independent functions and was not an integral part of the plant and machinery. In the given circumstances we are of the view that order of the revenue authorities on this aspect does not require any reconsideration. Accordingly ground no.2 raised by the assessee is dismissed. 9. Ground No.3 raised by the assessee reads as follows :- 3. For that the Ld. C.I.T(A) erred in confirming the disallowance of ₹ 62,399/- under sec. 14A read with rule 8D when no exempt income was earned during the year, no expenses were incurred for earning any exempt income and further the share capital and reserves of the assessee company were more than the investments in shares, and no portion of the interest was disallowable. . 10. As far as ground no.3 is concerned the plea of the assessee is that there can be no disallowance u/s 14A of the Act when there is no exempt income earned by the assessee during the relevant previous year. 11. Before us the ld. Counsel for the assessee submitted that the CBDT Circular on which the CIT(A) placed reliance is contrary to the decision of Hon ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi) wherein it was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions were made before CIT(A) on this issue. We are of the view that it would be just and appropriate to direct the CIT(A) to decide this issue afresh after affording the assessee opportunity of being heard. 16. Ground No.5 raised by the assessee reads as follows :- 5. For that the Ld. C.I.T(A) erred in confirming the addition of ₹ 20 lakhs as unexplained cash credit when no such loan was received by the assessee and it was explained that the sum was contra entry due to a cheque issued to the party which cheque was not presented for payment and cancelled. 17. The facts with regard to ground no.5 raised by the assessee are that the AO noticed from the Tax Audit Report filed by the Assessee that a loan of ₹ 70,60,000/- was from M/s. Flower Trading Investment Co. Ltd during the F.Y. 2011-12 and ₹ 1,86,45,000/- has been repaid during the relevant F.Y. Notice u/s.133(6) was issued to M/s.Flower Trading Investment Co. Ltd by the AO on 31.10.2014 requesting to furnish detail of transaction of unsecured loan. M/s.Flower Trading Investments Ltd., gave details of loans given by them to the Assessee and that which was repaid by the Assessee. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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