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TMI Blog2013 (3) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... of by way of this common order for the sake of convenience. 2. First, we take up the appeal of the revenue for the assessment year 2007-08 i.e. I.T.A.No. 2618/Ahd/2010. Ground No.1 is as under: (i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.11,17,492/- made on account of treating the expenditure incurred on repairs as capital without appreciating the fact that the repairs had an enduring benefit. 2.1 Brief facts of the case are that it is noted by the A.O. in para 3 of the assessment order that the assessee has shown consumption of stores and spares of Rs.98,78,195/- and out of this, the A.O. has noted three expenses of Rs.10,64,258/- in respect of Set of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipper to TC etc. On page 12 of the paper book is the relevant bill. From this narration on page 11 of the paper book, it is not clear as to whether these items are for replacement of parts of a machine or it consists of a separate machine in itself. In he absence of any basis indicated by Ld. CIT(A) for coming to this conclusion that these expenses are on account of replacement of components in the machine, we do not feel that this order of Ld. CIT(A) is sustainable. At the same time, there is no finding in the assessment order also that these expenses are in respect of a separate machine in itself and under these facts and in the interest of justice, we feel that the matter should go back to the file of Ld. CIT(A) for a fresh decision. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest cost incurred by the assessee on advances given to various parties for non-business purpose without appreciating the fact that the assessee was paying huge bank interest that was debited to P L Account. 2.2.1 Brief facts of the case are that it is noted by the A.O. that a sum of Rs.93,95,092/- was advanced by the assessee to M/s. Amigo Dispensing Solutions Pvt. Ltd. covered u/s 40A(2)(b) of the Act and no interest was charged or recovered from this party. The A.O. held that since the assessee is paying interest on borrowed funds, interest cost to the extent of these advances is not allowable. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A) who has deleted this disallowance and now, the revenue is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese facts, as per these two judgements of Hon ble Gujarat High Court having been rendered in the case of Gujarat Industrial Development Corporation Ltd. and Raghuvir Synthetics Ltd. (supra), disallowance made by the A.O. of interest is not justified. Therefore, we decline to interfere in the order of Ld. CIT(A) on this issue. 2.2.4 In the result, this ground of the revenue is rejected. 2.3 Ground No.3 is as under: (iii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.2,03,331/- made on account of disallowance of interest under Rule 8D r.w.s. 14A without appreciating the fact that though the assessee claims to have interest free funds for investment, it is paying in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The balance disallowance of Rs.25,093/- is in respect of other expenses which might have been incurred for earning the dividend income. This disallowance was made by the A.O. to the extent of 0.5% of the value of investment as per Rule 8D. We have already noted that Rule 8D is not applicable in the present year because the same is applicable form assessment year 2008-09. As per the judgment of Hon ble Bombay High court rendered in the case of Godrej Boyce Manufacturing Pvt. Ltd. Vs DCIT as reported in 194 Taxman 203, although Rule 8D is not applicable in any period prior to assessment year 2008-09 but disallowance has to be made by the A.O. on a reasonable basis. Normally in such a situation, we restore back the matter to the file of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the file of Ld. CIT(A) for a fresh decision as per para 2.1.2 2.1.3 above and hence, in the present year also, we set aside the order of Ld. CIT(A) and restore the mater back to his file for afresh decision with the same direction as given by us in assessment year 2007-08. 4.1.3 This ground of the revenue is allowed for statistical purposes. 4.2 Ground No.2 is as under: 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting addition of Rs.9,93,805/- made on account of interest cost incurred by the assessee on advances given to its sister concern for non-business purpose without appreciating the fact that the assessee was paying huge bank interest that was debited to P L Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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