Allen Career Institute Vs JCIT (ITAT Jaipur)
Disallowance of Rs.2,01,515/- on account of New Electricity Connection charges. In Ground of Appeal disallowance of Rs. 2,01,515/- made relating to the claim on account of electric connection charges, is agitated. The AO noted that the assessee had claimed expenditure of Rs.2,37,076/- for new electricity connection charges. When asked, the assessee stated that the charges so paid were for connection charges, electricity lines, supervision charges, CTPT set cost and meter cost but did not create any property. The AO however, feeling dissatisfied, disallowed Rs.2,01,515 after allowing depreciation @ 15% vide para 2.5.3 pg 22 mainly on the ground that it is clearly a capital expenditure, which resulted into benefit of enduring nature. He placed reliance on Assam Bengal Cement Co. Ltd. v/s CIT (1955) 27 ITR 0034 (SC). However, the CIT(A) also confirmed the same.
Before us the ld. AR made the following submissions with prayers to delete the disallowance confirmed by the ld. CIT(A)
1. Firstly, we strongly rely upon the detailed written submissions filed before the ld. CIT(A), which are reproduced at pg 32-33 & 37 of the order of CIT(A).
2. The AO has not established that such expenditure resulted into creation of a new property or the assessee got an advantage of an enduring nature and hence, such a disallowance was wrongly made. The impugned disallowance may kindly be deleted in full.
On the other hand, the ld. DR strongly relied upon the findings recorded by the authorities below and justified the additions made and confirmed by the ld. CIT(A) and prayed to uphold the addition/disallowance.
We have heard both the parties and perused the materials available on record. A careful perusal of the facts and the material on record shows that the claimed expenditure of Rs. 2,37,076/- with, AO was on account of connection charges, electricity lines, supervision charges, CTPT set cost and meter cost as contended, (which is evident from the copies of invoices etc. APB 61 &104) such expenditure did not create any new asset and the facts as stated, remaining uncontroverted by the revenue, no disallowance was called for. The authorities below were not justified in making the disallowance hence, the same is hereby is deleted. Therefore, this ground is allowed.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal of the assessee is directed against the order of the ld. CIT(A), Kota dated 02-01-2015 for the assessment year 2010-11 raising therein following grounds of appeal.
1. The impugned additions and disallowances made in the order dated 20-03-2013 u/s 143(3) of the Act, bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence, the same kindly be deleted.
2. Rs. 10,83,901/-:The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of Rs.10,83,901/- out of interest expenses alleging not for business purpose. The disallowance so made and confirmed by the ld. CIT(A) is contrary to the provisions of law and facts, hence kindly be deleted in full.
3. Rs. 7,236/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of Rs.7,236/- out of interest payment on account of alleged notional interest on interest free advances. The disallowance so made and confirmed by the ld. CIT(A), is contrary to the provision of law and hence, kindly be deleted in full.
4. Rs. 76,60,166/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of Rs.76,60,166/-made out of interest expenses u/s 36(1)(iii) alleging that the borrowed funds were used on capital expenditure. The disallowance so made and confirmed by the ld. CIT(A) is contrary to the provision of law and hence, kindly be deleted in full.
5. Rs. 15,60,000/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of Rs.15,60,000/-being the amount of outstaying liability on account of scholarship expenses alleging that the same was a contingent/unascertainable liability not arising in the subjected year. The disallowance so made and confirmed by the ld. CIT(A) is contrary to the provision of law and hence, kindly be deleted in full.
6. Rs. 11,20,083/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of following expenses.
