CIT(A) AGAINST ORDER 143(3)

This query is : Resolved

VICKY GODARA (Querist)
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12 January 2011 A.Y. 2008-09
STATUS FIRM

THE CASE IS SELECTED FOR SCRUTINY

ISSUE:- 1

ASSESSEE DURING THE P.Y. REPAIR THE BUILDING AND A WALL HEIGHT ALSO INCREASE AND CLAIM REVENUE EXPENDITURE AMOUNT RS. 1700000 ON THE GROUND THAT IT DOES NOT INCREASE THE CAPACITY OF FIRM AND NO FUTURE BENEFIT

ASSESSING OFFICER ADD IT TO ASSESSEE INCOME AND INITIATE PENALTY U/S 271(1)(c) in scrutiny order u/s 143(3)

ISSUE:- 2

ASSESSEE FIRM HAS TAKEN A TERM LOAN OF RS.10000000 AND PURCHASE NEW ASSETS AND PAID INTEREST AMOUNT RS. 700000 AND CLAIM AS REVENUE EXPENDITURE, ASSESSING OFFICER ADD BACK TO ASSESSEE INCOME AND INITIATE PENALTY U/S 271(1)(C)

ASSESSEE RETURNED INCOME FOR SAID A.Y. IS TWO CRORE

PLEASE SUGGES AS MUCH AS POSSIBLE WITH REF. OF CASE LAWS IF ANY FOR GOING TO CIT(A) BECAUSE LAST DATE FOR APPEAL IS 20/01/2011.

IF REQUIRE FURTHER INFORMATION PLEASE POST

VIKRAM BISHNOI
MOB- 9999916827

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 January 2011 ISSUE 1.

Show separately the expenses incurred for repairs of the building out of the total expenditure claimed. This may be allowed as revenue expenditure U/s 30(a)(ii).

issue 2-
In case when business is already set up and expenses incurred towards purchase of new assets are incurred , it may be claimed as a revenue expenditure.

C T Desai V CIT [1979] 120 ITR (KAR.) & CIT v
Assoicated Fibre & Rubber Ind. [1999] 236 ITR 471(sc)

Gist of the Cases:
Capital borrowed should be spend for the purpose of acquisition of business asset during the relevant accounting year. It is sufficient for the purpose of claiming deduction of interest paid thereon. It is not necessary that the assessee must have used that business asset for doing business in the relevant accounting year.

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