ACIT, CHENNAI V. SRM Systems and Software P Ltd., CHENNAI

ITA 1635/CHNY/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9126 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N DEVANATHAN
• Keywords: Reopening of assessment; Business expenditure; Capital receipt; Onus to prove
• Section: 142(1); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1635/MDS/2013 & CO NO.17/MDS/2014 / ASSESSMENT YEAR : 2006-07 THE ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE I(3) CHENNAI VS. M/S SRM SYSTE MS AND SOFTWARE P. LTD NO.120 G.N CHETTY ROAD T. NAGAR, CHENNAI 600 017 [PAN AABCS 5118 D ] ( &' / APPELLANT) (RESPONDENT /CROSS OBJECTOR ) DEPARTMENT BY : SHRI JASDEEP SINGH, CIT ASSESSEE BY : SHRI N. DEVANATHAN, ADVOCATE / DATE OF HEARING : 17 - 03 - 2016 / DATE OF PRONOUNCEMENT : 13 - 0 6 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE AND THE CROSS OBJECTI ON OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CO MMISSIONER OF INCOME-TAX (APPEALS)(C)-II, CHENNAI, DATED 9.5.2013 FOR ASSESSMENT YEAR 2006-07. ITA NO.1635/13 CO NO.17/14 :- 2 -: 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISALLO WANCE OF EXPENDITURE. 3. SHRI JASDEEP SINGH, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE-COMPANY IS ENGAGED ITSE LF IN THE BUSINESS OF DEVELOPMENT OF SOFTWARE. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED EXPENSES OF ` 7,40,55,450/-. THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. IN THE ABSENCE OF ANY MATERIAL, THE ASSESSING OFFICER FOUN D THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE TO THE EXTENT OF ` 7,40,55,450/- CANNOT BE ALLOWED. HOWEVER, ON APPEAL BY THE ASSE SSEE, THE CIT(A) FOUND THAT THE ASSESSEE HAS SHOWN SALES OF ` 1,14,91,494/- AND FURTHER INCOME OF ` 9 LAKHS. THEREFORE, IT CANNOT BE SAID THAT NO EXPENDITURE WAS INCURRED TO EARN THE ABOVESAID INCO ME. REFERRING TO THE REMAND REPORT FILED BY THE ASSESSING OFFICER, T HE CIT(A) CAME TO THE CONCLUSION THAT AT THE BEST, THE EXPENDITURE TO THE EXTENT OF ` 3,66,23,924/- CAN BE DISALLOWED AND ACCORDINGLY, DE LETED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF ` 3.74 CRORES. THE REVENUE IS CHALLENGING THE RELIEF GRANTED BY THE CI T(A). HOWEVER, THE ASSESSEE HAS ALSO FILED CROSS OBJECTION CHALLENGING THE ORDER OF THE CIT(A) WHERE THE DISALLOWANCE OF ` 3,66,23,294/- WAS CONFIRMED. 4. REFERRING TO THE COPY OF THE REMAND REPORT, THE L D. DR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT SAID T HAT THE ASSESSEE ITA NO.1635/13 CO NO.17/14 :- 3 -: HAS INCURRED ANY EXPENDITURE. AFTER CONSIDERING TH E REPLY OF THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT THE EXP ENDITURE TO THE EXTENT OF ` ` 3,66,23,924/- CANNOT BE ALLOWED. THE ASSESSING OF FICER HAS NOT SAID THAT THE BALANCE AMOUNT CAN BE ALLOWED AS CLAIMED BY THE ASSESSEE. THE CIT(A) BY MISCONSTRUING THE REMAND RE PORT FILED BY THE ASSESSING OFFICER, GRANTED PARTIAL RELIEF, THEREFOR E, ACCORDING TO THE LD. DR, THE ENTIRE AMOUNT OF ` 7,40,55,450/- HAS TO BE DISALLOWED. 5. ON THE CONTRARY, SHRI N. DEVANATHAN, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE, IN FACT, PRO DUCED THE BOOKS OF ACCOUNT AND OTHER SUPPORTING MATERIAL BEFORE THE AS SESSING OFFICER. HOWEVER, THE ASSESSING OFFICER, WITHOUT CONSIDERING THOSE MATERIAL, OBSERVED THAT THE ASSESSEE HAS NOT PRODUCED ANY BO OKS OF ACCOUNT AND OTHER SUPPORTING MATERIAL. THE VERY SAME MATER IAL WAS FILED BEFORE THE CIT(A) ALSO. THE CIT(A), IN FACT, CALLE D FOR THE REMAND REPORT. THE ASSESSING OFFICER ON THE BASIS OF THE MATERIAL FURNISHED BY THE ASSESSEE BEFORE THE CIT(A), FOUND THAT ONLY FOLLOWING EXPENDITURE CANNOT BE ALLOWED AS DEDUCTION. (I) RENT CHARGES OF ` 18,80,000/- (II) PROFESSIONAL AND CONSULTANCY CHARGES OF ` 12,58,000/- (III) CUSTOMS DUTY PENALTY OF ` 25,00,000/- (IV) DISCARDED ASSETS WRITTEN OFF OF ` 2,58,07,541/- (V) ROC FILING FEE OF ` 18,00,500/- (VI) FINANCIAL EXPENSES OF ` 33,78,383/- OUT OF THE TOTAL AMOUNT OF ` 72,31,718/- ITA NO.1635/13 CO NO.17/14 :- 4 -: IN RESPECT OF OTHER CLAIM OF EXPENDITURE, THE ASSES SING OFFICER HAS NOT MADE ANY COMMENT AND HE HAS NOT OBJECTED TO THE CLA IM OF THE ASSESSEE. THEREFORE, THE CIT(A) RESTRICTED THE DIS ALLOWANCE ONLY IN RESPECT OF THE OBJECTION RAISED BY THE ASSESSING OF FICER IN THE REMAND REPORT. ACCORDING TO THE LD. COUNSEL, THE ASSESSE E HAS ALSO FILED CROSS OBJECTION AGAINST THE ORDER OF THE CIT(A) CONFIRMIN G THE ADDITION TO THE EXTENT OF ` ` 3,66,23,924/-. ACCORDING TO THE LD. COUNSEL, WHEN THE ASSESSEE HAS DECLARED SALES OF ` 1,14,91,494/-, THE SAME CANNOT BE ACHIEVED WITHOUT INCURRING ANY EXPENDITURE, THEREFO RE, DISALLOWANCE OF THE ENTIRE EXPENDITURE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. PROFESSIONAL AND CONSULTANCY CHARGES TO THE EXTENT OF ` 25 LAKHS WAS INCURRED ONLY FOR BUSINESS PURPOSE, THEREFORE, THE ASSESSING OFFICER AND THE CIT(A) ARE NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. REFERRING TO THE CUSTOMS DUTY PENALTY, T HE PENALTY PAID BY THE ASSESSEE IS ONLY COMPENSATORY IN NATURE, THERE FORE, THE CIT(A) OUGHT TO HAVE DELETED THE PENALTY. REFERRING TO TH E FEE PAID TO THE ROC, THE LD. COUNSEL SUBMITTED THAT THESE ARE REVEN UE EXPENDITURE IN THE COURSE OF BUSINESS FOR EARNING THE PROFIT, THER EFORE, THE CIT(A) OUGHT TO HAVE DELETED THE SAME. REFERRING TO THE D ISCARDED ASSETS WRITTEN OFF TO THE EXTENT OF ` 2,58,07,541/-, THE LD. COUNSEL SUBMITTED THAT THE VALUE OF THE DISCARDED ASSETS WERE WRITTEN OFF IN THE BOOKS OF ACCOUNT, THEREFORE, THE WRITTEN DOWN VALUE OF THE A SSETS HAS TO BE ITA NO.1635/13 CO NO.17/14 :- 5 -: ALLOWED AS DEDUCTION WHILE COMPUTING THE TAXABLE IN COME. REFERRING TO THE FINANCIAL EXPENSES OF ` 72,31,718/-, THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAS FURNISHED THE ENTIRE DETAILS , THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN SAYING THAT T HE ASSESSEE HAS FILED DETAILS ONLY FOR PAYMENT OF ` 38,53,335/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS PRODUCED EVIDENCE FOR THE ENTIRE FINANCIAL EXPENSES OF ` 72,31,718/-, THEREFORE, THE CIT(A) OUGHT TO HAVE D ELETED THE ADDITION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD. DR AND THE LD. COUNSEL FOR THE ASSESSEE, T HE ASSESSING OFFICER DISALLOWED THE ENTIRE EXPENDITURE OF ` 7,40,55,450/- ON THE GROUND THAT THE ASSESSEE HAS NOT FILED THE BOOKS OF ACCOU NT AND OTHER EVIDENCE TO SUPPORT THE CLAIM OF THE EXPENDITURE. THE ASSESSEE NOW CLAIMS BEFORE THIS TRIBUNAL THAT ALL THE MATERIALS WERE PRODUCED BEFORE THE ASSESSING OFFICER AND THE CIT(A), IN FACT, AFTE R CALLING FOR THE REMAND REPORT FROM THE ASSESSING OFFICER, HAS PARTI ALLY ALLOWED THE CLAIM OF THE ASSESSEE. AS RIGHTLY SUBMITTED BY TH E LD. COUNSEL FOR THE ASSESSEE, THE FACT THAT THE ASSESSEE HAS DISCLOSED THE SALES OF ` 1,14,91,494/- IS NOT IN DISPUTE. WHEN THE ASSESSE E DISCLOSED THE SALES OF ` 1,14,91,494/-, THE SAME COULD NOT HAVE BEEN ACHIEV ED WITHOUT INCURRING ANY EXPENDITURE. THEREFORE, THE ASSESSING OFFICER IS ITA NO.1635/13 CO NO.17/14 :- 6 -: NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSE SSEE TOTALLY. ON THE BASIS OF THE MATERIAL FILED BY THE ASSESSEE, THE C IT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSE SSING OFFICER VIDE REMAND REPORT DATED 30.4.2013 FOUND THAT ONLY THE E XPENDITURE TO THE EXTENT OF ` ` 3,66,23,924/- COULD NOT BE ALLOWED. IN RESPECT OF OTHER EXPENDITURE, THE ASSESSING OFFICER HAS NOT COMMENTE D ANYTHING IN THE REMAND REPORT. BASED UPON THE REMAND REPORT, THE C IT(A) FOUND THAT THE ASSESSING OFFICER HAS NO OBJECTION FOR ALLOWING THE BALANCE AMOUNT AS CLAIMED BY THE ASSESSEE. NOW THE ONLY OBJECTIO N OF THE REVENUE BEFORE THIS TRIBUNAL IS THAT THE ASSESSING OFFICER HAS NOT SAID ANYTHING IN THE REMAND REPORT ABOUT THE OTHER EXPENDITURE EV EN THOUGH HE HAS OBJECTED ABOUT THE PROFESSIONAL AND CONSULTANCY CHA RGES, CUSTOMS DUTY PENALTY, DISCARDED ASSETS WRITTEN OFF, ROC FIL ING FEES AND FINANCIAL EXPENSES. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT WHEN THE CIT(A) HAS CALLED FOR A SPECIFIC REMAND REPORT ON T HE BASIS OF THE MATERIAL ON RECORD IN RESPECT OF THE EXPENDITURE OF ` 7,40,55,450/-, AND THE ASSESSING OFFICER FOUND THAT ONLY THE EXPEN DITURE RELATING TO RENT CHARGES, PROFESSIONAL AND CONSULTANCY CHARGES, CUSTOMS DUTY PENALTY, DISCARDED ASSETS WRITTEN OFF, ROC FILING F EES AND FINANCIAL EXPENSES CANNOT BE ALLOWED WHICH COMES TO THE EXTEN T OF ` 3,66,23,924/-. IN RESPECT OF OTHER EXPENDITURE, HE HAS NOT MADE ANY COMMENTS. THEREFORE, THE PRESUMPTION IS THAT THE AS SESSING OFFICER ITA NO.1635/13 CO NO.17/14 :- 7 -: HAS NOTHING TO COMMENT ON THE REMAINING EXPENDITURE . IN OTHER WORDS, THE ASSESSING OFFICER HAS SATISFIED ABOUT TH E EXPENDITURE CLAIMED BY THE ASSESSEE. 7. THE NEXT GROUND OF APPEAL WITH REGARD TO SHARE CAPI TAL ADVANCE OF ` 6.17 CRORES. 8. SHRI JASDEEP SINGH, LD. DR SUBMITTED THAT THE ASSE SSEE HAS DISCLOSED SHARE CAPITAL ADVANCE TO THE EXTENT OF ` 6,17,81,000/-. HOWEVER, THE ASSESSEE HAS NOT FILED THE NAMES AND ADDRESSES OF THE PERSONS WHO PAID THE CAPITAL ADVANCE, THEREFORE, TH E ASSESSING OFFICER MADE ADDITION OF ` 6,17,81,000/-. ON THE BASIS OF THE DETAILS FILED BY THE ASSESSEE BEFORE THE CIT(A), A REMAND REPORT WA S FILED BY THE ASSESSING OFFICER. THE ASSESSEE HAS NOT FILED ANY BOOKS OF ACCOUNT OR OTHER MATERIAL TO SUPPORT THE CLAIM OF SHARE CAPITA L ADVANCE. IN THE ABSENCE OF ANY MATERIAL, THE ASSESSING OFFICER FOUN D IN THE REMAND REPORT THAT THE SHARE CAPITAL ADVANCE CANNOT BE TAK EN AS CAPITAL RECEIPT. HOWEVER, THE CIT(A) FOUND THAT THE SHARE CAPITAL ADVANCES WERE MADE THROUGH BANKING CHANNELS AND SHARES WERE ALLOTTED IN THE SUBSEQUENT FINANCIAL YEAR. ACCORDING TO THE LD. DR , MERELY BECAUSE THE TRANSACTIONS WERE MADE THROUGH BANKING CHANNEL, THAT CANNOT BE A REASON TO ALLOW THE CLAIM OF THE ASSESSEE. THEREF ORE, THE CIT(A) OUGHT NOT TO HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. ITA NO.1635/13 CO NO.17/14 :- 8 -: THE LD. DR PLACED HIS RELIANCE ON THE JUDGMENT OF T HE DELHI HIGH COURT IN THE CASE OF CIT VS NOVA PROMOTERS AND FINLEASE P. LTD, 342 ITR 169. 9. ON THE CONTRARY, SHRI N. DEVANATHAN, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT DURING THE YEAR UNDER CONSI DERATION THE ASSESSEE HAS RECEIVED SHARE CAPITAL ADVANCE TO THE EXTENT OF ` 6,17,81,000/- THROUGH BANKING CHANNELS. ALL THE DE TAILS RELATING TO THE SHARE CAPITAL ADVANCE WAS FURNISHED BEFORE THE ASSE SSING OFFICER AS WELL AS THE CIT(A). THE LIST OF 290 PERSONS WHO CO NTRIBUTED TO THE SHARE CAPITAL WAS FURNISHED BEFORE THE ASSESSING OF FICER EVEN AT THE TIME OF REMAND PROCEEDINGS. WHEN THE ASSESSEE HAS PRODUCED THE LIST OF 290 PERSONS ALONGWITH THEIR ADDRESSES IT IS FOR THE ASSESSING OFFICER TO EXAMINE THE SAME. THE ASSESSING OFFICER HAS SIMPLY REJECTED THE LIST FILED BY THE ASSESSEE ON THE GROUND THAT ALL THE ADDRESSES ARE AT ANDHRA PRADESH. ACCORDING TO THE LD. COUNSEL, W HEN PEOPLE FROM ANDHRA PRADESH APPLIED FOR SHARES OF THE ASSESSEE-C OMPANY, THE ASSESSEE COULD PRODUCE ONLY THOSE ADDRESSES AVAILAB LE WITH THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER CANNOT REJECT THE CLAIM OF THE ASSESSEE ON THE GROUND THAT ALL THE PERSONS/AD DRESSES ARE FROM ANDHRA PRADESH. REFERRING TO THE ORDER OF THE CIT( A), THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE ALLOTTED SHARES SUBSEQ UENTLY TO ALL THE PERSONS. THE LIST OF THE ALLOTTEES WERE FILED AS F ORM NO.5. THE ITA NO.1635/13 CO NO.17/14 :- 9 -: MATERIALS WERE ALSO FILED BEFORE THE AUTHORITIES BE LOW FOR INCREASING THE AUTHORIZED SHARE CAPITAL OF THE COMPANY FROM ` 3 CRORES TO ` 36 CRORES. PLACING RELIANCE ON THE UNREPORTED JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS VICTORY SPINNING MILLS LTD. I N T.C.(A) NOS. 309 TO 311 OF 2014, DATED 22.8.2014, THE LD. COUNSEL SUBM ITTED THAT IN VIEW OF THE JUDGMENT OF THE APEX COURT IN CIT VS LOVELY EXPORTS P. LTD., 216 CTR 195, IT IS FOR THE ASSESSING OFFICER TO REO PEN THE INDIVIDUAL ASSESSMENT IF THERE WAS ANY ALLEGATION OF BOGUS SHA RE APPLICATION. THE LD. COUNSEL FURTHER SUBMITTED THAT IT IS NOT TH E CASE OF THE ASSESSING OFFICER THAT THE SHARE APPLICATION MONEY ACTUALLY EMANATED FROM THE CORPUS OF THE ASSESSEE SO AS TO TREAT THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF THE SHARE APPLICANTS INCLUDING THEIR ADDRESSES, THEREFORE, THE BURDEN OF PROOF SHI FTS ON THE SHOULDER OF THE ASSESSING OFFICER. THEREFORE, IT IS FOR THE ASSESSING OFFICER TO EXAMINE FURTHER AND FIND OUT WHETHER ANY MONEY EMAN ATED FROM THE CORPUS OF THE ASSESSEE AS SHARE APPLICATION MONEY. IN THE ABSENCE OF ANY SUCH INVESTIGATION DONE BY THE ASSESSING OFFICE R, ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE CIT(A) HAS RIGHTL Y DELETED THE ADDITION. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY ITA NO.1635/13 CO NO.17/14 :- 10 -: THE LD. COUNSEL FOR THE ASSESSEE, THERE IS NO ALLEG ATION THAT THE SHARE APPLICATION MONEY WAS EMANATED FROM THE CORPUS OF T HE ASSESSEE. THE ASSESSEE HAS FILED THE NAMES AND ADDRESSES OF T HE SHARE APPLICANTS. THEREFORE, IT WAS FOR THE ASSESSING OF FICER TO EXAMINE FURTHER. MERELY BECAUSE THE SHARE APPLICANTS ARE F ROM ANDHRA PRADESH, THAT CANNOT BE A REASON TO DISALLOW THE CL AIM OF THE ASSESSEE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY , THE SAME IS CONFIRMED. 11. NOW COMING TO THE CROSS OBJECTION OF THE ASSESSEE, THE FIRST GROUND IS WITH REGARD TO REOPENING OF ASSESSMENT U /S 147 OF THE ACT. 12. WE HEARD THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS NOT F ILED THE RETURN OF INCOME IN THE REGULAR COURSE. THEREFORE, THE ASSES SING OFFICER ISSUED A NOTICE U/S 148 ON 8.2.2010. SUBSEQUENTLY A NOTI CE U/S 142(1) OF THE ACT WAS ALSO ISSUED. CONSEQUENT TO THE NOTICES ISSUED BY THE ASSESSING OFFICER U/S 148 AND 142(1) OF THE ACT, T HE ASSESSEE HAS FILED THE RETURN OF INCOME ON 7.12.2010 DISCLOSING A LOSS OF ` 6,16,63,956/-. IN THOSE CIRCUMSTANCES, THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS R IGHTLY REOPENED THE ASSESSMENT. ITA NO.1635/13 CO NO.17/14 :- 11 -: 13. IN RESPECT OF OTHER GROUNDS, AS RIGHTLY FOUND BY T HE CIT(A), RENT AND PROFESSIONAL AND CONSULTANCY CHARGES PAID BY THE ASSESSEE WAS NOT SUBJECTED TO TDS, THEREFORE, THE SAME HAS T O BE DISALLOWED U/S 40(A)(IA) OF THE ACT. THE ASSESSEE HAS NOT FI LED ANY MATERIAL EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THIS TRIBUNAL THE NATURE OF THE PENALTY PAID BY THE ASSESSEE TO THE CUSTOMS DE PARTMENT. PENALTY FOR CONTRAVENTION/VIOLATION OF LAW CANNOT BE ALLOWE D AS BUSINESS EXPENDITURE. THE DISCARDED ASSETS TO THE EXTENT O F ` 2,58,07,541/- WAS ALSO DISALLOWED BY THE ASSESSING OFFICER. THE DETAILS OF DISCARDED ASSETS ARE NOT AVAILABLE ON RECORD. IT IS NOT KNOW N WHETHER THE DISCARDED ASSETS ARE STOCK-IN-TRADE OR CAPITAL ASSE T USED AS TOOL FOR CARRYING ON THE BUSINESS. IN THE ABSENCE OF ANY S UPPORTING MATERIAL AND THE DETAILS OF THE MACHINERY/ASSETS DISCARDED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE IN RESPECT OF DISALLOWANCE OF DISCARD ED ASSETS TO THE EXTENT OF ` 2,58,07,541/- AND REMAND BACK TO THE FILE OF THE A SSESSING OFFICER FOR RECONSIDERATION. THE ASSESSING OFFICE R SHALL REEXAMINE THE ISSUE AND BRING ON RECORD THE NATURE OF THE ASSETS DISCARDED AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. ITA NO.1635/13 CO NO.17/14 :- 12 -: 14. NOW COMING TO THE FINANCIAL EXPENSES, THE ASSESSEE HAS FURNISHED THE DETAILS WITH REGARD TO ` 38,53,335/-. HOWEVER, NO DETAILS WERE FURNISHED WITH REGARD TO FINANCIAL EXPENSES OF ` 33,78,383/-, THEREFORE, THE ASSESSING OFFICER FOUND THAT AN AMOU NT OF ` 33,78,383/- CANNOT BE ALLOWED AS DEDUCTION. NO MATERIAL IS AVA ILABLE ON RECORD WITH REGARD TO THE CLAIM OF EXPENSES OF ` 33,78,383/-. THEREFORE, THE CIT(A) HAS RIGHTLY CONFIRMED THE FINANCIAL EXPENSES OF ` 33,78,383/-. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JUNE, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER / CHENNAI ! / DATED: 13 TH JUNE, 2016 RD !' # $% &% / COPY TO: 1 . '( / APPELLANT 4. ) / CIT 2. #*'( / RESPONDENT 5. %+, # - / DR 3. ) () / CIT(A) 6. ,/ 0 / GF