Shamal Prestressed Cement Products P.Ltd., Aurangabad V. ITO (Central), Aurangabad

ITA 884/PUN/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1049 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V L JAIN
• Keywords: Capital asset; Gift; Depreciation; Business expenditure; Additional depreciation
• Section: 143(3); 133A; 37(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 884 /PN/201 1 / ASSESSMENT YEAR : 200 8 - 0 9 SHAMAL PRESTRESSED CEMENT PRODUCTS PVT. LTD., 10, SHRINIKETAN COLONY, JALNA ROAD, NEAR COSMOS BANK, AURANGABAD . / APPELLANT PAN: A A ECS5867J VS. THE INCOME TA X OFFICER (CENTRAL) , AURANGABAD . / RESPONDENT / APPELLANT BY : S HRI V.L. JAIN / RESPOND ENT BY : S HRI RAJESH DAMOR / DATE OF HEARING : 1 6 .0 9 .2015 / DATE OF PRONOUNCEMENT: 23 .0 9 .2015 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) , AURANGABAD , DATED 0 7 . 04 .201 1 RELATING TO ASSESSMENT YEAR 200 8 - 0 9 AGAINST ORDER PASSED U NDER SECTION 143(3) OF THE I NCOME - TAX ACT, 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 5,89,573/ - U/S 36(1)(III) TOWARDS INTEREST ON B ORROWED FUNDS. INTEREST ON B ORROWED FUNDS. ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 2 2. THE LEARNED CIT(A) HAS FURTHER ERRED ON FACTS AND IN LAW IN DISALLOWING RS.13,607/ - TOWARDS ADDITIONAL DEPRECIATION ON EXPENDITURE ON MOULDS. 3. THE LEARNED CIT(A) HAS FURTHER ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.1,02,193/ - INCURRED ON SALES PROMOTION EXPENSES. 4. THE APPELLANT CRAVES LEAVE TO ALTER , AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL OR TO ADD TO THE SAME, IF DEEMED NECESSARY . 3. THE ISSUE IN GROUND OF APPEAL NO.1 RAISED BY THE A SSESSEE IS AGAINST THE DISALLOWANCE UNDER SECTION 36(1)(III) OF THE ACT AT RS. 5,89,573/ - . 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF P.S.C. POLES. THE ASSESSEE WAS A MEMBER O F YOG GROUP OF AURANGABAD. SEARCH ACTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON THE YOG GROUP ON 21.02.2008 AD SURVEY ACTION WAS CARRIED OUT UNDER SECTION 133A OF THE ACT AT THE FACTORY PREMISES OF THE ASSESSEE ON THE SAME DATE. THE ASSESSEE FIL ED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 30.03.2009 DECLARING TOTAL INCOME OF RS. 12,42,891/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD MADE INVESTMENT IN SHARES OF SISTER CONCERN TO THE EXTENT OF RS. 1,74,24,000/ - AND HAD ALSO GIVEN INTEREST FREE LOANS & ADVANCES TO SISTER CONCERNS OF RS. 3,00,350/ - . THE ASSESSING OFFICER FURTHER NOTED THAT THE RESERVES & SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE WAS RS. 36,83,453/ - . THE ASSESSING OFFICER IN VIEW OF THE INTEREST FREE ADVANCES MADE BY THE ASSESSEE BY WAY OF INVESTMENT IN SHARES OF THE SISTER CONCERNS AND AFTER ADJUSTING THE RESERVES & SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE, WAS OF THE VIEW THAT NOTIONAL DISALLOWANCE OF INTEREST @ 12% IS T O BE MADE IN THE HANDS OF THE ASSESSEE ON THE BALANCE INVESTMENT IN SHARES AND INTEREST FREE ADVANCES OF RS. 1,38,67,538/ - , AT RS.16,64,104/ - . FURTHER , AS THE ACTUAL INTEREST DEBITED TO THE BOOKS OF ACCOUNT WAS RS. 10,16,378/ - , DISALLOWANCE UNDER SECTION 36 (1)(III) OF THE ACT WAS RESTRICTED TO RS.10,16,378/ - . ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 3 5. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT IT HAD MADE THE INVESTMENTS IN THE SHARES OF SISTER CONCERNS IN ANTICIPATION OF DIVIDEND INCOME, WHICH WAS TAXABLE IN ITS HANDS AND THE SAME COULD NOT B E CONSIDERED FOR DISALLOWANCE UNDER SECTION 36(1)(III) OF THE ACT. IT WAS FURTHER POINTED OUT BY THE ASSESSEE THAT IT HAD TOTAL OF RS.1.26 CRORES AS INTEREST FREE FUNDS AVAILABLE WITH IT , ON ACCOUNT OF SHARE CAPITAL , PROFIT AND LOSS ACCOUNT , SECURITY PREM IUM ACCOUNT AND STATE CAPITAL INCENTIVE . THE ASSESSEE FURTHER CONTENDED THAT IN VIEW OF SUFFICIENT NON - INTEREST BEARING FUNDS BEING AVAILABLE, NO DISALLOWANCE WAS WARRANTED UNDER SECTION 36(1)(III) OF THE ACT. THE CIT(A) WAS OF THE VIEW THAT THE INVESTME NT MADE BY THE ASSESSEE IN THE SHARES OF SISTER CONCERNS COULD NOT BE REGARDED AS BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE . SINCE THE ASSESSEE HAD CLAIMED INTEREST ON BORROWINGS AS BUSINESS EXPENDITURE , WHERE AS THE ASSESSEE HAD NOT CHARGED ANY INTERES T ON THE LOANS & ADVANCES GIVEN TO THE SISTER CONCERNS AND SINCE THE ASSESSEE HAD RAISED THE LOANS IN THE EARLIER YEARS AND HAD ALSO MADE THE INVESTMENT IN THE EARLIER YEARS, THE INTEREST IN RESPECT OF SUCH LOANS OBTAINED IN THE EARLIER YEARS IS TO BE DISA LLOWED IN THE HANDS OF THE ASSESSEE. THE VARIOUS RELIANCES PLACED UPON BY THE ASSESSEE WERE H ELD TO BE MIS - PLACED BY THE CIT(A). IT WAS NOTED BY THE CIT(A) THAT SIMILAR DISALLOWANCE OF INTEREST UNDER SECTION 36(1)(III) WAS MADE IN THE HANDS OF ASSESSEE I N ALL SEVEN YEARS UNDER APPEAL. HOWEVER, THE CIT(A) CONSIDERED THE PLEA OF THE ASSESSEE THAT IT HAD INTEREST FREE FUNDS AVAILABLE AT RS. 1.26 CRORES AGAINST INVESTMENT IN LOANS & ADVANCES OF SHARES OF THE SISTER CONCERNS AT RS.1.75 CRORES. THE CIT(A) DIRE CTED THE ASSESSING OFFICER TO WORK OUT THE DISALLOWANCE OF INTEREST UNDER SECTION 36(1)(III) OF THE ACT @ 12% ON BALANCE INVESTMENT OF RS. 49,13,113/ - AND COMPUTE D THE DISALLOWANCE UNDER SECTION 36(1)(III) OF THE ACT AT RS.5,89,573/ - . ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 4 6. THE ASSESSEE IS IN APPEAL AGAINST PARTIAL ADDITION MADE IN THE HANDS OF THE ASSESSEE. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT NO NEW INVESTMENT WAS MADE DURING THE YEAR AND ALL THE INVESTMENTS WERE MADE IN EARLIER YEARS AND NO DISALLOWA NCE OF INTEREST WAS MADE IN THE EARLIER YEARS . I T WAS SPECIFICALLY POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE FINDINGS OF CIT(A) THAT SIMILAR DISALLOWANCE WAS MADE IN ALL SEVEN SCRUTINY ASSESSMENT YEARS WAS INCORRECT. IT WAS FURTHER POINTED OUT BY HIM THAT THE SAID INVESTMENTS AND ADVANCES WERE MADE BECAUSE OF COMMERCIAL EXIGENCY AS THE ASSESSEE HAD BUSINESS DEALINGS WITH THE SISTER CONCERNS. OUR ATTENTION WAS DRAWN TO THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER VIS - - VIS THE DETAILS REGARDING SHARE INVESTMENTS AND THE AVAILABILITY OF FUNDS IN FINANCIAL YEARS 1995 - 96 TO 2007 - 08 . RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SRISHTI SECURITIES (P) LTD. (2009) 321 ITR 498 (B OM) . IN CIT VS. SRISHTI SECURITIES (P) LTD. (2009) 321 ITR 498 (B OM) . 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, POINTED OUT THAT IN CASE NO SCRUTINY ASSESSMENT WAS MADE IN THE EARLIER YEARS AND THE ISSUE HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER, DISALLOWANCE UNDER SECTION 36( 1)(III) OF THE ACT COULD BE MADE IN THE HANDS OF THE ASSESSEE IN THE INSTANT ASSESSMENT YEAR , IN VIEW OF THE FACTS OF THE CASE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE DISALLOW ANCE MADE UNDER SECTION 36(1)(III) OF THE ACT. THE ASSESSEE WAS A COMPANY AND HAD IN THE PRECEDING YEAR MADE ADVANCES TO ITS SISTER CONCERNS BY WAY OF INVESTMENT IN SHARES OF THE SAID CONCERN S . THE BREAK - UP OF THE SHARES INVESTMENT AND ALSO THE AVAILABIL ITY OF FUNDS W ERE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER BY ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 5 WAY OF LETTER DATED 09.12.2009 . AS PER THE ASSESSEE, FOLLO WING INVESTMENTS HAVE BEEN MADE: - 3. THE DETAILS REGARDING THE SHARE INVESTMENT AND THE FUNDS AVAILABILITY IS SUBMITTED HER EUNDER: - A) INVESTMENT: B) AVAILABILITY OF FUNDS: FIN. YEAR 1995 - 96 RS. 3,50,000/ - RS. 5,51,830/ - FIN. YEAR 199 6 - 9 7 RS. 7,80,000/ - RS. 4,83,845/ - FIN. YEAR 199 8 - 9 9 RS.20,00,000/ - RS.1,95,004/ - FIN. YEAR 200 5 - 0 6 RS. 44,26,000/ - RS. 15,99,780/ - FIN. YEAR 200 6 - 0 7 RS. 98,02,000/ - RS.61,27,092/ - FIN. YEAR 200 7 - 0 8 RS. N I L RS. 09,47,473/ - TOTAL RS. 1,73,58,000/ - 10. THE YEAR UNDER APPEAL BEFORE US IS ASSESSMENT YEAR 2008 - 09 I.E. FINANCIAL YEAR 2007 - 08 , IN WHICH NO FRESH INVESTMENT WAS MADE. THE ASSESSEE IN ADDITION TO THE INVESTMENT IN SHARES OF THE SISTER CONCERNS HAD ALSO ADVANCED SUM OF RS.3,00,350/ - TO ITS SISTER CONCERNS, WHICH WAS INTEREST FREE ADVANCES. THE TOTAL INVESTMENTS MADE BY THE ASSESSEE WERE HELD TO BE FOR NON - BUSINESS PURP OSE AND CONSEQUENTLY, THE INTEREST RELATABLE TO SUCH INTEREST FREE INVESTMENTS / ADVANCES , WERE HELD TO BE NOT ALLOWABLE EXPENDITURE UNDER THE PROVISIONS OF SECTION 36(1)(III) OF THE ACT. THE EXPENDITURE UNDER THE PROVISIONS OF SECTION 36(1)(III) OF THE ACT. THE ASSESSING OFFICER ALLOWED THE BENEFIT OF THE RESERVES & SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE AT RS. 36,83,453/ - AND COMPUTED THE DISALLOWANCE UNDER SECTION 36(1)(III) OF THE ACT ON NET INTEREST FREE LOANS AND ADVANCES / INVESTMENTS OF RS. 1,38,67,538/ - . THE NOTIONAL DISALLOWANCE OF INTEREST WORKED OUT AT RS. 16,64, 104/ - , WHICH WAS RESTRICTED TO RS.10,16,378/ - I.E. INTEREST EXPENDITURE DEBITED TO THE PROFIT & LOSS ACCOUNT. THE CIT(A) ON THE OTHER HAND, UPHOLDING THE DISALLOWANCE OF INTEREST NOTED THE PLEA OF THE ASSESSEE THAT THE TOTAL OF INTEREST FREE FUNDS AVAILAB LE AS ON 31.03.2008 WAS RS. 1,26,37,878/ - , AGAINST WHICH THE INVESTMENT IN LOANS & ADVANCES AND SHARE INVESTMENTS WITH THE SISTER CONCERNS AMOUNT ED TO RS. 1,75,50,991/ - . THE CIT(A) WORKED OUT THE DISALLOWANCE UNDER SECTION 36(1)(III) OF THE ACT ON THE DIFFE RENTIAL AMOUNT OF RS. 49,13,113/ - AND COMPUTED THE DISALLOWANCE @ 12% ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 6 AMOUNTING TO RS.5,89,573/ - . THE CASE OF THE ASSESSEE BEFORE US IS THAT ALL THESE ADVANCES WERE MADE IN THE EARLIER YEA RS AND NO SUCH DISALLOWANCES WERE MADE IN ALL THE EARLIER YEARS. TH E CIT(A) AT PAGE 5 HAS GIVEN A FINDING THAT THE ASSESSING OFFICER HAD DISALLOWED INTEREST UNDER SECTION 36(1)(III) OF THE ACT IN ALL SEVEN YEARS UNDER APPEAL, FOR WHICH THE SCRUTINY ASSESSMENTS WERE MADE. THE ASSESSEE ON THE OTHER HAND, HAS POINTED OUT TH AT NO SCRUTINY ASSESSMENTS WERE MADE IN THE EARLIER YEARS . THE REVENUE IS NOT IN APPEAL AGAINST THE ORDER OF CIT(A) IN ALLOWING THE BENEFIT OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE AT RS.1.26 CRORES AS AGAINST INVESTMENT OF RS. 1.75 CRORES. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS WHETHER ANY DISALLOWANCE OF INTEREST UNDER SECTION 36(1)(III) OF THE ACT IS TO BE MADE ON THE DIFFERENTIAL AMOUNT OF RS. 49,13,113/ - . 1 1 . ADMITTEDLY, THE INVESTMENTS WERE MADE BY THE ASSESSEE IN THE SHARES OF ITS SISTER CONCERNS IN THE EARLIER YEARS, IN WHICH YEAR S NO DISALLOWANCE OF INTEREST WAS MADE. FURTHER, THE CLAIM OF THE ASSESSEE BEFORE US IS THAT THE INTEREST WAS MADE. FURTHER, THE CLAIM OF THE ASSESSEE BEFORE US IS THAT THE SAID INVESTMENT WAS MADE WITH ITS SISTER CONCERNS BECAUSE IT HAS BUSINESS DEALINGS WITH SISTER CONCERNS AND HENCE, THE ADVANCE S WERE FOR COMMERCIAL EXIGENCY. IN THE TOTALITY OF THE ABOV E SAID FACTS AND CIRCUMSTANCES AND IN THE ABSENCE OF ANY FINDING BY THE ASSESSING OFFICER THAT THE INTEREST BEARING FUNDS AVAILABLE WITH THE ASSESSEE HAVE BEEN UTILIZED FOR MAKI NG THE AFORESAID INTEREST FREE INVESTMENTS, WE FIND NO MERIT IN THE DISALLOWANCE MADE UNDER SECTION 36(1)(III) OF THE ACT. IN THIS REGARD, WE PLACE RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. RELIANCE UTILITIES AND POWER LI MITED (2009) 313 ITR 340 (BOM). ACCORDINGLY, WE SET - ASIDE THE ORDER OF CIT(A) IN RESTRICTING THE DISALLOWANCE TO RS. 5,89,573/ - AND DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS THUS, ALLOWED. ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 7 1 2 . THE ISSUE IN GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS IN RELATION TO ADDITIONAL DEPRECIATION ON EXPENDITURE ON MOULDS OF RS.13,607/ - . 1 3 . THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED ADDITI ONAL DEPRECIATION OF RS. 1,08,728/ - ON ADDITION TO PLANT & MACHINERY . THE ASSESSEE HAD MADE CLAIM OF ADDITIONAL DEPRECIATION @ 20% AT RS. 62,053/ - IN RESPECT OF ADDITIONS TO PLANT & MACHINERY TOTALING RS. 3,10,625/ - . THE SAID ADDITIONS TO PLANT & MACHINERY ARE TABULATED AT PAGE 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER WAS OF THE VIEW THAT WHERE THE ASSESSEE HAD PAID LABOUR CHARGES FOR CONVERSION OF 9 MTR. MOULD INTO 8 MTR. MOULD AND WHERE THERE WAS NO PURCHASE OF NEW PLANT & MACHINERY, THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF ADDITIONAL DEPRECIATION ON THE SAME. FURTHER, THE GENERATOR SET W AS USED IN THE FACTORY PREMISES, WHERE THE COMPUTER AND OTHER OFFICE APPLIANCES WERE ALSO INSTALLED, THEREFORE, THE ADDITIONAL DEPRECIATION WAS NOT ALLOWABLE ON SUCH ITEMS. 1 4 . BEFORE THE CIT(A), THE PLEA OF THE ASSESSEE WAS THAT THE ADDITIONAL DEPRECIATION WAS ALLOWABLE IN RESPECT OF CONVERSION OF OLD ASSET INTO NEW ASSET BY INCURRING EXPENDITURE . IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT THE INSTALLAT ION EXPENSES OF CAPITAL ASSETS WERE TO BE REGARDED AS CAPITAL ASSETS. ANOTHER PLEA RAISED BY THE ASSESSEE WAS THAT THE ASSESSING OFFICER HAD INCORRECTLY DISALLOWED EXPENDITURE IN RESPECT OF ASSETS FOR WHICH, THE ASSESSEE HAD NOT CLAIMED ADDITIONAL DEPRECI ATION. THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER, WHO IN THE REMAND REPORT DATED 24.02.2011 HAS ACCEPTED THAT THE ADDITIONAL DEPRECIATION WAS ALLOWABLE ON GENERATOR SET PURCHASED FOR RS. 1,30,000/ - AND ALSO ACCEPTED THAT THE A DDITIONAL DEPRECIATION WAS INCORRECTLY DISALLOWED IN RESPECT OF SOME ITEMS AMOUNTING TO RS. 83,798/ - , ON WHICH THE ASSESSEE HAD NOT CLAIMED ADDITIONAL ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 8 DEPRECIATION. THE CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSING OFFICER IN RESPECT OF EXPENDITURE ON CO NVERSION OF OLD MOULD INTO NEW MOULD TOTALING RS.68,035/ - , ON WHICH ADDITIONAL DEPRECIATION OF RS.13,607/ - WAS CLAIMED AND CONFIRMED THE ADDITION . IN RESPECT OF EXPENDITURE RELATING TO INSTALLATION OF NEW GENERATOR SET A T FACTORY PREMISES AMOUNTING TO RS. 25,660/ - , THE PLEA OF THE ASSESSEE THAT THE SAID EXPENDITURE WAS CAPITALIZED WITH THE COST OF ASSET FOR CALCULATING THE DEPRECIATION , WAS ACCEPTED. THE ASSESSING OFFICER WAS THUS, DIRECTED TO RESTRICT THE DISALLOWANCE OF ADDITIONAL DEPRECIATION TO THE EXT ENT OF RS.13,607/ - . 1 5 . THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID ORDER OF CIT(A). 1 6 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRONGLY OPPOSED THE SAID DISALLOWANCE MADE IN THE HANDS OF ASSESSEE. 1 7 . THE LEARNED DEPARTMENTAL REPR ESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 1 8 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ADDITIONAL DEPRECIATION ON ASSETS IS ALLOWABLE UNDER SECTION 32( 1 )(IIA) OF THE ACT. HOW EVER, NO ADDITIONAL DEPRECIATION IS ALLOWABLE AS PER THE PROVISO TO SECTION 32( 1 )(II A ) OF THE ACT, WHERE PLANT & MACHINERY INSTALLED AFTER 31.03.2005, WAS EARLIER USED EITHER WITHIN INDIA OR OUTSI DE INDIA BY ANY OTHER PERSON. FURTHER, ADDITIONAL DEPRECIAT ION IS NOT ALLOWABLE ON ANY OFFICE APPLIANCES. THE ASSESSEE HAD PAID LABOUR CHARGES FOR THE CONVERSION OF ITS OLD MOULD INTO NEW MOULD AND THERE WAS NO PURCHASE OF NEW PLANT & MACHINERY. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AND UPHOLDING THE ORDER OF CIT(A) IN DISALLOWING ADDITIONAL DEPRECIATION ON EXPENDITURE OF RS. 68,035/ - INCURRED ON ACCOUNT OF ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 9 LABOUR CHARGES IN RESPECT OF CONVERSION OF OLD MOULD INTO NEW MOULD, WE DISMISS THE GROUND OF APPEAL NO.2 RA ISED BY THE ASSESSEE. 19 . THE ISSUE IN GROUND OF APPEAL NO.3 RAISED IS AGAINST THE DISALLOWANCE OF SALES PROMOTION EXPENSES OF RS. 1,02,193/ - . 2 0 . THE ASSESSEE HAD CLAIMED EXPENDITURE TOTALING RS. 1,53,290/ - ON ACCOUNT OF SALES PROMOTION EXPENSES. THE A SSESSEE WAS ASKED TO FILE THE DETAILS OF SALES PROMOTION EXPENSES AND ALSO THE DOCUMENTARY EVIDENCE IN RESPECT THEREOF. IN RESPONSE, THE ASSESSEE STATED THAT THE SALES PROMOTION EXPENSES WERE INCURRED THROUGH ICICI BANK CREDIT CARD AND WERE SALES PROMOTIO N EXPENSES. HOWEVER, NO BILLS WERE AVAILABLE WITH THE ASSESSEE AGAINST THE SAID EXPENDITURE. THE ASSESSING OFFICER NOTED THAT THE MAIN CUSTOMERS OF THE ASSESSEE COMPANY WERE EXECUTIVE ENGINEER , MSEB , MULA PRAVARA ELECTRICITY CO - OP. SOCIETY AND THE OTHERS WERE SISTER CONCERNS. THE ORDERS FROM THE MAIN CUSTOMERS WERE THROUGH TENDERS AND THE CONTENTION OF ORDERS FROM THE MAIN CUSTOMERS WERE THROUGH TENDERS AND THE CONTENTION OF THE ASSESSEE THAT IT HAD PRESENTED GIFTS TO MAINTAIN RELATIONS WITH THE CUSTOMERS WAS FOUND TO BE IRRELEVANT. FURTHER, SINCE THE ASSESSEE HAD NOT FILED DE TAILS OF THE GIFTS PURCHASED AND ALSO BILLS IN SUPPORT OF ITS CLAIM, THE SAID CLAIM OF EXPENDITURE OF RS. 1, 53,290/ - WAS DISALLOWED. 2 1 . THE CIT(A) UPHELD THE SAID ADDITION IN THE ABSENCE OF ANY EVIDENCE BEING FILED BY THE ASSESSEE. HOWEVER, THE CIT(A) AL LOWED 1/3 RD OF THE EXPENDITURE, SINCE THE PAYMENTS WERE MADE THROUGH CREDIT CARD. HOWEVER, DISALLOWANCE OF RS.1,02,193/ - WAS CONFIRMED BY THE CIT(A). 2 2 . EVEN BEFORE US, THE CLAIM OF THE ASSESSEE WAS THAT THE PAYMENTS WERE MADE THROUGH ICICI BANK CREDIT CARD . E XCEPT FILING THE STATEMENT OF PAYMENTS AT PAGES 72 AND 73 OF THE PAPER BOOK, THE ASSESSEE HAS FAILED TO FURNISH ANY ITA NO. 884 /PN/201 1 SHAMAL PRESSTRESSED CEMENT PRODUCTS PVT. LTD. 10 BILLS OR ANY DETAILS OR BREAK - UP OF THE EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD SALES PROMOTION EXPENSES. IT IS THE R EQUIREMENT OF LAW THAT FOR ALLOWING ANY EXPENDITURE UNDER SECTION 37(1) OF THE ACT , ONUS IS UPON THE ASSESSEE TO ESTABLISH THAT THE SAID EXPENDITURE HAS BEEN INCURRED FOR CARRYING ON ITS BUSINESS. WHERE THE ASSESSEE HAS FAILED TO FURNISH EVEN BASIC DETAIL S OF THE BREAK - UP OF EXPENDITURE OR THE NATURE OF EXPENDITURE, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AND CON SEQUENTLY, THE SAME IS REJECTED. THE CIT(A) HAS ALREADY ALLOWED 1/3 RD OF BUSINESS EXPENDITURE. UPHOLDING THE ORDER OF CIT(A), WE DISMISS T HE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE. 2 3 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER P RONOUNCED ON THIS 23 RD DAY OF SEPTEMBER , 201 5 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 23 RD SEPTEMBER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / T HE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A), AURANGABAD ; 4. / THE CIT (CENTRAL), NAGPUR ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE