Relief to Daawat Foods: ITAT allows Depreciation on Capital Expenditure [Read Order]

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Daawat Foods - ITAT - capital expenditure - Taxscan

In a major relief to Daawat Foods, the Income Tax Appellate Tribunal (ITAT), Delhi Bench allowed the depreciation on capital expenditure.

The assessee, Daawat Foods Ltd. filed the appeal relating to disallowance under Section 40A(3) at Rs. 6,31,641/-, the Assessing Officer made an addition to the extent of Rs. 5,58,296/- under Section 40A(3) of the Act in respect of freight payments made to transporters and truck operator inter-alia for purchase of paddy.

The assessee submitted that this issue is decided against the assessee in its own case for A.Y. 2008-09, wherein the Tribunal relying upon the order passed in the case of L T Foods Ltd., a group company of the assessee upheld the disallowance under Section 40A(3) to the extent of Freight payments made to transporters and truck operator. In relation to disallowance for Rs. 66,333, being depreciation on capital expenditure of Rs. 5,35,468, the assessee submitted that such amount was paid to various parties for acquiring fixed assets in the assessment year 2008-09 and the Assessing Officer did not consider the same. This aspect is covered in favor of the assessee in the assessee’s own case for A.Y. 2008-09.

The coram of Accountant Member, R.K.Panda, and Judicial Member Suchitra Kamble held that disallowance under Section 40A(3) at Rs. 6,31,641/- and more particularly the aspect of addition to the extent of Rs. 5,58,296/- under Section 40A(3) of the Act in respect of freight payments made to transporters and truck operator inter-alia for purchase of paddy, is already covered against the assessee in assessee’s own case in A.Y. 2008-09, wherein the Tribunal relying upon the order passed in the case of L T Foods Ltd., a group company of the assessee upheld the disallowance under Section 40A(3) to the extent of Freight payments made to transporters and truck operator.

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