TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal grants appeal on various issues incl. accrued liability provision, commission payment, & investment allowance.</h1> <h3>Bharat Bijlee Ltd. Versus Deputy Commissioner of Income-Tax</h3> The Tribunal allowed the appellant's appeal on multiple issues, including disallowance of provision for accrued liability for Leave Travel Assistance, ... - Issues Involved:1. Disallowance of provision for accrued liability for Leave Travel Assistance.2. Disallowance of commission payment to M/s. Rajesh Agency.3. Allowance of investment allowance on fire hydrants and exhaust fans.4. Allowance of investment allowance on the cost of computer installed in the factory.5. Disallowance calculation for employee directors.Issue 1: Disallowance of Provision for Accrued Liability for Leave Travel AssistanceThe appellant, maintaining books on a mercantile basis, provided for Leave Travel Assistance (LTA) liability based on accrual. The dispute arose from the Assessing Officer's addition of the variance between actual payment and provision made. The Tribunal held that the liability to pay LTA was clear, and the provision was justified as per the contract with employees. The method of accounting was consistent and accepted, entitling the appellant to deduction based on actual accrued liability. The addition was deleted.Issue 2: Disallowance of Commission Payment to M/s. Rajesh AgencyThe appellant claimed a deduction for commission paid to M/s. Rajesh Agency, supported by evidence. The Assessing Officer disallowed the claim due to inability to verify the agency's existence at the given address. The Tribunal found the evidence furnished by the appellant sufficient to discharge the onus, and the Assessing Officer's failure to establish the agency's non-existence at the relevant time led to the disallowance being overturned.Issue 3: Allowance of Investment Allowance on Fire Hydrants and Exhaust FansThe CIT(A) directed the allowance of investment allowance on fire hydrants and exhaust fans, treating them as part of the plant for manufacturing goods. The revenue contended that the machinery should be involved in production. The Tribunal, following a decision of the Karnataka High Court, dismissed the revenue's appeal, stating that deduction is permissible for machinery installed in the business of manufacturing, regardless of direct involvement in the production process.Issue 4: Allowance of Investment Allowance on Computer Installed in the FactoryThe CIT(A) allowed investment allowance on the cost of a computer installed in the factory, in line with a decision of the Calcutta High Court. The Tribunal upheld this decision, stating that the computer installed for the business of manufacture qualifies for the investment allowance deduction.Issue 5: Disallowance Calculation for Employee DirectorsThe issue of disallowance calculation for employee directors was resolved in favor of the assessee, citing a Supreme Court decision. The disallowance was to be worked out in accordance with section 40(c) and not section 40A(5), leading to the dismissal of the revenue's appeal.In conclusion, the Tribunal allowed the appellant's appeal while dismissing the revenue's appeal on various grounds related to the disallowance and allowance of deductions and provisions.
TaxTMI 
TaxTMI 
