Tribunal rulings on tax appeals: assessee wins for 2006-07, revenue for 2005-06/2006-07. Specific directions given.

The Tribunal partly allowed the appeals of the assessee for the assessment year 2006-07 and the revenue for the assessment years 2005-06 and 2006-07. Specific directions were given for each issue, including disallowance of foreign travel expenses, addition on account of arrears of depreciation, disallowance of penalties, disallowance of mining lease expenses, non-granting of credit for Tax Collected at Source, and disallowance of various travel expenses of the wife of the Chairman. The Tribunal set aside certain decisions and remanded some matters for fresh examination, emphasizing alignment with relevant court judgments.

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Issues involved:
1. Disallowance of foreign travel expenses
2. Addition on account of arrears of depreciation while computing book profit
3. Addition made by AO on penalty levied for violation of provisions
4. Disallowance of mining lease expenses
5. Non-granting of credit for Tax Collected at Source (TCS)
6. Disallowance of various travel expenses of the wife of the Chairman

1. Disallowance of foreign travel expenses:
The dispute revolved around the allowability of expenditure on foreign travel of non-employee wives of the Director and President of the company. The AO disallowed the claim, citing lack of business purpose and referring to previous court judgments. However, the CIT(A) allowed the claim based on previous Tribunal decisions. The Tribunal decided to set aside the CIT(A) order and restore the matter to the AO for fresh examination, emphasizing the need to determine the business purpose of the visits in line with relevant court judgments.

2. Addition on account of arrears of depreciation while computing book profit:
The AO made an addition for arrears of depreciation debited to the P&L Account for earlier years, which the assessee argued should not be added to the book profit under section 115JB. The CIT(A) directed the AO to delete the addition, relying on the Supreme Court's judgment. The Tribunal upheld the CIT(A)'s decision, citing consistency with a previous Tribunal ruling and the High Court's stance on the matter.

3. Addition made by AO on penalty levied for violation of provisions:
The AO disallowed penalties paid by the assessee for violations of different statutes, considering them non-deductible under section 37(1). The CIT(A) confirmed the disallowance, leading to the assessee's appeal. During the hearing, the assessee did not press this ground due to the small amount involved, resulting in the dismissal of the ground.

4. Disallowance of mining lease expenses:
The dispute involved the disallowance of mining lease expenses claimed by the assessee. The AO allowed only 1/20th of the expenses, contrary to the assessee's claim of 1/10th. The Tribunal, following earlier decisions, allowed the claim at the rate of 1/10th, setting aside the CIT(A)'s decision.

5. Non-granting of credit for Tax Collected at Source (TCS):
The assessee sought credit for TCS, with a shortfall in the amount allowed by the AO. The Tribunal directed the AO to grant the credit upon submission of proper evidence supporting the tax collection at source by the assessee.

6. Disallowance of various travel expenses of the wife of the Chairman:
The AO disallowed foreign travel expenses of the wife of the Chairman, which the CIT(A) deleted based on the previous year's order. The Tribunal decided to set aside the CIT(A) order and remand the matter to the AO for a fresh examination, aligning with the decision taken for the assessment year 2005-06.

In conclusion, the appeals of the assessee for assessment year 2006-07 and the revenue for assessment years 2005-06 and 2006-07 were partly allowed, with specific directions given for each issue under consideration.

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