2017 (1) TMI 1859 - HC - Income Tax

Deduction under s.80HHC allowed using s.115JB book profits; share-issue costs amortizable under s.35D; depreciation dispute partly for department

Commissioner of Income Tax, Chennai Versus M/s. Shasun Chemicals & Drugs Ltd.

Commissioner of Income Tax, Chennai Versus M/s. Shasun Chemicals & Drugs Ltd. - TMI Tax Case Appeals under Section 260A challenge the Income Tax Appellate Tribunal order in I.T.A. Nos. 553/Mds/2006 and 13/Mds/2006. Three questions of law were framed: (i) 'Whether ... the Tribunal was right in allowing deduction under section 80HHC on the basis of book profits under section 115JB even though the eligible profits under section 80HHC was Nil as per normal computation?' (ii) 'Whether ... the Tribunal was right in holding that the expenditure incurred on issue of shares is eligible to be amortized under section 35D of the Income Tax Act?' (iii) 'Whether ... the assessee is entitled to 25% depreceiation on electrical installations, when the maximum depreciation allowable on furniture and fittings during the relevant period was only 15%?' Questions (i) and (ii) are answered in favour of the assessee: question (i) is covered by CIT v. Bhari Information Tech. Sys. P. Ltd., and question (ii) is covered by this Court's earlier order in the same assessee's case (Shasun Chemicals and Drugs Ltd. v. CIT). Question (iii) concerns classification of electrical installations; precedent holds such installations qualify as furniture and fittings with 10% depreciation. Although the assessing officer allowed 15% (assessee claimed 25%), the Court declines to disturb the authorities' uniform allowance and answers the third question in favour of the Department. Appeals are partly allowed.