TaxTMI 
TaxTMI 
2003 (12) TMI 277
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....tion and when the assessee has not been able to establish as to how such payments were incidental to the business." 6. While completing the assessment Assessing Officer disallowed Rs. 44,200 on account of donation observing that donations were inadmissible. In appeal CIT (A) deleted the same accepting the donation of the assessee that the assessee was required to incur expenditure under donations and subscriptions in normal course of running of his business and expenditure was allowed fully and exclusively for the purpose of business. Aggrieved with the finding of the CIT (A) revenue is now in appeal before us on this ground. 7. Ld. Departmental Representative before us strongly opposed the finding of the CIT (A) and submitted that CIT (A) has accepted the contention of the assessee without apprising the fact that the assessee had failed to prove that the expenses were incidental to business. On the other hand ld. Counsel for the assessee submitted that donations and subscriptions were made during the course of regular business of the assessee. He also submitted that the same has been proved by the assessee before the CIT (A) and has established that donations were meant and ....
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....inding and conclusion by the CIT (A) is not tenable because the Assessing Officer disallowed such expenses on the basis of nature of expenditure booked under sales promotion expenses. He also submitted examples of such expenditure observed by the Assessing Officer which are being reproduced here: Rs. "1. CV050012, dated 4-5-1989 Expenditure to entertain Brig. S. Mohapatra and family Dehradun 1308 2. JV-060039 dated 27-6-1989 Presentation in the wedding of Mr. A. Agarwal &nb....
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....red view that from the material on record and the nature of expenses debited in sales promotion expenses as cited by the ld. DR in his written submission mentioned above, the assessee has wrongly debited the other expenses not in the nature of sales promotion expenses as same were not incurred for any sales promotion as evident from the written submission of the ld. DR. The assessee has also failed to prove the genuineness and details of such expenses for and wholly for its business. Therefore we sustain the addition made by the Assessing Officer on this ground and delete the finding of the CIT (A). 14. In the result the Revenue's appeal on this ground is allowed. 15. Now we take up CO.27/CTK/2000. CO.27/CTK/2000: 16. Ld. Counsel for the assessee informed the Bench that he is not pressing the CO. Therefore the same is dismissed. 17. Now we take up the assessee's appeal i.e. ITA.153/CTK/2000. ITA.153/CTK/2000: 18. The assessee in his appeal has taken the following grounds of appeal: "1. That the Ld. CIT (A) erred in confirming the action of the Assessing Officer in not allowing investment allowance of Rs. 12,80,285 on Rs. 64,01,426 being increase in cost of plan....
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....uctuation but the time limit for deduction of investment allowance. He further held that as regards to actual cost of plant and machinery there was no dispute and the Assessing Officer had also not disputed the fact that the cost of the plant and machinery goes up on account of exchange fluctuation. The CIT (A) also mentioned that as per section 32A of the Act investment allowance has to be allowed in the year in which the plant and machinery were installed or if plant and machinery is first to be used in the immediately succeeding previous year other than that year. After considering the above fact, CIT (A) upheld the finding of the Assessing Officer and confirmed the disallowance by the Assessing Officer on this ground. Aggrieved with the order of the CIT (A) the assessee is now in appeal before us. 21. Ld. Counsel of the assessee before us strongly opposed the finding of the lower authorities and submitted that in the course of provisions of section 43A r/w section 43(1), the assessee increased the actual cost of machinery by the said amount in its books and claimed investment allowance admissible under section 32A of Rs. 12,80,025. He relied on the order of the CIT v. Motor ....
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....ection 43A. 23. The ld. DR also strongly objected to the interpretation of section 43A by the ld. Counsel of the assessee and argued that section 43A is a Special provision consequential to changes in rate of exchange of currency and it provides for corresponding change in the cost of the assets. It only speaks as to computation to actual costs due to exchange fluctuations. The ld. DR submitted that the claim of the assessee/appellant could have been admissible if the fluctuation in the exchange rate of foreign currency was taken place in the year of installation or in the year of use. He also submitted that decision of Hon'ble Patna High Court was not applicable in this case as in the above case the plant and machinery were installed and put to use from October, 1988 when the company commenced its commercial production. In the year under assessment 1989-90 corresponding to the accounting year 1988-89 ending on 31-3-1989 the assessee increased the cost of plant and machinery by a particular amount on account of fluctuation in exchange rates and claimed investment allowance on the increased costs. Therefore Hon'ble Patna High Court allowed the claim of investment allowance under ....