TaxTMI 
TaxTMI 
2004 (6) TMI 578
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....ound Nos. 14(a ), (b) & (c), Ground No. 18(a ) Ground No. 19, Ground No. 25, Ground No. 27(a ), Ground Nos. 29(c) & (f), and Item (iii ) of Ground No. 30(a). Therefore, the aforesaid grounds are dismissed. The remaining grounds in assessee's appeal are dealt with hereunder: Ground No. 3: "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in law in upholding the disallowance of Rs. 2,00,000 out of the expenses claimed under the head Gifts & Presents." 1. The Assessing Officer disallowed Rs. 5,00,000 on estimate out of the total expenditure on Gifts & Presents amounting to Rs. 10,73,994. The CIT(A) has discussed this issue vide paras 4.5 & 4.6 at pages 7 - 8 of his appellate order. 2. The Department is also in appeal vide Ground No. 1 in ITA No. 4807/D/92 for the assessment year under appeal. 3. The AR has fairly conceded that similar issue has been considered by the Appellate Tribunal in the Assessment Year 1986-87 by its order dated 10-1-2003 in assessee's appeal as well as in departmental appeal separately. The assessee's appeal as well as the departmental appeals have been dismissed in the Assessment Year 1986-87....
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.... relied on the order of the authorities below. 9. After hearing both the parties and perusing the information filed by the AR, we agree with the AR that the shortage is quite negligible. Hence, assessee deserves to succeed on this ground. The disallowance of Rs. 12.89 lakhs is deleted. Ground No. 6 : "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in law in upholding the disallowance of Rs. 1,77,128 under section 38 of the I.T. Act, 1961." 10. The AR states that the Department is also in appeal vide Ground No. 28 in ITA No. 4807/D/92 for the assessment year under reference. The ground of appeal by the assessee is against treating the expenditure on rent etc. of premises hired for residential use of employees as perquisite for the purpose of disallowance under section 40A(5) of the Act. The Assessing Officer treated 75 per cent of the expenditure as disallowable under section 40A(5) whereas the CIT(Appeals) restricted the same to 50 per cent. 11. After hearing the rival parties we find that the issue under reference has been considered by the ITAT in earlier years. In the immediately preceding assessment year the assessee did not ....
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....essment Year 1986-87 the CIT(Appeals) himself has deleted the 50 per cent disallowance made by the Assessing Officer out of retainership expenses. However, the Department's appeal before ITAT against deletion of 50 per cent of the retainership fee had been dismissed vide ITAT's order dated 10-1-2003 in ITA No. 5625/Del./91 vide paras 38 to 40 at page 6 of the appellate order. 17. The DR has relied on the Assessing Officer's order. 18. After hearing the rival parties and perusing the appellate orders with which we agree, we delete the disallowance of retainership fee of Rs. 60,000 paid to Mr. H.P. Agrawal. Similarly with regard to conveyance expenses paid to Mr. H.P. Agrawal the disallowance made by the Assessing Officer is deleted following the appellate order for the immediately preceding assessment year 1986-87 whereby vide Ground No. 6(b) and paras 34 to 36 at page 5 of the appellate order in assessee's own case in ITA No. 5623/D/91 the issue has been considered. Ground No. 8(b): "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in law in disallowing the following expenses out of expenses claimed under the head Legal & Professional....
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....so relied on the Kerala High Court decision in CIT v. P. Veeriah [1995] 211 ITR 244. 24. The DR relied on orders of the authorities below. 25. We are in agreement with the assessee's counsel that cost of mattresses; wooden elephant pieces, payment to floweriest, etc. are not in the nature of capital expenditure, hence, the disallowance of Rs. 57,838 in respect of the aforementioned items is deleted. Ground No. 11 : "That on the facts, circumstances and legal position of the case, the learned CIT(A) has erred in law in holding that the proportionate expenditure in respect of "debenture issue expenses" attributable to investment of Rs. 7.10 crores is capital expenditure and would not qualify for deduction under section 37 of the Income-tax Act." 26. This ground is against the disallowance of Rs. 1,51,970 on account of debenture issue expenses. The CIT (A) has considered the issue vide para 14, page 30 of his order and following his appellate order for the Assessment Year 1986-87, he has directed the Assessing Officer to work out the deduction on the basis as done in the assessment year 1986-87. 27. The department is also in appeal in respect of the same issue vide G....
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.... are of the opinion that the addition of Rs 2,29,327 made by the CIT (Appeals) is not called for and is deleted particularly keeping in view the Hon'ble Supreme Court decision in Groz-Beckert Saboo Ltd's case (supra). Ground No. 13 : "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in law in upholding the non-allowance of deduction admissible under section 80HHC of the Income-tax Act, 1961." 33. This ground is against non allowance of eligible deduction under section 80HHC of the Act. The AR submitted that admittedly the statutory reserve was created for Rs. 4 lakhs. Also a certificate in prescribed form was filed before the CIT (Appeals) in Form No. 10CCAB. The CIT (Appeals) has rejected the claim of the assessee on the ground that a prescribed certificate in Form No. 10CCAB had not been filed either along with the return of income or even at the time of hearing before the Assessing Officer. Therefore, the Assessing Officer was justified in disallowing the claim for deduction under section 80HHC. 34. The AR has invited our attention to a similar claim made in the immediately preceding assessment year and considered by the Tribunal, ....
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....Meeting of the Shareholders of the appellant company." 38. The similar issue came up for consideration in the immediately preceding assessment year 1986-87. This year the CIT(A) has disallowed the expenditure by following his own order for the assessment year 1986-87. The matter was considered in the assessment year 1986-87 by the Appellate Tribunal vide page 14, paras 72 to 74 of appellate order dated 10-1-2003 in appellant's own case where the similar expenditure incurred on Annual General Meeting has been held as deductible business expenditure on the ground that such meetings are held in compliance of the statutory requirements under the Company Law. It has been argued that the extraordinary general meeting is also held in compliance with the statutory requirements of the Company Law. Hence, the entire expenditure of Rs. 43,975 be allowed as admissible business deduction. 39. The DR has relied on the order of the CIT (Appeals). 40. Following the appellate order for the assessment year 1986-87 with which we agree, we direct to delete the addition of Rs. 43,975. Ground No. 16 : "That on the facts and in the circumstances of the case the learned CIT(A) has erred in ....
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....ection 37(2A) of the I.T. Act, 1961." 46. The assessee has contended that the expenditure incurred on entertainment was also towards employees participation and the reasonable proportion of such expense be allowed and excluded for the purpose of disallowance under section 37(2A) read with Explanation 2. The CIT (Appeals) has dismissed the claim on the ground that no details of employees' participation in respect of entertainment expenses incurred were filed. 47. In this connection reliance has been placed on the jurisdictional High Court's decision in the case of CIT v. Expo Machinery Ltd. [1991] 190 ITR 576 (Delhi) wherein the High Court had held that in the case of composite expenditure it was necessary to resort to an estimate in ascertaining that part of the expenses incurred on food and beverages of employees which is excluded from the purview of section 37(2A) of the Act. It further held that 35% of the entertainment expenses allowed by the Appellate Tribunal towards employees participation couldn't be said to be unreasonable. 48. The assessee has further placed reliance on the decision of Ramnath Exports (P.) Ltd. v. IAC [1992] 42 TTJ (Delhi) 441 wherein the Appella....
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....icity, water be attributed as perquisite on a fair estimation basis and balance 75 per cent be allowed as admissible business deduction in the hands of the assessee company. 51. The DR has relied on the orders of authorities below. 52. We have perused the appellate order for the Assessment Year 1986-87 (supra) where the similar issue has been considered vide paras 65 to 69 at page 10 of the appellate order in assessee's own case with which we agree and accordingly restore the issue back to the file of the Assessing Officer to decide it in accordance with the law after giving an opportunity of being heard. Ground Nos. 20(a) & (b) : "(a)That on the facts and in the circumstances of the case the learned CIT(A) has erred in law in ignoring the plea of the appellant that the expenditure on account of repairs and maintenance and depreciation on assets is not to be considered for the purposes of disallowance under section 40A(5)/40(c) of the Income-tax Act, 1961 and has further erred in law in upholding the disallowance of Rs. 3,30,000 (wrongly mentioned Rs. 2,30,000 in the impugned order) under section 40A(5). (b)That on the facts and in the circumstances of the case, the ....
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....roviding an opportunity of being heard to the assessee. Ground Nos. 21 (a) & (b) : "(a)That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in law in holding that the telephone facility provided by the Appellant company at the residence of the two directors/employees was a perquisite in their hands. (b)Without prejudice to the Ground No. 22(a) here-in-above, the learned Commissioner of Income-tax (Appeals) has erred in law in holding that the actual expenditure incurred on telephone provision at the residence of directors should be considered for the purpose of disallowance under section 40A(5) of the Income-tax Act, 1961." 57. This ground is against the CIT (A)'s order in holding that the telephone facility provided at the residence of the two director employees was a perquisite in their hands and accordingly section 40A(5) was applicable for the purpose of disallowance under that section. 58. The AR has submitted that the similar issue arose in the Assessment Year 1986-87 and the CIT(A) following his appellate order for the Assessment Year 1986-87 upheld the disallowance made by the Assessing Officer. Th....
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.... referred to in clause (5) of section 10 in view of clause (i) of 2nd proviso to section 40A(5) of the Act. He has further stated that under clause (i) of the 2nd proviso to section 40A(5), it is the nature of the payment which has been received by or due to an individual and not the actual expenditure incurred by the individual, if any, i.e. the conditions for exemption are limited to an individual in his personal assessment only. 64. It has also been stated at Bar that in personal assessment of Mr. Rajan Nanda to whom the said LTA was given, the LTA amount had been originally added by the Assessing Officer in his personal assessment but later on while giving appeal effect the same was deleted. 65. The DR has relied on the orders of the authorities below. 66. We are in agreement with the assessee's counsel and hold that in view of the specific provisions the LTA has to be excluded for working out disallowance under section 40A(5) of the Act irrespective of the actual expenditure incurred by the individual. Accordingly, we delete the disallowance of Rs. 19,616. Ground No. 23 : "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in la....
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....,500. 74. The 3rd item of Rs. 1,29,996 represents the expenditure incurred in connection with the Founders' day celebrations. It has been claimed as revenue expenditure. However, the authorities below have treated the same in the nature of entertainment expenses. It has been submitted by the AR that the Founder's day is celebrated once in a year by the Management as well as employees of the assessee company. He has contended that the break up of such expenditure is given in statement of facts filed before the CIT (A), vide item (vi) under Ground No. 26. In this connection he has filed the copy of Statement of facts filed before the CIT (A) along with the appeal memo and is contained an Annexure 'C' in the Paper Book. At page 11 of the Annexure 'C' the nature of the expenditure of Rs. 1,29,996 is given which is comprised of service awards given to various employees of the assessee company, cost of photographs taken on the occasion of function and the dinner expenses. The dinner expenses are Rs. 46,950 out of Rs. 1,29,996. He has placed reliance on the decision of Bombay High Court in the case of CIT v. Merck Sharp & Dohme of India Ltd. [1983] 140 ITR 332 and the jurisdictio....
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.... that in the case like this where huge transactions are involved it may not be possible to make all adjusts during the accounting year. According to the Tribunal the real test was whether the adjustments were bona fide or not. 79. The DR has relied on the orders of authorities below and has agreed that the issue is covered in favour of assessee in earlier years. 80. Respectfully following the orders of earlier year(s), the disallowance of Rs. 62,250 is deleted. Ground No. 26 : "That the learned CIT (A) has erred in law in upholding the action of the Assessing Officer in rejecting the claim of the appellant regarding deduction of Sur-tax liability while computing total income. 81. This ground is against rejection of the claim of sur-tax liability while computing total income. This AR fairly admits that this ground is covered against the assessee and is, therefore, dismissed. Ground No. 27(b) : "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in law in upholding the disallowance of Rs. 16,42,246 out of travelling expenses." 82. This ground is against the ad hoc disallowance of Rs. 2 lakhs over and above Rs. 14,42,246 offere....
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....t page 48 of the assessment order. 89. The AR submits that the Commission paid to dealers is in the nature of discount, service charges, overriding commission etc. etc. He further submits that perusal of page 54 of the assessment order where the Assessing Officer has given the figures of total Commission for the Assessment Years 1982-83 to 1987-88 would reveal that in past only the Commission paid to third parties on Government sales has been the subject-matter of dispute and the Commission/Discount paid to dealers/stockist had not been subjected to any such proportionate disallowance in earlier years. He has also submitted that in the immediately subsequent Assessment Year 1988-89 the Commission paid to dealers/stockist has been disallowed at the rate of 20 per cent of such expenditure by following the assessment order for the Assessment Year 1987-88 which is under appeal and the appeal for the Assessment Year 1988-89 being ITA No. 2923/Del./98 is pending before this Tribunal. He has further submitted that the Assessing Officer while completing the assessment for the Assessment Year 1989-90 has dealt with the issue of Commission & Discount vide pages 29, para 42 of the assessme....
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....n found as a fact one way or the other and the parties have allowed that position, it would not be at all appropriate to allow the position to be changed. 92. The DR has relied on the orders of the authorities below. 93. We have heard both the parties and found that there has neither been any disallowance in earlier years of this nature nor in subsequent years except in the immediately subsequent assessment year 1988-89 that so on the same basis as in the Assessment Year 1987-88. The bona fide and genuineness of the expenditure is not under challenge. The Assessing Officer has in our opinion incorrectly disallowed ad hoc 20 per cent of the expenditure. Respectfully following the jurisdictional High Court decisions and the decisions of the Apex Court cited before us, we delete the disallowance of Rs. 51,63,000. Ground Nos. 29 (a),(b), (d) & (e) : "(a)That the learned CIT(A) has erred in law in rejecting the claim of Depreciation of Rs. 1,47,712 under section 32 of the Income-tax Act in respect of the flats at Bombay. (b)That on the facts and in the circumstances of the case, the learned CIT (A) has erred in law in holding that 1/3rd of the buildings, out of the tot....
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.... Misc. Plant & Machinery (Rs. 24,766) as stated in the beginning of the appellate order has not been pressed and accordingly dismissed. 98. The Assessing Officer has disallowed the claim vide annexure to the assessment order. The CIT(A) has held that LPG tank cannot be treated as plant and accordingly the action of the Assessing Officer in disallowing investment allowance on LPG tank confirmed. He also confirmed the disallowance of investment allowance on Effluent treatment plant. 99. The AR has submitted that the Effluent treatment plant is for disposal of waste containing cyanide particles and other chemicals, which arise during the course of manufacturing activities before discharging the said waste in sewage to avoid environmental pollution. The wastage is processed through clarifiers and finally discharged in sewage tank. He has submitted that the use of Effluent treatment plant is incidental to the manufacturing activities of the assessee company and also in compliance with anti pollution laws. The CIT (A) has confirmed the order of the Assessing Officer in rejecting the claim of investment allowance on Effluent treatment plant on the ground that nothing has been produc....
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..... By way of this ground the assessee has objected to the rejection of its claim of investment allowance on account of increase in cost of plant & Machinery due to foreign exchange variation in relation to assets acquired/installed during the earlier year(s). 105. The department is also in appeal vide Ground No. 27 in ITA No. 4807/Del./92 whereby it has objected to the directions of CIT (Appeals) to allow investment allowance on the value of plant & machinery on account of variation in exchange rates. 106. The Assessing Officer has rejected assessee's claim on the ground that the investment allowance on exchange variation in respect of plant & Machinery installed in previous year is not admissible since by incurring said expenditure no plant & Machinery is installed during the year. 107. The CIT (A) has considered the issue vide para 41.3 at page 125 of his appellate order. The CIT(A) while deciding the issue partially in favour of the assessee has held that so far as the plant & machinery that has been acquired and installed during the year or acquired during the preceding year and installed during the year under appeal is concerned increase in liability for making provisi....
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....riation in respect of machinery installed during the year under appeal. In this connection he has also placed reliance on the jurisdictional Delhi High Court judgment in the case of All India Lakshmi Commercial Bank Officer's Union v. Union of India [1984] 150 ITR 1^3 wherein the Court has held that the Income-tax authorities acting anywhere in India have to respect the law laid down by a High Court whether of the State in which they are functioning or of a different State in the absence of any contrary decision of any other High Court. 110. The DR has relied on the orders of the authorities below and has not referred to any contrary decisions to the Gujarat and Madras High Courts cited by the assessee's counsel. 111. We have carefully considered the submissions of both the sides and we find substantial merit in the submissions of the learned counsel for the assessee. Respectfully following the High Courts decisions of Gujarat and Madras and also Delhi as mentioned hereinabove, we hold that the assessee would be entitled to investment allowance on entire exchange variation irrespective of the fact that whether the same relates to assets acquired/installed during the current y....
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....ution to EDDAL." 117. This ground is against deletion of addition of Rs. 13,56,310 being dealers contribution to EDDAL. 118. The DR has relied on the orders of the Assessing Officer. 119. The issue is covered by our appellate order dated 10-1-2003 (supra) in departmental appeal and relying on the order of the ITAT in earlier year with which we agree we dismiss this ground and uphold the order of the CIT(A). Ground Nos. 3(i), (ii) & (iii) : (i)On the facts and in the circumstances of the case of CIT(A) has erred in directing to bifurcate the expenditure on account of debenture issue in the ratio of 27.90 to 7.10. (ii)in allowing the proportionate expenditure in the ratio as 27.90 aforesaid, as revenue expenditure when whole of such expenditure is covered under section 35D(2)(c)( iv) of the Income-tax Act, including underwriting commission, brokerage and packing and advertisement of prospectus. This expenditure having been incurred in connection with the extension of industrial undertaking and setting up of a new industrial unit, is not allowable under section 37(1) of the Income-tax Act. (iii)in directing the Assessing Officer to allow proportionate expenditure ....
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....allowance of Rs. 1,20,040 following the appellate order for the assessment year 1986-87. The CIT(A)'s order for the assessment year 1986-87 has been upheld by the Appellate Tribunal vide its order dated 10-1-2003 (supra) vide paras 118 to 120 at pages 16 & 17 of the appellate order in departmental appeal and the departmental appeal on this ground has been dismissed with which we agree. We accordingly dismiss this ground of the revenue. Ground No. 6 : "On the facts and in the circumstances of the case the CIT(A) has erred in deleting a sum of Rs. 39,268 on account of interest paid to HUDA." 126. This ground is against the deletion of Rs. 39,268 on account of interest paid to HUDA. The Assessing Officer vide para 37 at page 21 of the assessment order disallowed the expenditure towards interest paid to CWC and HUDA for the reasons given in the assessment proceedings for the immediately preceding assessment year. The CIT (A) has also followed his appellate order for the immediately preceding assessment year 1986-87. 127. The DR has relied on the order of the Assessing Officer whereas the AR has placed reliance on the CIT(A)'s order for the year under appeal. 128. Admitte....
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....has erred in holding that cash allowance like HRA, Soft furnishing allowance etc. do not constitute perquisite for computing the disallowance under section 40A(5) of the Income-tax Act." 134. This ground is against CIT(A)'s order holding cash allowances do not constitute perquisite for the purpose of disallowance under section 40A(5) of the Act. Admittedly, this ground is covered vide appellate orders for the assessment year 1986-87 and also of the appellate order in assessee's own case for the assessment years 1984-85 and 1985-86. The relevant text of the ITAT's order for the assessment year 1984-85 and 1985-86 are contained in the Paper Book pages 1 to 5 and 6 to 9. 135. We have carefully perused the appellate orders for the earlier years with which we agree and accordingly dismiss the departmental appeal on this ground. Ground No. 10 : "On the facts and in the circumstances of the case, the CIT(A) has erred in holding that the concessional interest on loan does not amount to perquisite for the purpose of disallowance under section 40A(5)." 136. This ground is against the CIT (A)'s order holding that the concessional rate of interest on loans does not amount to per....
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....has relied on the Assessing Officer's order whereas the AR has relied on CIT (A)'s order. 143. It has been stated by the AR that similar issue had come up for consideration vide paras 57 to 59 at page 8 of the appellate order dated 10-1-2003 in departmental appeal for the assessment year 1986-87 whereby the departmental appeal on this ground stands dismissed. 144. We have perused the order of the appellate Tribunal for the assessment year 1986-87 and uphold the order of CIT(A). This ground is dismissed accordingly. Ground No. 13 : "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in holding that the medical expenses reimbursed by the employer does not constitute perquisite for the purpose of computing disallowance under section 40A(5)." 145. This ground is against deletion of disallowance of reimbursement of medical expenses treated as perquisite for the purpose of section 40A(5) of the Act. The DR has relied on the order of the Assessing Officer whereas the AR has relied on the order of CIT (A). 146. It has been stated by the AR that the issue stands settled by the Apex Court in the following cases :- 1. CIT v. Mafatlal Gangabhai & C....
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....llate order and has deleted the addition following his appellate order for the assessment year 1986-87. The order of CIT (A) stands confirmed by the ITAT in assessment year 1986-87 vide paras 28 to 32 at page 5 of the appellate order in departmental appeal. 154. Relying on the appellate order for the earlier assessment years, we dismiss the departmental appeal and uphold the order of the CIT(A). Ground No. 16 : "On the facts and in the circumstances of the case, the CIT (A) has erred in deleting the addition of Rs. 2,00,000 made to the total income on account of commission assessable on accrual basis." 155. This ground is against the CIT (A)'s order where he deleted the estimated addition of Rs. 2,00,000 on account of Commission made by the Assessing Officer on accrual basis on the ground that details of Commission received on accrual basis have not been furnished. It has been stated by the AR that the similar issue came up for consideration before the Appellate Tribunal in departmental appeal vide paras 33 to 37 at page 5 of the Appellate order dated 10-1-2003 in departmental appeal for the assessment year 1986-87 and the departmental appeal on this ground stands dismi....
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.... in the production of hydraulic pumps, hydraulic cylinders and crank shafts, etc. 163. The issue has been considered in details by the CIT(A) vide item (i), para 27 at pages 67 to 71 of his appellate order. The AR submits that the CIT (A) had considered every aspect of the matter and came to the conclusion that the expenses incurred on viability, feasibility and market research studies by the assessee is held to be for the purpose of earning dividend income. 164. The DR has placed reliance on the order of the Assessing Officer whereas the AR has relied on the order of the CIT (Appeals). 165. We have perused the order of the CIT (Appeals) carefully and find that the CIT (A) has allowed the expenses vide item 1 (a) at page 70 of his appellate order and in doing so he has relied on the decision of the Apex Court in the case of CIT v. Rajendra Prasad Moody [1978] 115 ITR 519. Further, though he has accepted the contention of the assessee that the amount of Rs. 8,89,332 will be allowed as expenditure against the dividend income received by the assessee company, but at the same time he has directed the Assessing Officer to reduce the dividend income by that amount for the purpos....
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....CIT(A) had restored the issue to the file of Assessing Officer holding that participation of employees in the club activities definitely promotes cause of the assessee company and as such expenses on membership fee only (Emphasis supplied) will be an admissible deduction under section 37(1). 173. We have heard both the parties and perused the order of CIT (A). No interference is called for on the CIT(A)'s order on the ground under reference and accordingly revenue's ground against deletion of Rs. 30,186 is dismissed. Ground No. 21 : "On the facts and in the circumstances of the case the CIT(A) has erred in directing to allow depreciation and extra shift allowance on notional increase in the value of assets on account of variation in the exchange rate without appreciating the facts that as per provisions of section 43A of the Income-tax Act the cost of any asset is to be increased only by the amount of increase in the liability on actual payment." 174. This ground is against the deletion of disallowance of depreciation and Extra Shift Allowance (ESA) on exchange rate variation amounting to Rs. 81,71,331 by the Assessing Officer and deleted by the CIT (A). 175. The Ass....
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....n the order of the Assessing Officer. The AR has contended that the issues as raised in assessee's ground being Ground No. 29(a) and revenue's ground being Ground No. 22 are covered by the Appellate orders of earlier years. Further, the issue has since been settled by the Hon'ble Supreme Court in the case of Mysore Minerals Ltd. v. CIT [1999] 239 ITR 775 . 182. We have perused the order of the Hon'ble Supreme Court and also the appellate orders for earlier years with which we agree and accordingly dismiss the Departmental appeal on this ground and uphold the order of CIT(A). It is appropriate to mention here that the ground relating to depreciation in assessee's appeal with respect to flats at Bombay has been considered by us vide Ground No. 29(a) in assessee's appeal and the same has been allowed in its favour. Ground No. 23 : "On the facts and in the circumstances of the case the CIT(A) has erred in directing to allow extra shift allowance on the items listed below :- (a)D.G. Set (b)Underground cables (c)Transformer (d)Generator Set (e)Power transmission lines" 183. This ground is against the rejection of claim of Extra Shift Allowance (ESA) in respect ....
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....f 5 per cent as allowed by the Assessing Officer. The AR relied on the order of CIT(A). 190. We have perused the appellate order of CIT(A) and do not find any infirmity in that order. We, therefore, dismiss the Departmental ground and uphold the CIT(A)'s order on this ground. Ground No. 25 : "On the facts and in the circumstances of the case the CIT(A) has erred in directing to allow investment allowance on the following items : (i)D.G. Sets (ii)Transformer (iii)Underground cables (iv)Material handling equipment (v)Power Plant Transmission." 191. This ground is against the direction to allow investment allowance on the following items : (i)D.G. Sets (ii)Transformer (iii)Underground cables (iv)Material handling equipments (v)Power Plant Transmission 192. The DR has relied on the order of Assessing Officer. However, he agrees that this ground is covered in favour of the assessee by the earlier orders of ITAT. The ITAT has considered this issue in earlier years and has allowed investment allowance on such assets based on functional tests. The orders of the ITAT have been filed before us as under : (i)Relevant text of the consolidated ITA....