TaxTMI 
TaxTMI 
2011 (5) TMI 578
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....e Tax Act, 1961, in short the Act. On appeal, the learned Commissioner of Income Tax (A) partly allowed the appeal. 3. Being aggrieved by the order of the learned Commissioner of Income Tax (A), the assessee is in appeal before us. 4. Ground no.1 is against the sustenance of disallowance of expenditure of rural development Rs.1,09,270/-. 5. It was disallowed by the AO on the ground that the expenditure has no nexus with the business carried out by the assessee. On appeal, the learned Commissioner of Income Tax (A) while observing that this is an old issue and was decided against the assessee by the Tribunal in assessee's own case for the assessment year 1989-90 vide order dated 18.10.2001, upheld the disallowance made by the AO. 6. At the time of hearing, the learned counsel for the assessee submits that since the Tribunal has decided the issue against the assessee and in favour of the revenue, therefore the issue may be decided accordingly. 7. On the other hand, the learned DR supports the order of the AO and learned Commissioner of Income Tax (A). 8. Having carefully heard submissions of the rival parties and perusing the material a....
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....le while computing the income of the assessee and accordingly confirmed the disallowance made by the AO. Respectfully following the said order of the Tribunal (supra) we are inclined to uphold the order passed by the learned Commissioner of Income Tax (A) in confirming the disallowance made by the AO. The ground taken by the assessee is therefore, rejected. 14. Ground no.3 is against sustenance of disallowance of bad debts of Rs.5,33,452/-. 15. The AO observed that the assessee has made claim of doubtful bad debts amounting to Rs.5,33,452/-. The assessee was asked to furnish the details. However, the assessee neither produced the details nor filed documentary evidence to show that the debts become bad including the correspondence made for recovery of debts. In the absence thereof, the AO made a disallowance of bad debts of Rs.5,33,452/-. On appeal, the Learned Commissioner of Income Tax (A), in the absence of any supporting material upheld the disallowance made by the AO. 16. At the time of hearing, the learned counsel for the assessee submits that the Tribunal in the assessee's own case for the assessment year 1998-99 in ITA No.3450/Mum/2004 dated 8.10.2010....
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....ndury Farm Limited, which was engaged in purchase of milk from outside parties and was selling it mainly to the assessee company. From the verification of the records of the assessee company at Indury, it was found that the production log sheet of fat maintained at the factory compared with the figures shown in the books of accounts/excise register showed a difference of 52,826 kgs. The assessee was asked to explain these discrepancies in response to which it was submitted that the quantity as per production log sheet was not correct and that the actual recording was made in Finished Stock Transfer Note, which was matching with the excise records. Further it was also submitted that milk fat sold by transfer through the storage tank was mentioned in Finished Stock Transfer Note and not in production log sheet. However, it was noticed that the Finished Stock Transfer Note figures were not available for the entire year and that the quantities mentioned in the excise registers had also difference with reference to log sheet on daily basis and there were noting sometimes after a gap of 3-4 days. Thus considering this discrepancies the AO calculated the amount of fat and excess productio....
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....at of 50 Kgs. then on the basis of the production log-sheet, the total fat produced during the year come to 4,17,476 kgs. only and while as per the excise register the total milk fat production is declared at 4,70,674 kgs. In our opinion, production log sheet (PLS) which was found during the course of survey action cannot be said to be conclusive as even as per the AO it is normally 50Kgs. It is also seen that the ld. CIT(A) raised certain queries in respect of certain dates viz 9th April, 11th April and 13th April etc as some discrepancy was found in the production log-sheet. It is seen that on those days there is no mention of milk fat cans produced in the production log-sheet. The observation of the ld. CIT(A) it appears to be contrary to the record of the assessee. 72. After considering the totality of the facts, we are of the opinion that there is no justification to support the addition made by the AO. We, accordingly, delete the addition made by the AO for alleged sales of the milk fats out of the books of account. Accordingly, ground no.5 is allowed." In the absence of any distinguishing features brought on record by the revenue, we respect fully following t....
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....ity of the assessee and this income is generated from the Cocoa seeds which is the raw material of the assessee. In our opinion, the miscellaneous income is to be included in the total turnover. At the same time, Explanation (baa) to sect ion 80HHC is not applicable to this income as it is an operational income and as well as it is not in the nature of interest, commission or brokerage etc as contemplated in the Explanation (baa). We, therefore, direct the AO that the miscellaneous income shown by the assessee should be included in the total turnover and not to reduce 90% of the said income while computing the profits of the business by applying Explanation (baa). Accordingly, ground no.4 is partly allowed." In the absence of any distinguishing features brought on record by the learned counsel for the assessee, we respect fully following the order of the Tribunal direct the AO that the miscellaneous income shown by the assessee should be included in the total turnover. However, with regard to the exclusion of 90% of the said income while computing the profits of the business, we respect fully following the decision of Hon'ble Supreme Court in CIT V/s K.Ravindranathan Nair [....
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....e parties. The argument of the ld. Counsel is that the above items are not alike or analogous to the items mentioned in Explanation (baa) below section 80HHC, hence, 90% exclusion is not correct. So far as the Leave and License fee of Rs.13,500/ - is concerned, in our opinion, it is like a rent only and it is an independent income having no nexus with the export of the assessee. Hence, the AO has rightly excluded 90% of the same. So far as discount is concerned, nothing is placed before us to show that it has got some nexus with the export of the assessee. We, therefore, confirmed the order of the AO due to lack of evidence before us, as otherwise, it partakes the character of the independent income. So far as the amount of the insurance claim is concerned, in our opinion this issue needs to go back to the AO as the nature of the insurance claim is not clear. If the insurance claim is in respect of trading or export goods then it cannot be reduced by applying Explanation (baa) to section 80HHC. We, therefore, direct the AO to verify the nature of the insurance claim and decide the issue in the light of our above observation. Accordingly, ground no.6(b) is allowed for statistical pu....
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.... circumstances of the case the CIT(A) ought to have directed the AO to grant them a deduction of Rs.29,52,968/-. Your appellant pray that the AO be directed accordingly. 3. The CIT(A) erred in holding that the AO was justified in not granting a deduction of Rs.1,39,753/- being bad debts written off during the year. Your appellants submit that having regard to the facts and circumstances of the case and the provisions of law, the CIT(A) ought to have directed the AO to grant your appellants the deduction of Rs.1,39,753 in computing their business income. Your appellant pray that the AO be directed accordingly. 4. The CIT(A) erred in holding that the AO was justified in adding an amount of Rs.12,32,500/- as sales not recorded in the books of accounts. Your appellants submits that on the facts and circumstances of the case the CIT(A) ought to have directed the AO to delete the addition of Rs.12,32,500/-. Your appellants pray that AO be directed accordingly. 5(a) The CIT(A) erred in holding that the AO was justified in considering miscellaneous income amounting to Rs.1,03,01,709/- as a part of total turnover for the purpos....
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....n paragraph 28 of this order reject the ground no.5(a) taken by the assessee. 43. With regard to ground no.5(b), we for the reasons as mentioned in paragraph 33 of this order hold that the AO was justified in excluding 90% of the receipt of interest of Interest Rs.1,63,01,564/- and other income of Rs.23,85,267/- in view of the Explanation (baa) to Section 80HHC of the Act. However, the issue of insurance claim, for the reasons as mentioned in paragraph 33 of this order set aside the issue to the file of the AO to follow our direction mentioned therein and hence the ground taken by the assessee is partly allowed for statistical purpose. 44. Ground no.6 is against the computation of capital gain on sale of land at Thane. 45. At the time of hearing, the learned counsel for the assessee submits that he does not want to press the above ground which was not objected to by the learned DR. 46. That being so and in the absence of any supporting material placed on record by the learned counsel for the assessee, the ground taken by the assessee, is therefore, rejected. 47. Ground no.7 is against the netting off interest received from the Income Tax Depa....