TaxTMI 
TaxTMI 
2011 (12) TMI 376
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....covered against the assessee by the decision of the coordinate bench of this Tribunal in assessee's own case for the assessment year 2003-04. We find that the Tribunal following the earlier years decision on identical facts, decided the issue against the assessee. The relevant portion of the order extracted from the assessment year 1998-99 is as under: "13. We find under identical facts the Special Bench of the Tribunal in the case of Mukund Ltd., [supra], after considering various decisions including the decision of the Hon'ble Bombay High Court in the case of CIT vs AT. Khimline Pumps Ltd. [supra] and the various other decisions cited by both the sides has held in that case that the consideration of Rs.2.04 crores paid by the assessee for obtaining leasehold land from Maharashtra Industrial Development Corporation in its favour for a period of 99 years was capital in nature and accordingly, it was held that the same was not allowable as deduction. We find the Tribunal at para 26 of the order has observed as under: "26. We find that the facts of the case before us are similar to the facts of the case in the case of Khimline Pumps Ltd. (supra). We are not impres....
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....796 (SC), Aditya Minerals (P) Ltd. vs.CIT 239 ITR 817 (S.C) and Hon'ble jurisdictional High Court in the case of Khimline Pumps Ltd. 258 ITR 459 (Bom) would squarely apply to the facts of the case of the assessee, and being binding in nature, we decide the issue in ground of appeal No. 10 of the Revenue in favour of the Revenue and the ground of appeal No. 10 of the Revenue is allowed and the issue referred to the Special Bench by the President, Tribunal is answered in the negative and in favour of the Revenue'. 14. Further, we also do not find any merit in the chart filed by the assessee to justify the savings on account of lower rent paid per sq.ft. as against the higher rent, since this, in our opinion is only a self serving document without any authenticity. Since the facts of the present case are identical to that of the case (Mukund Ltd. [supra]) decided by the Special Bench of the Tribunal, which in turn has followed the decision of the Hon'ble jurisdictional High Court in the case of Khemline Pumps Ltd. [supra], therefore, respectfully following the same, we hold that the CIT[A] was justified in upholding the AO's action in treating the payment of lease premium am....
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.... on 17.06.1997 relevant for assessment year under consideration. The CIT(A) did not allow the same stating that the bills were dated 01.07.1996. Even though the originals were dated 01.07.1996, the claim was made by the concerned person vide letter dated 22.05.1997 which pertains to the year under consideration. Therefore, it can be considered that the liability has crystallised during the year. Accordingly the A.O. is directed to allow the amount. 3.5 Meeting and Conference Expenses of Rs.8,5321/-: This expenditure pertaining to meeting held of trading members at Bangalore. It was the submission that the bill dated 01.07.1996 was not received from the party and copies of the bills were sent on 22.05.1997, therefore the amount was claimed in this year. After examining the dates involved, we are of the opinion that the amount has crystallised during the year. Assessee could not have made provisions in the absence of bill raised on it and since copies of the bills were received for the first time on 22.05.1997 the same can be considered as crystallised during the year. Accordingly the amount is an allowable expenditure. The A.O. is directed to allow the amount." 9....
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....ng the same as one time capital expenditure and the reasons assigned by him for doing so are wrong and contrary to the facts and circumstances of the case, provisions of the Income tax Act, 1961 and Rules made thereunder." 12. Facts in brief are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee has debited an amount of Rs.46,04,734 on account of Y2K expenses. In response to Assessing Officer's query as to why the same should not be treated as capital expenditure, it was submitted by the assessee that the expenses are in the nature of consultancy charges and system evaluation charges paid to TCS and Mastek Ltd on account of Y2K expenses and, therefore, taken as revenue expenditure. The explanation of the assessee was not acceptable to the Assessing Officer. He was of the view that the Y2K expenses were incurred for redesigning the computer system to make it compatible for any change required on account of year 2000 in the computer system, which has resulted in enhancing the capabilities of the computer system and underwent enduring benefit to the assessee. He also observed that the Director's report to the Members make it cle....
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....s disallowance. We delete the same. 15. Ground No. 3 is thus allowed. 16. In ground No.4, the assessee has raised the following grievance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in confirming the disallowance of expenditure of Rs.6,83,441 being 0.5% of gross interest income and reducing exemption u/s.10(15) of the I.T.Act, 1961 assuming that an expenditure of Rs.6,83,441 must have been incurred for earning gross interest and the reasons assigned by him for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income tax Act, and the rules made thereunder." 17. The Assessing Officer, in Ground No.3, has raised the following grievance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in restricting the expenditure connected with earning of interest income exempt u/s.10(15) from 2% to 0.5% without appreciating that the disallowance made by the AO was quite reasonable." 18. Facts in brief are that the Assessing Officer disallowed Rs.27,33,764 being estimated expenditure @ 2% for earning gross interest of Rs.13.66 c....
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....es of the case and in law, the lower authorities ought to have allowed deduction of a sum of Rs.2,06,354 being prior period expenses disallowed as deduction in assessment year 2000-2001 and not doing so is wrong and contrary to the facts and circumstances of the case, provisions of the Income tax Act, 1961 and rules made thereunder." 25. Given our findings earlier in this order that the prior period expenses are allowable as deduction, it is not really necessary to deal with this ground of appeal. The same is dismissed as infructuous. 26. In Ground No.1, the Assessing Officer has raised the following grievance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in directing the AO to treat the expenditure of Rs.48,55,283 as revenue expenditure without appreciating the fact that the assessee cannot be said to have gain a new and different advantage and benefit of enduring nature by incurring these expenses." 27. Facts in brief are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed an amount of Rs.48,55,283 as revenue expenditure towards shifting of VSAT.....
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....nsidered by the CIT(A) as revenue expenditure. We reject the ground." 29. Respectfully following the same, we uphold stand of the CIT(A) and decline to interfere in the matter. 30. Ground No.1 of the Assessing Officer is thus dismissed. 31. In Ground No.2, the Assessing Officer has raised the following grievance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in directing the AO to grant interest of Rs.1,36,61,761 u/s.36(1)(iii) without appreciating that the assessee itself has capitalized the interest in the books of account and the interest related to the period prior to the use of the assets." 32. The Assessing Officer noticed that the assessee has claimed interest amount of Rs.1,36,61,761 received from Syndicate Bank, on the loan obtained for purchase of capital assets as allowable expenditure. The AO also noticed that although the said amount has been capitalized in the books of account of the assessee towards the cost of acquisition of the capital assets, the assessee has claimed the amount as revenue expenditure allowable under section 36(1)(iii) of the Act. The Assessing Officer disallowed....
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...., we find that the Hon'ble Supreme Court in the case of JCIT vs. United Phosphorous Ltd., 229 ITR 9 (SC) has held that the interest paid in respect of borrowings for capital asset not put to use in the concerned financial year is an allowable deduction under section 36(1)(iii) of the Income Tax Act. The same view has again been taken by the Hon'ble Supreme Court in the case of ACIT vs. Arvind Polycot Ltd. reported in299 ITR 12 (SC). In view of the decision of the Hon'ble Supreme Court cited above, the interest expenditure claimed by the assessee has to be allowed as revenue expenditure. The ground raised by the assessee is accordingly allowed and the ground raised by the Revenue on this issue is dismissed." 17. Since the issue is already covered against Revenue and in favour of the assessee and since the CIT(A) followed earlier year's order for allowing in this year, we uphold the order of the CIT(A) in allowing it as revenue expenditure. Therefore, the ground of the Revenue is rejected." 35. We see no reasons to take any other view of the matter than the view so taken by the coordinate bench, and we are in considered agreement with the same and, accordingly, up....
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....Having heard the rival contentions and perused the material on record, we find that the Hon'ble Madras High Court in the case of Southern Roadways Ltd (supra) has held that the expenditure incurred on replacement on UPS system and on replacement of printer was revenue expenditure. The assessee has purchased new software amounting to Rs.9,58,845,inter alia, for updation of the existing software for smooth functioning of the computer. From the assessment order, it reveals that the amount of Rs.9,58,845 includes purchase of different types of soft wares from nine different parties. The ITAT Delhi in the case of Amway India Enterprises (supra) has stipulated some guidelines for allowing the claim of the assessee in respect of software expenses. Therefore, we set aside the order of the CIT(A) and direct to decide the afresh based on the guidelines laid down in Amway Enterprises case (supra) and in view of the judgment of Hon'ble Madras High Court in the case of Southern Roadways Ltd(supra). 45. Ground No.2 is treated as allowed for statistical purposes. 46. Ground No.3 of the assessee pertains to prior period expenses of Rs.2,06,354. 46. In view of our disc....
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....allowed. Assessment Year: 2002-2003: 58. In Ground No.1, the assessee is aggrieved by the CIT(A)'s making disallowance of shifting expenses amounting to Rs.98,57,966 and similar issue has been taken by the Assessing Officer in Ground No.1 of the revenue's appeal. 59. This ground is similar to ground No.1 of the revenue for the assessment year 1999-2000. In line with our decision of even date for the assessment year 1999- 2000, in paras 27 and 28, we uphold the grievance of the assessee and reject the ground taken by the revenue. 60. Ground No.1 of the assessee is thus allowed and Ground No.1 of the revenue is dismissed. 61. In Ground No.2, the assessee is aggrieved by the CIT(A)'s making disallowance of lease premium paid to BMRDA amounting to Rs.1,25,09,468. 62. This ground is similar to ground No.1 taken by the assessee for the assessment year 1999-2000. In line with our decision of even date, we reject this ground. 63. Ground No.2 of the assessee is thus dismissed. 64. Ground No.3 of the assessee pertains to confirmation of disallowance of Rs.1,19,212 as prior period expenses. 65. This grou....
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....s dismissed. 78. As regards ground no. 2, we have already dealt with the same alongwith assessee's related grievance. 79. In Ground No.3, the Assessing Officer has raised the following grievance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in directing the AO to grand depreciation as claimed by the assessee on VSAT equipment installed at the premises of the member broker as against proportionate disallowances made by the AO by invoking the provisions of section 38(2)." 80. Learned representatives fairly agree that this issue is also covered, in favour of the assessee, by orders of the coordinate benches in assessee's own case for the assessment years 1997-98, 2001-02 and 2003-04. Copies of these orders were placed on records before us. In this view of the matter, and respectfully following the coordinate benches, we uphold the order of the CIT(A) on this aspect as well and decline to interfere in the matter. 81. Ground No. 3 is also dismissed. 84. In Ground No.4, the Assessing Officer has raised the following grievance: "On the facts and in the circumstances of the case and ....
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....ld the grievance of the assessee. 92. Ground No.2 is thus allowed. 93. In Ground No.3, the assessee is aggrieved by the CIT(A)'s making disallowance of lease premium paid to BMRDA amounting to Rs.1,28,37,644. 94. This ground is similar to ground No.1 taken by the assessee for the assessment year 1999-2000. In line with our decision of even date, we reject this ground. 95. Ground No.3 of the assessee is thus dismissed. 96. In Ground No.4, the assessee is aggrieved by the disallowance of Rs.6,51,649 as prior period expenses. 97. In view of the reasons set out and discussions earlier in this order, while dealing with identical grievance for the preceding assessment years, we uphold the grievance of the assessee and direct the Assessing Officer to delete the impugned disallowance. 98. In Ground No.5, the assessee is aggrieved by the CIT(A)'s treating an amount of Rs.1,39,91,621 being maintenance charges recovered from the licenses as "income from house property". 99. The relevant material facts are like this. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has le....
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....even before us, made these legal submissions which the CIT(A) had no occasion to deal with by way of a speaking order. In this view of the matter, we deem it fit and proper to remit the matter to the file of the CIT(A) with a specific direction to deal with all the contentions of the assessee by way of a speaking order and in accordance with the law. We direct so. 101. Ground No. 5 is thus allowed for statistical purposes in the terms indicated above. 102. The only grievance of the Assessing Officer is against the direction of the CIT(A) to grant depreciation as claimed by the assessee on VSAT equipment installed at the premises of the member broker as against proportionate disallowances made by the AO by invoking the provisions of section 38(2) of the I.T.Act. 103. Learned representatives fairly agree that this issue is covered, in favour of the assessee, by orders of the coordinate benches in assessee's own cases for the assessment years 1997-98, 2001-02 and 2003-04. Respectfully following these decisions, we uphold the order of the CIT(A) on this issue and decline to interfere in the matter. 104. The appeal of the assessee is thus partly a....