TaxTMI 
TaxTMI 
2012 (8) TMI 37
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....37(1) of the Act. On the facts and in the circumstances of the case and in law, Ld. CIT(A) ought to have upheld, the order passed by the Assessing Officer. It is, therefore prayed that the order of the CIT(A) be set aside and that of the Assessing Officer be restored." 3. The grounds raised in the memo of appeal are as under: "On the facts and in the circumstances of the case and in Jaw, the learned CIT(A) has erred in (i) directing to reduce Sales tax of Rs.2.31 Crores and Excise Duty of Rs.5.63 Crores from the total figure of turnover for the purpose of computation of relief u/s 80 HHC of the Income tax Act, 1981. I (ii) directing to reduce export shortage of Rs. 23,58,007/- from turnover In clear contravention of the explanation (b) to sec 80HHC (4) (4B) of the Act. (iii) directing to Village Development expenses from the income through expenditure is clearly non-business expenditure. (iv) directing to allow deduction of Rs. 5,84,391/- paid by the to the REGMA though it has an element of enduring nature and being capital in nature. (v) directing to allow 100% depreciation on unsubstantiated claim of control equipment. (vi) deleting an amount of Rs. ....
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.... to 80.10 crores. This proves that the claim of shortage of Rs.87.51 lakhs is further paid as compensation which makes the cost of exports higher, but actually does not reduce the export turnover. In fact, this is a normal business practice in all trades where shortage in handling is compensated by payment, but does not mean that the goods were not cleared or payment not received for the full amount of export turnover. Therefore, in the circumstances and facts of the case Rs.87.51 lakh should not be reduced from the total turnover. Thus, ground No.2 of the Revenue is dismissed." 8. From the above para of the tribunal order, it is seen that it is held by the tribunal that the shortage is not to be reduced from export turnover or from total turnover. We hold accordingly. This ground of the revenue is also rejected. 9. As per ground No.3, the dispute is regarding direction of Ld. CIT(A) to reduce village development expenses from the total income. This issue is also decided in favour of the assessee in the same tribunal order in assessee's own case for the assessment year 2000-01 and the relevant paras are 25-28 of the tribunal order. Since no difference in facts could be pointe....
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.... amount received for furnishing a negative covenant is normally regarded as being on capital account because the person receiving the amount is disabled from carrying on the activity from which income was derived by him. Hence if an amount is received for drying up a source of income the receipt is generally regarded as being on capital account. In the case of the appellant the facts clearly show that an entire business of production of CFC is to be completely stopped in a phased out manner. Even if the specific plant and machinery is not to be entirely changed, it still does not mean that there has been no injury inflicted on the source of income. As per the note given in para 15.31 earlier it is clear that the assessee had to make numerous adjustments to its business as a consequence of phasing out of CFC production. It is not of relevance that it managed to earn equivalent income by production of another item from the same machinery. The fact remains that the compensation was paid for completely stopping the production of CFC which the appellant proceeded to do. This was one of its two major items of production and therefore, stoppage of one entirely would certainly constitute d....
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....therefore, in the present year, which is prior to the insertion of this sub-section in Section 28, it cannot be said that this receipt is taxable in the hands of the assessee. Ld. A.R. placed reliance on the Tribunal decision rendered in the case of Bharat Steel Vs DCIT as reported in 120 Taxman 210 (Del.). He also submitted the relevant portion of this judgement. This decision cited by the Ld. A.R. is also in support of the assessee and the same is on this very issue. By respectfully following the tribunal decision, we do not find any reason to interfere in the order of Ld. CIT(A) on this issue also. This ground is also rejected. 15. Now, we decide the additional ground raised by the revenue. Ld. D.R. supported the assessment order whereas the Ld. A.R. supported the order of Ld. CIT(A). 16. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that initially, the disallowance was made by the A.O. of Rs.46.10 lacs out of payment of professional fees. The same included the amount of Rs.1.10 lacs as payment of professional fee to Shri Arun Mohan and this disallowance was upheld by Ld. CIT(A). The ....