TaxTMI 
TaxTMI 
2012 (9) TMI 186
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....t Rs. 59,68,19,288/-. The return was accompanied with Tax audit report, Profit and Loss Account, balance sheet and other documents. The return was revised on 30.3.1998. 4. During the year, company commissioned three new Industrial Undertakings i.e. Power Plant II at Rajashree Cement, Malkhed, Grinding unit at Hotgi Sholapur of Maharashtra and Clinkerisation Unit at Malkhed in Karnataka. The return was processed and selected for scrutiny assessment. During the course of assessment proceedings, the Assessing Officer sought explanation on various issues and after considering the submissions, the AO completed the assessment on 31.12.1998 after making additions on various heads. The matter was taken by the assessee before the Ld. CIT(A). 5. The Ld. CIT(A) after considering the submissions and the documents submitted by AO in support of its claim partly allowed the appeal. 6. The assessee is in appeal before us against the order of Ld. CIT(A). The Senior Counsel for the assessee filed a detailed chart showing grounds of appeal which have been dealt by the AO and the Ld. CIT(A) and by the ITAT Mumbai in its earlier year's orders in assessee's own case. 7. Ground No. 1 relat....
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....nses . The AO pointed out that the assessee has not considered the following expenditure relating to guest house for calculating the disallowance. A) Rent Rs. 14,24,947/- B) Repairs Rs. 3,72,743/- C) Depreciation Rs. 6,85,636/- ------------------ Rs. 24,83,326/- ========== 13. The assessee carried the matter before the Ld. CIT(A). The Ld. CIT(A) at page 4 para-6 of his order held that similar disallowance made by AO in earlier assessment years were confirmed by himself accordingly Ld. CIT(A) confirmed the additions following his earlier years orders. 14. We find that the issue is settled by the judgement of the Hon'ble Supreme Court in the case of Britania Industries Ltd., 278 ITR 546 (SC) which has been followed by the Tribunal in the earlier years appeals in assessee's own case. Respectfully following the decision of the Hon'ble Supreme Court and the Tribunal, finding of the Ld. CIT(A) are confirmed. This ground of the appeal is dismissed accordingly. 15. Ground No. 5 relates to restricting the disallowance of entertainment expenses incurred on employees to 25%. The assessee in the computation of income on its own has disallowed an amount o....
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....e assessee has claimed an expenditure of Rs. 5,07,261/- as deduction on account of Rural development expenditure which comprises of Rs. 2,69,068/- was incurred at Veraval and an amount of Rs. 2,38,193/- at Malkhed. When the AO sought explanation, assessee submitted that these expenses were incurred for welfare and upliftment of the rural areas surrounding the factory site where workers of the assessee reside and claimed that such rural expenses are allowable u/s. 37(1) of the I.T. Act. The AO disallowed the claim of the assessee holding that similar disallowances were made in the earlier year also. When the matter was taken up before the Ld. CIT(A), CIT(A) held that as in the preceding assessment year, he has confirmed similar disallowance accordingly following his own order, Ld. CIT(A) confirmed the disallowance. 22. Before us, the Senior Counsel submitted that the Tribunal in the earlier assessment year has allowed the claim of the assessee. 23. We have perused the orders of the Tribunal in assessee's own case for earlier assessment year. We find that in the earlier assessment year, the Tribunal had restored the matter to the file of AO. The AO in his order giving effect an....
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....has claimed that it has received interest u/s. 244A amounting to Rs. 1,40,02,326/- for assessment year 1995-96 as per intimation u/s. 143(1)(a) which it has offered for tax in that year. Subsequently, when the said assessment was completed u/s. 143(3) and as there was additional payment of Rs. 8.26 crores, the interest allowed vide intimation u/s. 143(1)(a) was withdrawn. The assessee contented that since it has offered the interest in assessment year 1995-96, which was subsequently withdrawn by the department in March, 1998, the said interest amount of Rs. 1,40,02,326/- should be allowed as deduction in the computation of income for the year under consideration. The contention of assessee was rejected by AO who held that as the interest was withdrawn in March, 1998, the contention of assessee may be considered only in the assessment year 1998-99 and not in the year under consideration. 33. When the matter was agitated before the Ld. CIT(A) at page-11 para 17.2 of his order, he rejected the claim of assessee holding that the principles laid down by the Hon'ble Supreme Court in the case of CIT Vs British Paints India Ltd. 188 ITR 44 squarely applied to the case of the asses....
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.... to schools at Veraval and Malkhed. 38. During the course of assessment proceedings, the AO noticed that the assessee has paid total amount of Rs. 21,59,851/- to Indian Rayon School at Veraval and Malkhed and claimed it as business expenditure. The assessee claimed that since children of some of the employees studying in the said school, the payment should be allowed as business expenditure. However, the contention of assessee was not accepted by AO as similar disallowances in earlier years were confirmed by Ld. CIT(A). 39. When the matter was argued before the Ld. CIT(A), the CIT(A) followed his earlier order and confirmed the disallowance. 40. We find that similar matter had travelled before the Tribunal in earlier assessment years starting from assessment years 1992-93 to 1995-96 and 1998-99 and 1999-2000. We also find that while deciding the appeal in ITA Nos. 6668 & 6669/Mum/2003 pertaining to assessments 1998-99 & 1999- 2000 the Tribunal while adjudicating on ground No. 4 on page-8 para-16 has held that on identical issue the Tribunal had allowed the claim in earlier years. Respectfully following the order of the Tribunal in assessee's own case, as facts being identi....
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.... tickets are concerned, the same is not in violation of section 40A(3) but payments made to buy furniture is in violation of Sec. 40A(3) of the Act, therefore, we direct the A.O. to restrict the disallowance to 20% of Rs. 24,000/-. Ground No. 14 is, therefore, partly allowed. 46. In ground No. 18 the Senior Counsel drew our attention to letter dt. 24th August, 2007 by which assessee company has requested to raise the following additional grounds: 1) On the facts and circumstances of the case and in law, the appellant prays that the AO be directed : a) Exclude from taxable profits, the sales tax exemption benefit of Rs. 2,42,58,647/- which is included in sales and which is taxed in the assessment order as part of profits of the business and b) To treat the same as capital receipt not chargeable to tax. 47. The Senior Counsel stated that the assessee had neither claimed any exemption in the return of income filed nor the lower authorities granted such exemption. It was further pointed out that the Special Bench of ITAT in the case of DCIT Vs Reliance Industries Ltd. 88 ITD 273 has held that subsidy granted by Government to set up Industry in a backward area would be in....
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....ground which arises on the basis of facts on record and which is relevant for determining the tax liability of the assessee correctly. We therefore, admit the additional ground raised by the assessee. Since adjudication of the ground will require going into the incentive scheme framed by the U.P. Government which was not available before the lower authorities, the issue is restored to the file of AO for passing a fresh order after necessary examination and after allowing opportunity of hearing to the assessee. 52. The facts and circumstances being identical, we also admit the additional ground raised by the assessee. Respectfully following the decision of the Tribunal mentioned herein above, the issue is restored to the file of AO for passing a fresh order after necessary examination and after allowing opportunity of hearing to the assessee. Therefore, the additional ground raised by the assessee is allowed for statistical purpose. 53. In the result, the appeal filed by the assessee is partly allowed. ITA No. 6836/Mum/2002 -A.Y. 1996-97-Revenue's Appeal 54. The issue raised in ground No.1 is identical with issue raised by ground No. 5 in ITA No. 6421/M/02 for assessment year ....
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....ates to deletion of disallowance of Rs. 11,88,730/- paid for laying transmission line and Rs. 1,08,06,154/- paid towards the construction of access road. 62. During the course of assessment proceedings, the AO found that the assessee has debited Rs. 11,88,730/- as payment made to MSEB for laying of transmission line at Hotgi plant at Solapur and claimed it as Revenue expenditure. The AO was of the opinion that since laying of transmission line is of an enduring nature the assessee will derive the benefits in long term for its business accordingly treated it as capital expenditure. The AO further noticed that the assessee has also debited Rs. 1,08,06,154/- towards construction of access road and laying of 132KV transmission line and claimed it as Revenue expenditure. When questioned by AO on the allowability of the claimed expenses, the assessee relied upon the judgement of Hon'ble Supreme Court in the cases of CIT Vs Associated Cement companies Ltd 172 ITR 257 and L.H. Sugar Factory and Oil Mills (P) Ltd Vs CIT 125 ITR 293 and claimed that the expenditure should be deductible as revenue expenditure. However, the AO relied upon the decision of Hon'ble Bombay High Court in the ....
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....namely Rajshree Cement, J.S.T (Flax), J.S.T (R.C.M.) and Rajshree Syntex, Birle Penclase, Rayon Caustic, while cement capitalized shown under capital work-inprogress. The interest paid to the tune of Rs. 6,65,28,237/- was claimed as deductible revenue expenditure. The AO after discussing various judicial pronouncements and submissions of the assessee came to the conclusion that new operations do not constitute same business as interest have been paid on funds borrowed for the operations of the new project is not an allowable deduction u/s. 3636(1)(iii) of the I.T. Act. 67. When the matter was argued before the Ld. CIT(A), the Ld. Counsel pointed out that similar matter was argued for the preceding assessment year 1995-96. The Ld. CIT(A) held that since he has allowed the issue on identical facts, the claim of interest paid on borrowed capital as deductible expenditure in the immediately preceding year, he allowed the expenses for the year under consider also. 68. The Ld. DR relied upon the finding of AO. The Ld. Senior Counsel pointed out that the facts and issue are identical with the facts and issue of earlier assessment years 1995-96, 1998-99 and 1999-2000. 69. We have ....