TaxTMI 
TaxTMI 
2013 (1) TMI 288
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....ENTURY YARN (a) Rs.4,79,829/- Store Bardana Sale (b) Rs.24,693/- Bonus received against purchase of imported spares of Autocorners M/c. (c) Rs.6,908/- Receipt on account of sale of Vegetables, fruits, grass etc. Rs.5,11,430/- (II) CENTURY DENIM: (a) Rs.8,01,900 /- Stores Miscellaneous Sale (b) Rs.6,94,339/- Received on A/c of Cotton Waste expenses (c) Rs1,50,972/- Bonus on spare purchase from W.Schlafhorst A.G. & Co., Germany From 1.11.99 to 30.10.00. (d) Rs.9,55,562/- Amount of settlement of cancellation of sale contract of M/s Sudacot Trading S.A. for supply of 200 MT Greek Cotton, Contract No.1010/GR Rs.26,02,773/- 3. Both the parties were heard at length on this issue. After carefully considering the rival submissions and also perusing the orders of the authorities below, our findings are as under :- (i) Regarding Stores Bardana Sale of Rs.4,79,829/- in Century Yarn, learned counsel has submitted that this ground is not pressed as it has wrongly been raised, because the CIT(A) has allowed deduction under Section 10B of t....
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....e. (v) Regarding receipts on account of cotton waste expenses for sum of Rs.6,94,339/-, learned CIT(A) has noted that this unit has been collecting Re.1 per kg. of cotton waste sold to customer in a particular packing. The cost of packing material required for such packing is debited to cotton waste expenses and the amount received from the customer is being credited to this account and the net excess is shown in the profit and loss account. He further observed that the aforesaid net income is not in connection with the production of article or thing, the above cotton waste expenses which is the net income has rightly been excluded by the Assessing Officer. The Assessee is engaged in manufacturing of Denim cloth in the said EOU, which results in cotton waste also. As noted by the CIT(A), the cost of packing material for such packing of cotton waste is debited to the waste expenses and the amount received from the customers is credited to this account and net excess is shown in the profit and loss account. This sale is directly related to the activities carried out by the assessee and, is, therefore, derived from the undertaking of EOU. Th....
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.... 19. This issue has been decided against the assessee in the assessee's own case in I.T.A. Nos. 3925 & 4170/Mum/2005 in assessment year 2000-01, in para 23, which is as under: "23. After hearing both the parties, we find that similar disallowance as made even in earlier year and the matter travelled to Tribunal. After considering the submissions, the Tribunal decided the issue against the assessee, which is also an admitted position in the chart. Therefore, following the earlier year order, we decide this issue against the assessee." We do not intend to disturb the findings of the co-ordinate Bench taken on this issue, we therefore, decide the issue against the assessee. Ground no. 3 is dismissed." 4.3 Thus, following the earlier order precedence, ground No.2 raised by the assessee is decided against the assessee and the same is dismissed. 5. In ground No.3 the assessee has challenged the finding of the learned CIT(A) in confirming the action of the Assessing Officer in disallowing the project expenses of Rs.19,546/-. 5.1 Learned counsel submitted that this issue has been decided in fa....
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....; 29. We have considered the rival submissions carefully and find that the Tribunal decided this issue in ITA No.9329/Mum/2004 vide para 19. Further, the Hon'ble Bombay High Court ITA No.4218 of 2009, where the question was asunder: "(a) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified In law in treating the project expenses amounting to Rs.15,31,365/- as revenue expenditure even though the same were connected to the new projects under completion and therefore capital in nature? decided the issue vide para 2, which is as under: "2, As regards the first two questions are concerned, the finding .of fact recorded by the Tribunal is that the said expenditure was incurred by the assessee related to the same line of business carried on by the assessee and therefore allowable as revenue expenditure. The expenditure incurred related to salary, conveyance, legal and professional charges, printing and stationery, which are revenue in nature. In this view of the matter, no fault can be found with the decision of the Tribunal in allowing the expenses as reven....
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..../- being amount pertaining to written off on leasehold land in various division. 7.1 Learned counsel submitted that this issue has been restored to the file of the Assessing Officer in assessee's own case in the assessment year 2001-02 in ITA No.3926/2005. 7.2 Learned DR duly admitted this fact. 7.3 After going through the order of the Tribunal, we find that this issue has been set aside to the file of the Assessing Officer following the earlier years' order after observing and holding as under :- "24. The issue had been set aside to the file of the AO in the preceding year in I.T.A. Nos. 3925 & 4170/Mum/2005 in assessment year 2000-01, for re-examination of the issue in the light of the Special Bench decision of the Tribunal in the case of Mukund Ltd. reported in 106 ITD 231 (Mum SB) for finding the nature of the premium part. Respectfully following the order, we set aside the order of CIT(A) and restore the issue to the file of the AO for passing fresh order on the impugned issue after allowing proper opportunity to the assessee. Ground no. 6 is allowed for statistical purposes." 7.4 Accordingly, in this year also, this issue is set aside to the ....
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....assessee's own case in the earlier assessment year. After going through the order passed by the Tribunal in assessment year 2001-02, we find that the Tribunal has recorded a finding that this issue stands covered in assessee's own case right from the assessment years 1990-91 to 2001-02. In view of this admitted position, this issue is decided against the assessee. Accordingly, ground No.9 stands dismissed. 12. In ground No.10, the assessee has challenged provision in respect of difference of electricity duty on colony consumption payable to MPEB/CSEB etc. Rs.81,06,514/-. 12.1 Learned counsel pointed out that this issue has been restored back to the Assessing Officer with a direction in the appeal for the assessment year 2001-02, wherein the Tribunal has directed the Assessing Officer to allow the expenditure on payment basis. The relevant observation and finding of the Tribunal in the assessment year 2001-02, reads as under :- "28. This issue has been decided in favour of the assessee by the Tribunal in preceding years wherein the AO was directed to allow the expenditure on payment basis consistently, whatever system of accounting is adopted by the asses....
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....2 Thus, in this year also this matter is restored back to the file of the Assessing Officer to work out some reasonable basis for disallowance in view of the decision laid down by the Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd (supra). Accordingly, this ground is treated as allowed for statistical purposes. 15. In ground No.13, the assessee has challenged the disallowance of deduction under Section 80HHC on the ground that the income as per normal computation is Nil and accordingly no deduction is allowed under Section 80HHC while computing book profit under Section 115JB. 15.1 After going through the finding of the CIT(A) as well as the Assessing Officer, we find that this issue now stands covered by the decision of ITAT Special Bench, Mumbai in the case of DCIT Vs. Syncome Formulations (I) Ltd., [2007] 292 ITR (AT) 144 (Mumbai) [SB], wherein it has been held that deduction under Section 80HHC in the case of MAT assessment, is to be worked out on the basis of adjusted book profit and not on the basis of profit computed under the regular provisions of law applicable to the computation of „profit and gains of business or profession'. This judgme....
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....ppreciating the fact that it was not an expenditure incurred wholly and exclusively for the business of the assessee. 4. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow depreciation on account of addition to Plant & Machinery being provision for Custom Duty on Airjet looms and Auto Coner without appreciating that the same are covered by the provisions of Sec.43B. 5. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in restricting the disallowance to Rs.10,70,617/- under sec.14A. At the same time he has, in principle, agreed with the disallowance, thus increasing the book profit by Rs.84,77,211/- without appreciating the fact that the assessee has a mix of borrowed and self-owned funds which it utilizes for both business and non-business activities and the assessee had failed in discharging the onus of proving the nexus between the investment and the self-owned funds by way of cash fund flow statement to the satisfaction of the Assessing Officer." 16.1 Both the parties were heard and admitted that all the issues raised in the ground....
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....sp; 71. After considering the rival submissions, we find that the Hon'ble Supreme Court in the cases of Prakash Cotton Mills Pvt. Ltd. (supra) and Standard Batteries Ltd. vs. CIT (supra) has observed that whatever is paid to the Govt. authorities, though known as penalty, but if the same is of compensatory nature, then the same, strictly speaking, is not penalty and has to be allowed as business expenditure. The Hon'ble Court has given the „ample of penalty paid for delayed payment of Salestax which was held to be compensatory nature. Since no details have been given for the amount paid, which has been disallowed by the AO, and even the Sr. counsel of the assessee has not placed any details before us, therefore, we set aside the order of id. CIT(A and remit the matter back to the file of AO for re-examination of the issue and if various penalties paid are found to be only compensatory in nature in view of the decisions of the Hon'ble Supreme Court (supra), then the same may be allowed." Respectfully following the decision taken by the coordinate Bench in the assesee's own case, we in the current year, set aside the order of the CIT(A) and restore the iss....