TaxTMI 
TaxTMI 
2013 (11) TMI 897
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....e appeal raises as many as four grounds, raising in effect two issues, which we shall take up in seriatim. Vide its first ground, the assessee disputes the disallowance of penalty levied on it by RBI at Rs.5 lakhs and, two, the fees and other charges paid to the Registrar of Companies (ROC) toward increase in its authorized capital, at Rs.6,30,180. 2.2 The assessee's plea with regard to the first sum, which did not find favour with the authorities below, was that the penalty stood levied on it even as no default had been committed by it, but by its bank, ING Vysya Bank Ltd., Mumbai, i.e., for a minor lapse by way of a delay for a few days in informing the RBI in respect of a foreign loan transaction carried out through it. Explaining the....
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....tal, which only would be capital expenditure, and could be amortised, claiming deduction u/s.35D of the Act. The assessee is already in business and, therefore, the expenditure for raising capital is only in the course of its regular business and, thus, revenue in nature, deductible u/s. 37(1). 2.3 The ld. AR would also raise an alternate contention, i.e., that even if these two sums were to be considered as a part of the assessee's income, the same would also be eligible for deduction u/s.10AA inasmuch as the same stand expensed from the profits of a 100% export oriented unit located at SEEPZ-SEZ, eligible for deduction u/s.10AA, and on which aspect there is no dispute. Reliance for the purpose was placed by him on the decision in the c....
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....uld not alter the nature of the levy, i.e., being in respect of a contravention of a provision of law. The argument by the ld. AR that the penalty stands levied for the default of its banker is again of no moment. This is as if it is so, how could the penalty be levied on, or paid for by, the assessee? In fact, if so, the amount would not be deductible u/s. 37(1) in the first place. On the other hand, if the same is levied on the assessee, as its banker was acting for and on its behalf, the same would be to no effect or consequence as a principal is bound by the actions of his agent. Further, that the penalty is not compensatory in nature is self-evident, besides being conceded to by the ld. AR during hearing itself. In this view of the mat....
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....ion u/s. 35D itself proves it to be of capital nature, else would stand to be deductible u/s. 37(1). In fact, we find the A.O. to have allowed deduction u/s.35D at the prescribed ratio of 10% of such expenditure (Rs.7,00,200/-), disallowing the claim for the balance Rs. 6.30 lakhs. 3.3 So, however, we find the assessee's alternate plea, raised per its ground # 3, to be perfectly justified. The assessee is engaged in the business of manufacture and export of Diamond Studded Gold & Platinum jewellery through its only 100% EOU, profits of which are exigible for deduction u/s.10AA of the Act. Though the A.O. states of it as being u/s.10A, we do not think of it to be material in relation to the argument being led by the assessee. This is as i....
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....2001] 248 ITR 110 (SC); CIT vs. Sterling Foods [1999] 237 ITR 579 (SC) and Tuticorin Alkali Chemicals and Fertilizers Ltd vs. CIT [1997] 227 ITR 172 (SC). Aggrieved, the assessee is in second appeal. 5. We have heard the parties, and perused the material on record. 5.1 At the very outset, it was observed by the Bench that the assessee has no case on merits; the position in law being well-settled, so that it would not matter even if the bank deposits, as being claimed by the assessee before us, though without any evidence, were required to be kept with the bank in respect of a loan of Rs.52 crores granted to the assessee by it. As explained by the Tribunal in the case of Tessitura Monti India (P.) Ltd. (in ITA No.7127/Mum/2010 dated 11....
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....ies below as an income derived from an eligible unit. In our opinion, this may not be very material. This is for the reason that there is no definite finding in the matter on record as to the source of the capital invested in bank deposits, i.e., borrowed or otherwise. We do note that this argument in fact contradicts the assessee's claim of the relevant bank deposits being required to be placed with it by its bank as a condition, or a part of the arrangement, for the grant of credit facilities thereto. However, we have already clarified that the assessee's claim in this respect is not based on any material on record. Further, as also observed by the Bench during hearing, the onus to prove its claim/s would be in any case only on the assess....