TaxTMI 
TaxTMI 
2013 (11) TMI 1241
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....evity. Assessment Year 2000-01 ITA No. 5421/Mum/2005: Assessee's appeal: The following grounds have been taken: "(1) That, on the facts and in the circumstances of the case and in law, the learned Assistant Commissioner of Income Tax (herein after referred to as ACIT) has erred in making disallowance of Rs. 5,85,508/-being rural development expenditure incurred by the appellant and learned Commissioner of Income Tax (Appeals) (herein after referred to as CIT (A)) has erred in confirming the order of the learned ACIT. The learned ACIT be directed to allow the claim of Rs. 5,85,508/-and to reduce the total income accordingly. (2) That, on the facts and in the circumstances of the case and in law, the learned ACIT has erred in disallowing Rs. 12,950/- being depreciation claimed by the appellant on roll over charges and learned CIT (A) has erred in confirming the order of the learned ACIT. The learned ACIT be directed to allow the Depreciation of Rs. 12,950/- on roll over charges and to reduce the total income accordingly. (3) That, on the facts and in the circumstances of the case and in law, the learned ACIT has erred in disallowing Rs. 2,54,37,500/-being depreciation c....
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....t the said expenditure is not revenue expenditure ,the appellant claims that the said expenditure be capitalized to the actual cost of fixed assets and depreciation be allowed on the same and to reduce the total income accordingly". 3. Ground no. 1 pertains to disallowance of Rs. 5,85,508/-, being expenditure incurred on rural development. 4. At the time of hearing, the Senior Counsel submitted that the issue has been in continuance since assessment year 1992-93. When the issue reached the ITAT, it was restored to the AO and in all the subsequent years, the issue has been held by the ITAT in favour of the assessee. The Senior Counsel submitted that last in the series of orders has been in ITAs No. 6668 & 6669/Mum/2003, wherein the coordinate Bench in the assessee's own case directed the AO to allow the expense, if the AO had allowed the same in assessment year 1992-93, to give effect to the order of the coordinate Bench on the issue, travelling to subsequent years upto 1995-96, facts being identical, as in the preceding years. 5. The Senior Counsel, submitted that the facts are identical, hence the same to be allowed, which has been held in ITAs No. 6668 & 6669/Mum/2003. 6.....
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....as nothing to do with the capital restructuring of the capital base of the company. He placed reliance on the decision of Bombay High Court in Burmah Trading Corpn. Ltd. vs CIT reported in 145 ITR 793 and on the decision of Hon'ble Bombay High Court in the case of CIT vs Hindalco Industries Ltd., wherein the Hon'ble Bombay High Court held, "It must be clarified that the expenditure does not include the price paid to the shareholders for buying back the shares. It merely relates to the expenditure incurred in connection with the carrying out of the buy back scheme. ... The buy back however, would not in any manner enhance the capital structure of the respondent. If anything there is an outflow of capital. As we noted earlier, the respondent has not claimed a deduction qua the outflow. It has claimed a deduction in respect of the expenditure incurred in connection with the process. There is no increase in the capital base of the respondent and the expenses incurred were in connection with the existing business of the company. That certainly is for the over all business of the company and liable to be allowed as revenue deduction. The issue raised in question (D) does no....
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....t order as part of profits of the business; and ii. To treat the same as capital receipt not chargeable to tax". The AR pointed out that in earlier years as well, the issue was taken up as additional ground and the issue had been restored to the file of the AO. He, therefore, prayed, like wise, the additional ground be admitted. 29. DR strongly objected to the allowability of additional ground. 30. On hearing and on going through the orders of the preceding years, the coordinate Bench has allowed the admission of additional ground and we find that the same has been restored to the file of the AO. 31. For the sake of continuance and in the interest of justice, we also admit the additional ground and direct the AO to adjudicate on the issue as per law and relying on the decisions of the DCIT vs Reliance Industries Ltd. reported in 82 TTJ 765 (Mum-SB), as done by the coordinate bench in ITAs No. 6668 & 6669/Mum/2003, needless to mention that adequate and reasonable opportunity shall be given to the assessee to present its case. 32. Ground is allowed for statistical purposes. In the result, ITA No. 5421/Mum/2005 is partly allowed. ITA no. 5561/Mum/2005, Department appeal: The....
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....mpany were studying. The AO disallowed the expenditure under section 40A(9). The said section provides that no deduction could be allowed in respect of any sum paid by the assessee as an employer towards setting up or formation of or as contribution to any fund/ trust, company, association of persons, body of individuals, society registered under the Societies Registration Act or other institution for any purpose except wheresum is so paid for the purposes and to the extent provided for under clause (iv) or clause (v) of sub section (1) of section 36 or as required by or under any other law for the time being in force. The assessee argued that provisions of section 40A(9) were not applicable and the expenditure was allowable as revenue expenditure under section 37(1). CIT(A) however following the decision in assessment year 1994-95 confirmed the disallowance. Aggrieved by the said decision the assessee is in appeal. 2.9.1 We have heard both the parties in the matter. We find that the same issue had been considered by the tribunal in assessee's own case in assessment year 1994-95 in ITA No.2326/M/2001. In that year also disallowance had been made under section 40A(9) in respec....
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....in which the expenditure in the form of premium redemption of debentures should be allowed. We order accordingly. Gr. No.4 raised by the Assessee is allowed". 47. We find that the issue is squarely covered by the decision in the case of Grind Well (supra), we, therefore, respectfully following the decision of the coordinate Bench, sustain the order of the CIT(A) and reject the decision of the AO on the issue. 48. Ground no. 4 is rejected. 49. Ground no. 5 pertains to allowance of expenditure on acquisition of marketing and technical know-how of Rs. 18,67,22,219/- as revenue expenditure. 50. In the assessment proceedings, the AO bifurcated the expenditures as technical know-how expenses and marketing knowhow expenses at Rs. 14.05 crores and 5.61 crores respectively and allowed the same to be as deferred revenue expenses to be written off in 5 years. 51. The CIT(A) accepted the submissions of the assessee and allowed the same, placing reliance on the decision of Kedarnath Jute Manufacturing Co. Ltd. vs CIT, reported in 82 ITR 363 (SC) and the decision of Coordinate Bench in the case of Amar Raja Batteries Ltd. vs ACIT, reported in 272 ITR 17 (AT), wherein it has been held, "........
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....ppellant on roll over charges and learned CIT (A) has erred in confirming the order of the learned ACIT. The learned ACIT be directed to allow the Depreciation of Rs. Rs. 9,731/- on roll over charges and to reduce the total income accordingly. (3) That, on the facts and in the circumstances of the case and in law, the learned ACIT has erred in disallowing Rs. 19,20,39,222/- being deduction claimed by the appellant under section 80HHC [read with Circular No. 680 dated 21.2.1994] from MAT income as per provisions of Sec 115JB calculated based on book profit and learned CIT (A) has erred in confirming the order of the learned ACIT. The learned ACIT be directed to allow the deduction of Rs. 19,20,39,222/- claimed by the appellant under section 80HHC [read with Circular No. 680 dated 21.2.1994] and to reduce the total income under section 115JB accordingly. (4) That, on the facts and in the circumstances of the case and in law, the learned ACIT has erred in charging interest of Rs. 7,28,052/- under section 234D of the Act and learned CIT (A) has erred in not deciding this issue in his appellate order. The learned ACIT be directed not to charge interest under section 234D of the Act ....
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....pertains to disallowance of Rs. 19,20,39,222/- being deduction claimed under section 80HHC on MAT provisions. 67. At the time of hearing, the Senior Counsel submitted that the issue is squarely covered by various decision, as referred to in the synopsis filed. The Senior Counsel further submitted that in the latest decision in the case of CIT vs Bhari Information Tech. Sys. P. Ltd., reported in 340 ITR 593, Hon'ble Supreme Court held, "In the present case, we are concerned with section 80HHE which is referred to in the Explanation to section 115JA, clause (ix). In our view, the judgment of the Special Bench of the Tribunal in Syncome Formulations squarely applies to the present case. The Hon'ble Supreme Court, after upholding the decision of the Special Bench in Syncome Formulations, held, We see no reason to interfere with the judgment. ...." The Senior Counsel, therefore prayed that disallowance be deleted. He further submitted that in all fairness that the issue needs to be restored to the file of the AO, as there is no formal calculations done by the AO, on the issue involved. On the other hand, the DR pleaded that the revenue authorities were correct in making the dis....
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....ws: "1. On the facts and in the circumstances of the case and in law, the learned AO ought to have allowed 100% of the export profit as deduction under section 80HHC from book profits (ignoring the subsection (1B) of section 80HHC), calculated on the basis of adjusted books profits under section 115JB". 79. Additional Ground no. 1: The issue is identical as that in assessment year 2000-01, wherein we have restored the issue back to the file of the AO, as has been done in the preceding years by the coordinate Benches in the case of the assessee. For the sake of consistency, we restore the issue to the file of the AO, who shall adjudicate the issue afresh in light of the decisions of DCIT vs Reliance Industries Ltd. reported in 82 TTJ 765 (Mum SB), needless to mention that adequate and reasonable opportunity shall be given to the assessee to present its case. 80. Additional ground no. 2 pertains to computation of deduction under section 80HHC, ignoring subsection (1B) for the purposes of MAT provision. 81. The ground does not emanate from the impugned order, we therefore, refrain from admitting the same at this stage. 82. Additional ground no. 2 is therefore rejected. 83. In t....