TaxTMI 
TaxTMI 
2013 (11) TMI 1268
X X X X Extracts X X X X
X X X X Extracts X X X X
....AR of the assessee that the issues involved in these three grounds are covered against the assessee by the Tribunal order in assessee's own case for A.Y.2003- 2004 in ITA No.33/Ahd/2007, copy of which is available in the paper book. Accordingly, these three grounds of the appeal of the assessee being ground nos.1, 2 and 5 are rejected. 3. The ground no.3 of the assessee's appeal reads as under: "3. In the facts and circumstances of the case in law, the ld.CIT(A) erred in confirming various disallowances and observations relating thereto as under: 4. Regarding this ground, it was submitted by the learned AR of the assessee that the CIT(A) has followed his order for A.Y.1999-2000, and in that order, the issue was restored back to the file of the AO as per the Tribunal direction in ITA No.3039/Ahd/2002, and copy of this Tribunal order is available at page nos.36 to 38 of the paper book, and the relevant paras are para-6 & 7. It was also submitted that in present year also, the issue may be restored back to the file of the AO for fresh decision by following the same direction of the Tribunal given in A.Y.1999-2000. The learned DR also agreed to this proposition, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the advances written off are business advances, then the same is allowable as business loss, but this aspect was not examined by the authorities below, and hence, we set aside the order of the CIT(A) on this issue, and restore the matter back to the file of the AO for fresh decision. The AO should examine the nature of these advances, and if it is found that the same are business advances, then it should be allowed as business loss. While deciding the issue afresh, the AO should keep in mind the judgment cited by the learned AR of the assessee before us, as noted above, and adequate opportunity be allowed to the assessee. This ground is allowed for statistical purpose. 9. The ground no.6 is as under: "6. In the facts and circumstances of the case in law, the ld.CIT(A) erred in (i) In confirming the reduction of the amounts of Rs.26,73,037/- paid to customers for shortage claims from export turnover for computing deduction u/s.80HHC of the Income Tax Act, 1961; (ii) In confirming the reduction of 90% of other income of Rs.33,998/- computing profits of the business while computing deduction u/s.80HHC. 10. It was submitted b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rotocol for reducing production of Chlorofluorocarbons (CFC) gases treating the same as capital receipt instead of revenue receipt without appreciating that the assessee continues to manufacture other product, hydropchloro Fluro Carbon (FCFC) with the same set of machinery and has been claiming depreciation on the same establishment and there was no loss or damage to the assets/plant. The ld.CIT(A) erred in not holding that the receipt is a trading receipt being the compensation for the loss of business earnings. 1(b) The ld.CIT(A) erred in not appreciating that the compensation received by the assessee was not for the injury inflicted to its assets, but or the loss of business earnings, and hence, a revenue receipt." 15. The learned DR of the Revenue supported the assessment order, whereas it is submitted by the learned AR of the assessee that this issue is covered in favour of the assessee by the Tribunal order in assessee's own case for A.Y.2001-2002 in ITA No.2460/Ahd/2004 dated 6-7-2012. He submitted that the copy of the Tribunal decision is available at page no.46 to 53 of the compilation of the decision, and in particular, our attention was drawn to page n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e association and the business of the assessee, and that the onus case on the assessee in this regard as settled in the case laws mentioned at 1(b) was not discharged." 21. The learned DR supported the assessment order, whereas the learned AR of the assessee supported the order of the CIT(A). He also submitted that this issue is covered in favour of the assessee by same order of the Tribunal for A.Y.2003-2004 (supra) and relevant portions of the order are contained in para 1 to 10, which are available at page no.7 to 10 of the Tribunal. 22. We have considered rival submissions.. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee's own case for A.Y.2003-2004, and since no difference in facts could be pointed out by the learned DR of the Revenue on this issue also, we find no reason to take a contrary view, and hence respectfully following the decision of the Tribunal cited supra, this ground of the Revenue is rejected. 23. The ground no.3 of the Revenue is as under: "3. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in directing the AO to exclude sales tax and excise duty from the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to restore this issue back to the file of the AO for fresh decision after examining the nature of insurance claim. Accordingly, we restore this issue back to the file of the AO for fresh decision. The AO should examine nature of the insurance claim and then decide the issue afresh after providing adequate opportunity of hearing to the assessee. He should also keep in mind the judgment of Hon'ble Bombay High Court and Hon'ble Karnataka High Court cited before us, as noted above. This ground of the Revenue is allowed for statistical purposes. 29. In the result, Revenue appeal stands partly allowed for statistical purpose. 30. Now we take up the appeal of the assessee for A.Y.2004-2005 in ITA No.4515/Ahd/2007. 31. The ground no.1 of the assessee's appeal is as under: "1. In the facts and circumstances of the case and in law, the ld.CIT(A) erred in confirming reduction of deduction u/s.80HHC by following adjustments: i) reducing 90% of Rs.3.67 lacs being other miscellaneous income from business profits; ii) indirect expenses on trading turnover of Rs.35,08,788/- iii) Amount paid to customers for shortage claims of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....should not be considered in the present year, as the income as well as for deduction under Section 80HHC, and the same should be considered in the respective years as income as well as for the deduction under Section 80HHC. We order accordingly, and direct the AO to re-do the computation of income as well as deduction under Section 80HHC of the present year as well as of those earlier years, which are affected. Regarding second aspect, we find that the learned AR of the assessee could not produce any details or basis for allocation of entire expenses as per page no.36 to 38 of the paper book, and hence we find no reason to interfere with order of the learned CIT(A) on this issue. This aspect is decided against the assessee. Regarding third aspect of the ground, we find that this issue was decided in favour of the assessee in A.Y.2002-2003 by following the Tribunal order in A.Y.2003-2004 in assessee's own case, and hence, in the present year also, this aspect of the matter is decided in favour of the assessee. The ground no.1 is accordingly partly allowed. 34. The ground no.2 of the assessee's appeal is as under: 2. In the facts and circumstances of the case....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the assessee's appeal are as under: 4. In the facts and circumstances of the case and in law, the ld.CIT(A) erred in confirming disallowance of Rs.9,64,177/- being charges for extension of time for construction of building at Noida." 5. In the facts and circumstances of the case and in law, the ld.CIT(A) erred in confirming disallowance of Rs.84,19,185/- on account of expenses on professional fees." 40. It was fairly conceded by the learned counsel of the assessee that the issue raised in both these grounds are covered against the assessee by the Tribunal order in A.Y.2003-2004 in ITA No.33/Ahd/2007. Accordingly, both these grounds of the assessee are rejected. 41. Ground no.6 of the assessee's appeal is as under: 4. In the facts and circumstances of the case and in law, the ld.CIT(A) erred in confirming disallowance of Rs.5,50,000/- being charges for pre-feasibility study for construction of building at Noida." 42. On this issue also, it was fairly conceded by the learned counsel of the assessee that this issue should be decided against the assessee because this amount is also required to be capitalized along with the am....
X X X X Extracts X X X X
X X X X Extracts X X X X
....estore the matter back to the file of the AO for fresh decision after examining the nature of insurance claim, as per the similar direction, as we have given in A.Y.2002-03 while deciding the ground no.4 of the Revenue's appeal in that year. For the second aspect of the matter, i.e. regarding reduction of exchange fluctuation gain of Rs.84.95 lakhs, we find that the same is in respect of term loan, and therefore it is not a business profit, and hence not eligible for deduction under Section 80HHC. The reliance placed on the judgment of the Hon'ble Gujarat High Court by the learned counsel of the assessee is misplaced, because it is not applicable in the facts of the present case. This ground is allowed as above. 48. The ground no.2 is as under: "2. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in negating the reduction of Rs.11,64,1267/- from the export turnover as well as total turnover in the computation of deduction u/s.80HHC, without appreciating that by honouring the debit notes issued by the customers or raising credit notes in their favour for the short or defective supply, the assessee had admitted reduction in the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....settled in the case laws mentioned above was not discharged." 55. The learned DR supported the assessment order, whereas the learned counsel for the assessee supported the order of the CIT(A), and he also submitted that this issue is also covered in favour of the assessee by the same decision of the Tribunal in assessee's own case for A.Y.2003-2004. Accordingly, this ground of the Revenue is also rejected by following the Tribunal order in A.Y.2003-2004. 56. The ground no.5 is as under: "5. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in deducting to the extent of Rs.59,92,369/- out the disallowance of Rs.69,05,3689/- towards interest expenses u/s.14A, which was incurred in relation to exempted income of dividend and tax free interest, without taking note of the landmark decision in the case of CIT(A) Vs. Abhishek Industries Ltd., 286 ITR 01 (P&H laying down that, in view of section 106 of the Indian Evidence Act, the facts being in the special knowledge of the assessee, it was upto him to adduce evidence that all the borrowings were sued for the purposes of business and it is assessee's own surplus funds that were invested....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the case and in law, the ld.CIT(A) erred in allowing deduction u/s.36(1)(vii) for sundry balances of Rs.1,12,300/- written off, without appreciating that the relevant advances had not been taken into account in computing the income of this year or any earlier previous year nor is the assessee in the business of banking or money lending as per mandate of section 36(2) of the Act." 62. The learned DR supported the order of the AO, whereas the learned counsel for the assessee supported the order of the CIT(A). He also submitted that this issue is covered in favour of the assessee by the decision of the Tribunal in assessee's own case for A.Y.2001-2002 in CO No.266/Ahd/2004 dated 31.1.2001 and drawn our attention to para 4 to 7 at page no.29 to 31 of the compilation of the decisions. 63. We have considered rival submissions and gone through the orders of the Tribunal cited by the learned counsel for the assessee supra. We find that in that year, the issue was decided by the Tribunal on the basis that the balance written off, were taken into account while computing the profit of the assessee. In the present case, there is no findings of the authorities below on this aspect of the ....