TaxTMI 
TaxTMI 
2014 (6) TMI 146
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....ible at source on such interest. (ii) There was no difference between the rate of interest payable on the tax free bonds before allotment and after allotment i.e. 10%. (iii) The interest on these bonds was declared by the Central Government as exempt u/s 10(15)(iv)(h) vide notification No.S03522 dated 11-9-87 and No.7769 dated 12-2-88. Under the scheme of issue of tax free bonds, nowhere it is stated that the interest income on the tax free bonds shall be exempt only for the period after the date of allotment. (iv) The fact that interest pertained to the period prior to the date of allotment of the tax free bonds is of no consequence and does not in any way change the nature of the bonds i.e. "tax free bonds". (iv) The tax free bonds applied for by the appellant company were fully allotted subsequently. 2. The Learned CIT (Appeals) erred in confirming the disallowance of Bhanwad Prospecting & Survey Expenses of Rs.1,6 1,176/-though the same was incurred in connection with procurement of raw material i.e. limestone. (i) The Learned CIT (Appeals) erred in disallowing the loss of Rs.41,06,327/- on account of repayment of foreign currency loans due to fluctuation in e....
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....disallowing the provision made in Books for interest on electricity duty of Rs. 11,55,549/- without appreciating that it is a real liability made according to the Bombay Electricity Supply Act which specifically provides for levy of interest on unpaid amount of electricity duty. 9. (i) The Learned CIT (Appeals) erred in confirming the disallowance of the following expenditure treating them as expenses of earlier years. a. Company's contribution to Provident Fund for the month of September' 1984- (A.Y. 1985-86) Rs.9,20,175/- and b. Company's contribution to Provident Fund relating to Assessment Year 1983- 84 - Rs.1,04,723/- (ii) The above amounts were paid in the relevant years but the same were debited to the Profit & Loss account in the year under reference and as such allowable. (iii) Without prejudice and in the alternative, it is respectfully submitted that the Learned CIT(Appeals) having disallowed the expenses of earlier year, further erred, in not giving direction to allow the expenditure in the respective assessment years to which they pertain. 10. The Learned CIT (Appeals) erred in partly confirming the disallowance of Delhi office expenses to the extent ....
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....rming part of the Assessment Order, treating them as not entitled for E.S.A. (ii) He failed to appreciate that the items mentioned in Annexure 'A' are transformers, electric poles, overhead wires, cables, weighing machine, and storage tank which form an integral part of the main plant which works in triple shift. 17. (i) The Learned CIT(Appeals) erred in confirming the disallowance of investment allowance on various items of plant and machinery listed in Annexure 'B' forming part of Assessment Order, which formed an integral part of plant and machinery. (ii) The Learned CIT(Appeals) further erred in confirming the disallowance of investment allowance on the exchange loss treated as capital expenditure. 18. (i) The Learned CIT (Appeals) erred in not accepting the Appellant's submission that royalty on limestone is neither tax nor duty but is part of cost of material and not disallowable u/s.43B. (ii) (a) The Learned CIT (Appeals) erred in not accepting the Appellant's submission that the Mineral Rights Tax is neither tax nor duty but is part of cost of limestone. (b) The Learned CIT (Appeals) erred in not accepting the Appellant's alternate plea that Mineral Rights....
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....issue taken vide ground No.2 is covered in favour of the assessee by the decision of the Tribunal in the own case of the assessee for assessment year 1986-87 vide ITA No.4564/M/2003. The Tribunal while dealing with the issue in question in para 14 of the said decision has observed that since the assessee had been allowed deduction under section 35(E) of the Income Tax Act (hereinafter referred to as the Act), hence the grievance of the assessee became otiose and the Tribunal therefore dismissed the ground of appeal relating to this issue. 8. In view of the above, this issue is decided accordingly and the ground No.2 of the appeal is therefore dismissed. Ground No.3 9. Ground No.3 as reproduced above is relating to the disallowance of foreign exchange fluctuation loss as revenue expenditure and further disallowance of investment allowance on increase in liability on account of foreign exchange fluctuation loss. The ld. A.R. of the assessee has submitted that the issue taken vide ground No.3 is covered in favour of the assessee by the decision of the Tribunal in the own case of the assessee for assessment year 1986-87 vide ITA No.4564/M/2003. The Tribunal, while dealing with....
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.... being identical, therefore respectfully following the decision of the Tribunal (supra), we direct the AO to allow the expenses on issue of debentures. This ground of the assessee is accordingly allowed." 12. So respectfully following the above decision of the Tribunal for the earlier assessment year, the facts being identical for this year also, this issue is accordingly allowed in favour of the assessee. Ground No.5 13. Ground No.5 as reproduced above is relating to the expenditure on foreign personnel. The ld. A.R. of the assessee has stated at bar that he does not press the ground No.5. The ground No.5 of the appeal of the assessee is thus dismissed being not pressed. Ground No.6 14. Ground No.6 as reproduced above is relating to the expenses incurred on annual general meeting of shareholders. The ld. A.R. of the assessee has submitted that the issue taken vide ground No.6 is covered in favour of the assessee by the decision of the Tribunal in the own case of the assessee for assessment years 1995-96 and 1996-97 vide ITA No.2658/M/2002 and 5728/M/06 respectively. The Tribunal while dealing with the identical issue for assessment year 1995-96 has directed the AO t....
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....is directed to decide the said issue in accordance with the decisions of the Tribunal on this issue in the earlier assessment years. Ground No.8 18. Ground No.8 as reproduced above relates to provision for interest on electricity duty. The ld. A.R. has submitted that the identical issue, for earlier assessment years i.e. assessment year 1984-85, 1985-86 and 1986-87 has been referred back to the AO. Facts for this year being identical this issue is accordingly referred back to the AO to decide in accordance with the directions of the Tribunal given for earlier assessment years. Ground No.9 19. Ground No.9 as reproduced above relates to earlier year's expenses. The Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT(A)] while adjudicating this issue observed that neither the above liability accrued during the previous year nor the payment was made during the previous year. He therefore upheld the disallowance. The ld. A.R. could not bring out any defect in the well reasoned order of the CIT(A) on this issue. This ground No.9 of the appeal of the assessee is accordingly dismissed. Ground No.10 20. Ground No.10 as reproduced above relates to Delhi off....
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.... ITA No.4564/M/2003. The Tribunal, while dealing with the issue, has allowed this ground following the decision of the Jurisdictional High Court in the case of 'Reliance Utilities' 313 ITR 340. The facts for this year being identical in nature, the AO is directed to decide this issue in the light of the earlier year's decisions in the own case of the assessee. Ground No.14 24. The ground No.14 as reproduced above relates to disallowance under section 40A(5)/40(c). The ld. A.R. of the assessee has stated at bar that he does not press the ground No.14. The ground No.14 of the appeal of the assessee is thus dismissed being not pressed. Ground No.15 25. The ground No.15 as reproduced above relates to disallowance of guest house expenses under section 37(4). The ld. A.R. has stated at bar that out of the said expenditure, he presses only for the allowance of food expenses of Rs.6,74,888/-. He has further stated that the issue has been referred back in the earlier assessment years to the AO by the Tribunal. In this respect, he has relied upon the decision of the Tribunal in the own case of the assessee for the earlier assessment year 1986-87 passed in ITA No.4564/M/2003. A pe....
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....f investment allowance on items of plant and machinery. The ld. A.R. has submitted that the issue is squarely covered in favour of the assessee for earlier assessment years. For reference he has relied upon the decision of the Tribunal for assessment year 1985-86 passed in ITA No.5181/M/2002. The Tribunal, while dealing with the issue, has observed as under: "120. As regards the disallowance of investment allowance on certain items treated in the nature of civil work and not integral part of the plant and machinery, we find merit in the plea of the ld. Sr. Counsel for the assessee that the Tribunal on the similar issue has upheld the order of the ld. CIT(A) who set aside the issue to the file of the A.O. vide finding recorded in para 7 of its order dtd. 27- 12-2007 (supra). Respectfully following the same, we set aside the said issue to the file of the A.O. to decide the same afresh in the light of the direction given by the Tribunal in assessee's own case (supra) and according to law after providing reasonable opportunity of being heard to the assessee. The ground taken by the assessee is, therefore, partly allowed for statistical purpose." 29. The facts for this year al....
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.... per the above decision. So far the disallowance relating to mineral rights tax is concerned, the ld. A.R. has fairly stated that the issue has already been decided by the Tribunal in the earlier assessment year i.e. assessment year 1986-87 against the assessee. The Tribunal, while deciding the said issue for assessment year 1986-87, has observed as under: "42. We have considered the rival submissions and perused the orders of the lower authorities. It is not in dispute that the company purchased limestone on which MRT was payable to the suppliers. It is also not in dispute that the assessee has discounted MRT in its purchase consideration payable to the suppliers of the lime stone which means that to the extent of MRT, the assessee has retained the money from the suppliers on the pretext that it will make the payment to the Government. Therefore, by not paying the said amount to the Government, the assessee has retained public fund with itself. As the assessee itself has agreed to pay the MRT on the limestone purchased by it and as it has not discharged the liability till the end of the accounting year, we do not find any reason to tamper with the findings of the Ld. CIT(A).....