2014 (11) TMI 600

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....,216/being forfeiture of staff security deposit is not an exempted income but taxable receipt ?" (ii) "Whether, on the facts and in the circumstances of the case, the Tribunal is right in upholding the disallowance of Rs. 4,36,447/being Technical know how fees by disregarding the ratios of various binding decisions of jurisdictional High Court as well as Apex Court?" TAX APPEAL NO. 314 OF 2001. (i) "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in upholding the disallowance of liability of Rs. 1,05,39,490/arising during the assessment year under consideration on interpretation of Industrial Tribunal Award ?" (ii) "Whether, on the facts and in the circumstances of the case, the Tribunal ....

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....el for both the sides. Insofar as question no.1 framed in T.A. No.305/2001 is concerned, learned counsel for the appellant has taken us through the observations made in para45 of the order of the Appellate Tribunal, which reads as under;              "45. We find that the contention of the revenue for treating forfeited amount as taxable income is fully supported by the two decisions of Punjab and Haryana High Court in the case of Atlas Cycle Industry Ltd., which have been reported in 128 ITR 60 and 133 ITR 231. In our opinion, the amount of Rs. 91,216/is intimately connected with the business activities of the assessee company and therefore, has rightly been treated by the A.O ....

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.... the expenses incurred by the assesse are in the capital field and are inextricably connected with the capital structure of the company, it would be capital in nature. In the instant case, the assessee has acquired technical knowhow, technical and scientific information and knowledge for the manufacture of dryers, which is clearly an addition of enduring nature connected with the strengthening of the infrastructure of business. The expenditure is, therefore, capital in nature. Therefore, the question no.2 is answered in favour of the assessee. 7. Insofar as question no.1 of T.A. No.314/2001 is concerned, the accounting year of the assessee relevant for A.Y. 1981-82 ended on 30.06.1980 and therefore, the entire liability was allowed in....