2015 (10) TMI 172

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....Appeal by the Assessee )(A.Y.2001-02) :- 2.1 The assessee is aggrieved on many counts and has raised several grounds. 2.1.1 The first ground raised by the assessee is regarding disallowance of Railways/Insurance claims written off by the assessee in the P&L Account amounting to Rs. 52,85,197/-, in respect of cement transportation . The AO observed that full and final settlement of the bill by the Railway and Insurance was done in the earlier years when the claim could have been made as deduction. However, in the year under consideration the difference between claim made by the assessee and final settlement made by the Railway/insurance companies was charged to P&L Account . Accordingly it was held by the ld. AO that the claim was not admi....

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.... bad debt can be allowed only when the amount has been taken into account in computation of income in the earlier year. It has not been made clear as to how the amount claimed as deduction has been taken into account in the computation of income of earlier year. On account of shortages found in transportation of goods assessee must have made claim with the insurance agencies and railways. It is not clear whether the claim lodged by the assessee with railways/insurance had been declared as income in the year of the claim, because only in that case the assessee can make claim of bad debt in the subsequent year when the full claim is not received. Facts being not clear, the issue in our opinion requires fresh examination. We, therefore, set as....

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.... for the purpose of earning of any income, which is exempt under the Act and hence, provision of section 14A will not be applicable in the case of the assessee. However, this claim was not found acceptable by the AO. According to the AO the said section came with retrospective effect from 1.4.1962 by the Finance Act, 2001, and clearly lays down that for the purpose of computation of total income no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which has not formed part of total income. Consequent to the insertion of above provision, expenses incurred towards exempt income are liable for disallowance under the above section and where expenses are not ascertainable, the same have to be det....

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.... the assessee with respect to HPSEB, being Electricity sub-station, transformer and transmission lines etc. near Gagal, not owned by it. We note that during the relevant year the assessee contributed Rs. 39,90,000/- to HPSEB for the aforesaid purposes for the cement plant of the assessee to ensure adequate and regular power supply. We find no infirmity in the conclusion drawn in the impugned as identically for Assessment Year 2000-01 to 1993-94 was decided in favour of the assessee . Our view finds support from the decision in CIT vs. Associated Cement Companies Ltd. (172 ITR 257)(SC) and also National Organic Chemical Industries Ltd. (203 ITR 410)(Bom.). Thus, this ground is decided in favour of the assessee . 7. The next ground pertains ....