TaxTMI 
TaxTMI 
2015 (11) TMI 987
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....nt paid as stamp fees for the agreement pertaining to the Co- Gen project in respect of the agreement entered into for US grant/aid. 3. The CIT (A) erred in confirming of charging of Rs. 19,37,524 under Sec. 41 m respect of sundry credit balance written off by the Appellant unilaterally. 4. The Ld. CIT (A) 'has erred in dismissing the Appellants' claim for additional sugar cane price of Rs. 1,14,59,037 which the Appellant had claimed on the basis of purchase of sugar cane. The Ld. CIT (A) disallowed the claim stating that the same has crystallized in the previous year 2004-05 relevant to Assessment Year 2005-06 and he further erred in stating that the same is to be allowed in the Assessment Year 2005-06 on merits. The Ld. CIT (A) has erred in dismissing the Appellants' claim u/s 80HHC Considering the Assessee's income as assessed under book profit u/s 115JB. The Ld. CIT (A) has erred in following formulations in the case of CIT vs Ajanta Pharma (223 ITR 441 (2009) (Bombay)." 2. Ground No. 1 is regarding depreciation of Rs. 417784/- on depreciation on account of addition made during the year between as per block of assets as per companie....
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....ly filed the reconciliation statement as under:- Division Item Addition as per books Addition as per Tax Audit Report Sugar Division Furniture & Fixture Add: Furniture & Fixture as per accounts 651.29 651.29 22.64 673.93 Chemical division Furniture & Fixture Less : Plant & Machinery as per I.T. Act 49.32 49.32 (-) 22.63 (A) 49.32 26.69 Sugar Division Office Equipment (Not considered by AO) 0 18.65 Chemical Division Office Equipment (Not Considered by the AO) 0 22.64 (B) 0 41.29 (A)+(B) 67.98 7. The CIT(A) rejected the contention of the assessee and confirmed the addition. 8. Aggrieved by the order of CIT(A), the assessee is in appeal before us and filed the reconciliation statement as under:- Distillery & Chemical Division Additions to fixed assets during the previous year. [To the extent of the difference that is relevant for the appeal] Addition on account of As per book [In Rs.] As per Income Tax [In Rs. ] Plant & Machinery Furniture & Fixtures 3,02,59,000 49,32,000 2,86,22,687 6....
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....n has been claimed. The assessee submitted that it has claimed lower depreciation @ 10% on furniture & fixture under the Income Tax Act while depreciation of plant & machinery @ 25% under the Income Tax Act and hence lower depreciation has been claimed and no prejudice is caused to the Revenue. 10. Ld. DR on the other hand relied upon the order of authorities below. 11. We have considered the rival contention and carefully perused the relevant material on record. We have observed that assessee has claimed depreciation on furniture & fixture of Rs. 67,98,208/- in distillery & chemical division and furniture & fixture of Rs. 40,65,104 in sugar division and has claimed lower depreciation while merging the office equipment into furniture & fixture an no prejudice is caused to the Revenue and hence the claim of assessee is hereby allowed. 12. Ground no. 2 is relating to stamp fee paid of Rs. 4,00,200/- for agreement pertaining to co-generation project in respect of the agreement entered into US grant/aid which was disallowed by the AO by considering the same to be capital expenditure as the grant of Rs. 167.30 lac received by the assessee has been considered as capital receipt.....
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....guishable because it relates to the lease of 20 years entered into by the assessee, whereby the stamp duty, professional /registration charges paid for preparation and getting registered deed of lease was considered to be revenue expenditure. However, in the present case, the issue relates to the stamp fee paid for execution of agreement of capital subsidy. 18. Ground no. 3 is regarding confirming the charges of Rs. 19,37,524/- u/s 41 in respect of sundry credits balance written off by the appellant unilaterally. 19. At the outset, the Ld. AR of the assessee submitted that the assessee does not wish to press the grounds of appeal no. 3 and, therefore, the same is hereby dismissed as not pressed. 20. Ground no. 4 relates to the additional sugar cane price of Rs. 1,14,59,037/- which the assessee has claimed on the basis of purchase of sugar cane. 21. The assessee submitted that the assessee is in the business of sugar in which it purchases sugar cane from farmers. Normally the sugar cane prices are decided in three stages viz., 1st installment adhoc payment by Central Advisory committee, second installment of case price is recommended by State Government Committee and the....
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....efore the CIT(A) for assessment year 2005-06 which is still pending. It was also submitted that his claim got crystallized in assessment year 2005-06 and hence should be allowed. 24. On the other hand, Ld. DR submitted that it needs to be verified that this be not allowed more than once as assessee is making claim in assessment year 2002-03, 2004-05, 2005-06 and 2006-07. 25. We have considered the rival submissions. We hold that assessee is following the mercantile system of accounting. Assessee is entitled for the claim of expense on Revenue/trading account on crystallization of the law. In the said amount in assessment year 2005-06 although it might pertain to assessment year 2002-03. Hence assessee will be entitled for the said claim for the assessment year 2005-06 subject to verification on merits by authorities below about the bonafide and genuineness of the claim. The authorities below are also directed to verify that the assessee's claim is allowed not more than once. The assessee has claimed that this amount in assessment year 2002-03, 2004-05, 2005-06 and 2006-07. Subject to above verification additional claim should be allowed only in assessment year 2005-06 sub....