TaxTMI 
TaxTMI 
2015 (12) TMI 842
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....e first ground of appeal, the Assessing Officer has raised the following grievance:- "1. The Ld. CIT(A) erred in law and on the facts of the case in directing the A.O. not to include excise duty and sales tax in the total turnover while computing deduction u/s 80HHC" 4. Learned representatives fairly agree that this issue is now covered, in favour of the assessee, by Hon'ble Supreme Court's judgement in the case of CIT vs. Laxmi Machine Works (290 ITR 667). Grievance of the Assessing Officer, therefore, lacks legally sustainable merits. 5. Ground no.1 is thus dismissed. 6. In the second ground of appeal, the Assessing Officer has raised the following grievance:- "2. The Ld. CIT(A) erred in law and on the facts of the case in directing....
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.... 1,35,695/- and rent of Rs. 1,20,000/-. Assessee submitted that at Delhi branch the export of trading goods i.e. yarn was carried out and only one person was engaged and the clearing and forwarding was done through an agent. The connected salary expenses allocated by the appellant was of Rs. 2 lakhs and rent, rates and taxes of Delhi office of Rs. 1.20 lakhs attributable to trading of export goods have been considered. Assessee had considered clearing and forwarding expenses of Rs. 16 lakhs has been directly related to trading export. The major administrative expenses of Modem and V Sat expenses of Rs. 40.48 lakhs are related to soda ash manufacturing. Similarly it was contended on behalf of assessee that entire traveling expenses of Rs. 1,....
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....3/-, on account of reducing the foreign exchange fluctuation gain of Rs. 1,79,20,653/- from the WDV of plant and machinery in view of the provisions of section 43(1)." 12. So far as this ground of appeal is concerned, some material facts will have to be taken note of. During the course of assessment proceedings, the Assessing Officer noted that the assessee has earned foreign exchange fluctuation gain of Rs. 1,79,20,653/- on "foreign exchange loan borrowed to acquire indigenous plant and machinery" but has not reduced the same from written down value of the plant and machinery, as, according to the Assessing Officer, was the requirement of section 43A of the Income Tax Act. It was in this background that the Assessing Officer disallowed d....
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.... India, as there is no provision similar to provision of Sec. 43A. Once the asset is purchased and actual cost is determined, any subsequent change in value of loan cannot alter the cost of asset as held by Hon'ble Supreme Court in case of CIT V. Tata Iron and Steel Co. Ltd. (1998) 231 ITR 285, wherein it was held that at the time of repayment of loan, when there was a fluctuation in the rate of foreign exchange as a result of which, the assessee had to repay a much lesser amount than he would have otherwise paid, this was not a factor, which could alter the cost incurred by the assessee for purchase of the asset. The assessee might have raised the funds to purchase the asset by borrowing but what the assessee had paid for it was the price ....
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.... of section 43A are not applicable as the assets have been purchased from India and not abroad. Accordingly the A.O. is directed not to reduce the cost of fixed assets for depreciation purpose. This ground is thus allowed." 13. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 14. As learned CIT(A) has rightly held, the provisions of section 43A of the Act come into play only when the asset in question is acquired from outside India whereas, as is the undisputed position on the facts of this case, the related plant and machinery was "indigenous". There is a categorical finding to that effect by the Assessing Officer himself. As such, th....
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....d decline to interfere in the matter. 20. Ground no.1 is thus dismissed. 21. In ground no.2, the Assessing Officer has raised the following grievance :- "2. The Ld. CIT(A) erred in law and on the facts of the case in directing the Assessing Officer to allow consequential relief to the assessee on account of depreciation on computer software of Rs. 36,01,907/- and of Rs. 18,07,640/- arising out of disallowance made in A.Y. 2002-03 in the case of Icon Data Management Ltd., now merged with GHCL Ltd., when the issue is yet to reach finality, as the order of the CIT(A) is being contested by the assessee before the Hon'ble ITAT." 22. Learned representatives fairly agree that this issue is rendered infructuous as the matter has been decided ,....