TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 31
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.... of provision for write off of spares of Rs. 10 lacs without going into the merit of the case." 3. Briefly stated facts are that the assessee has debited a sum of Rs. 10 lac under the head loss on account of diminution in value of stores and spares. The AO required the assessee to explain the same. The assessee explained vide reply dated 26.10.2009 but the AO has not accepted the reply of the assessee and hence, he disallowed the provision for write off of stores and spares as not allowable expenditure. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of the assessee by relying on the order of AY 2004-05 and also observing that even the AO has not made any addition on the same issue for AY 2006-07. For this, he observed as under: "I have considered the submissions of the appellant and also the details furnished by the appellant. The AO made the disallowance since the "provision for write off of stores and spares" is not an allowable expenditure, stores and spares are consumable items of a manufacturing business and, therefore, consumption of stores is an ordinary incidence of manufacturing business. I agree with the decision of CIT(A)-V, in ITA No. 262 i....
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..... In AY 2006-07 also the assessee had written off Rs. 184. 07 lacs. In the regular assessment u/s. 143(3) for A. Y. 2006-07 the same AO after due consideration of the explanation and the CIT(A)'s order for AY 2004-05, had refrained from making any disallowance. In view of the facts and circumstances of the present case, We are of the view that the claim of assessee, writing off in its Profit & Loss Account, the value of obsolete stores and spares, is a genuine claim and CIT(A) has rightly allowed the same. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance made by AO by invoking the provisions of section 14A read with Rule 8D of the I. T. Rules, 1962 (hereinafter referred to as the "Rules"). For this, revenue has raised following ground no.2: "2. That Ld. CIT(A)-VI, Kolkata has erred in law as well as on facts, in deleting the entire addition u/s. 14A and not restricting it to certain amount applying the provision of Rule 8D, in view of the decision of the ITAT, Special Bench, Mumbai, pronounced in the case of Daga Capital Management Ltd." 6. Briefly stated facts are that the assessee has earned dividend income of Rs. 907.94....
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....companies, no expenditure is incurred for the purpose of collection of the dividend. We fimnd that the AO in the impugned order has made the disallowance by invoking Rule 8D(2)(iii) of the Rules. Rule 8D(l) of the Rules provides that where an AO, having regard to the accounts of the assessee for the previous year is not satisfied with the claim made by the assessee that no expenditure has been incurred in relation to income which does not form part of the total income; he shall determine the amount of expenditure in accordance with sub rule(2). Rule 8D(1), therefore, requires that before sub rule (2) is invoked the AO should have regard to the accounts of the assessee for the relevant previous year before resorting to sub rule(2). In the present case with reference to assessee's accounts for FY 2006-07; the assessee had proved that no expenditure was actually incurred by the assessee. The AO without dealing with or without having regard to assessee's accounts for the FY 2006-07, arbitrarily proceeded to make disallowance under Rule 8D(2)(iii) Rules. Having regard to the aforesaid facts, we are of the view that the AO was unjustified in making the disallowance of Rs. 98.23 l....
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....the Respondent company advised that the appeal of the Revenue was liable to be dismissed as it was filed without obtaining prior approval of COD which was then mandatory in all cases involving Undertakings owned by the Central Government. 5. The Respondent company was advised that a Cross Objection can be filed only where an appeal was validly filed and therefore no useful purpose would be served since the appeal filed without obtaining COD approval was liable to be dismissed. 6. Based on the advice received from the Counsel at the relevant time the Cross Objections for the AY 2007-08 was not filed on or before 03.10.2010. 7. In first week of March 2011 the company's counsel informed the Respondent company about the judgment of the Supreme Court in which requirement of obgtaining COD approvals was dispensed with and accordingly Respondent company was informed that the appeal filed by the Revenue AY 2007-08 would be admitted for hearing by the ITAT. 8. The Respondent company was also advised that in respect of issues decided against by the CIT(A) Cross Objections should now be filed since the appeal filed by the Revenue authorities would be admitted even though the same ....
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....w our attention to the details of prior period adjustment, given at assessee's paper book page 32, which reads as under: HINDUSTAN PAPER CORPORATION LTD. (TAX CELL) DETAILS OF PRIOR PERIOD ADJUSTMENT F.Y 2006-07 (AY 2007-08) (Rs. In LAKH) Particulars NPM CPM CHQ & MKT DEBIT DR CR DR CR DR CR Salaries, Wages & Others 1.66 Postage & Telegram 0.10 Chemical Consumed 0.84 Raw Material Consumed 8.65 Professional & Oth Charges 0.07 Security Expenses 6.98 Sales Return 6.16 Printing & Stationery 0.34 Rebate & Other Discount 40.27 Repairs & Maintenance 0.10 Cenvat Credit 198.09 Packing Materials 0.65 Other Misc 6.81 CREDIT &nb....
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....different part of the country. The accounting procedure prescribed by C&AG has institutionalized system of checks and balances and accordingly certain expenses required clearances from different authorities located at different locations and cities. This type of major expenditure debited under the head CENVAT credit wrongly claimed in earlier years, in which excess CENVAT credit was claimed on production of paper. During the year under consideration, on inspection of excise record by Central Excise Officials, certain procedural irregularities were detected while claiming CENVAT credit. On detection of irregularities the assessee was directed to pay basic excise duty of Rs. 1,31,10,849/-, education cess of Rs. 83,298/- and statutory interest of Rs. 66,08,110/-. The assessee provided liability of CENVAT of Rs. 198.09 cr. for the year ended 31.03.2007. This statutory liability was discharged during FY 2006-07 relevant to this AY 2007-08 and according to us, the same was allowable u/s. 43B of the Act. Accordingly, we are of the view that this liability is allowable liability and we direct accordingly. 15. The next issue in this Cross Objection of the assessee is against the order of C....