TaxTMI 
TaxTMI 
2012 (8) TMI 989
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....vant material on record. An identical issue has been considered by this Tribunal for the assessment year 1996-97 and 1997-98 vide order dated 16 May 2012 relating to the legal charges incurred by the assessee in connection with the land acquisition in para 43.1 and 43.2 as under: "43.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that the issue raised in this appeal has been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in para 12.1 as under: "12.1 In Assessment Year 1994-95, in assessee's own case in ITA No.3698/Mum/99, vide order dated 13th Feb 2009, this Tribunal on an identical expenses, has held that they were capital in nature. Following the same, we dismiss ground nho.11 of the assessee." 43.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue in favour of the revenue and against the assessee." 2.2 Respectfully following the earlier orders of this Tribunal, we decide this issue in favour of the revenue and against the assessee. The order of CIT(A) qua th....
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....erest on surface rent of Rs. 3,40,666/- and interest on electricity duty Rs. 23,12,255/- u/s. 43B of the Act. 11.1 After hearing both the sides, we find identical issue had come up before the Tribunal in assessee's own case for the A.Ys. 1986-87 to 1989-90. We find the Tribunal in the consolidated order dated 22' March, 2007 at para 20 of the order, after following the decision of the Tribunal in assessee's own case for the A.Ys. 1984-85 to 1985-86 has deleted such disallowance. Respectfully following the order of the Tribunal, in assessee's own case and in absence of any contrary material brought to our notice, the ground raised by the assessee is allowed." 13.2. Respectfully following the aforesaid decision of the Tribunal, we delete the disallowances sustained by the CIT(A) and allow ground No. 12. 10.3 Thus, as far as the issue regarding the disallowance of interest on welfare cess, electricity duty and surface rent u/s 43B, the same is covered by the order of the Tribunal for the Assessment Year 1995-96. 10.4 As regards the disallowance of interest on entry tax, the Sr ld counsel for the assessee has submitted that this issue....
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....unds of appeal No. 25 relates to the order of the CIT(A) in upholding the action of the AO in disallowing royalty of Rs. 1,99,16,185/- and interest on royalty amounting to Rs. 24,21,576/- disallowed u/s. 43B of the Act 19.1 After hearing both the sides, we find the Tribunal in assessee's own case for the AYs 1990-91 'and 1993-94 confirmed the disallowance following the decision of Hon'ble Supreme Court in the case of Goreylal Dubey reported in 232 1TR 246. The Hon'ble Supreme Court, following it own decision in the case of India Cements reported in 188 ITR 690, held that royalty is a tax. However, the Hon'ble Supreme Court in the case of State of West Bengal vs. Kesoram Industries. Ltd., reported in 266 ITR 721 at page 767of the order has held as under "We have clearly pointed out the said error, as we are fully convinced in that regard and feel ourselves obliged constitutionally, legally and morally to do so, lest the said error should cause any further harm to the trend of further harm to the trend of jurisprudential thought cantering around the meaning of royalty. We hold that royalty is not tax. Royalty is paid to the owner of land who may ....
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....ing the income of the appellant company. 4.4 Without prejudice, the CIT (A) ought to have allowed depreciation on the amount of Rs. 21,54,290/- being contribution to State Government for construction of regulator-cum-bridge." 5.1 We have heard the ld Sr. counsel for the assessee as well as the ld DR and considered the relevant material on record. The ld Sr. counsel has submitted that this issue was considered and decided by this Tribunal in assessee's own case for the assessment year 1994-95 and the revenue has not filed any appeal against the order of this Tribunal pertaining to this issue. He has referred the appeal filed by the revenue before the honourable High Court in ITA no. 2930 of 2010 and submitted that the revenue did not challenge the finding of this Tribunal on this issue in the appeal before the honourable High Court. The learned D.R. has not disputed this fact that the revenue has not challenge the finding of this Tribunal on this issue for the assessment year 1994-95 before the honourable High Court. This Tribunal for the assessment year 1994-95 has considered and decided in para 32.5 to 32.11 as under: "32.5 We have considered the rival con....
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....as held to be a revenue expenditure. This judgment of the Hon'ble Gujarat High Court too, supports the case on our hand. 32.9 In the instant case, undisputedly, the assessee does not have any ownership or right over the bridge constructed by the State Government. The assessee contributed towards part of the expenditure for construction of a bridge to prevent the sea water entering into the factory premises of the assessee which naturally hurt the commercial interest of the assessee and for which the assessee was making a certain recurring expenditure annually in preventing the sea water entering into its premises. Replacement of annual recurring expenditure by one time contribution is revenue expenditure. Therefore, in our considered opinion, the expenditure did not bring any capital asset of an enduring benefit or advantage and the object of making the payment was purely one of commercial expediency. 32.10 Be that as it may be, let us step into another aspect of the matter. It is a fact that the AO held the impugned expenditure as capital in nature without considering it for depreciation. It is also a fact that no new asset came to the assessee out of the exp....
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....3 Without prejudice, the appellant prays that as decided by the Tribunal in the appellant's own case any interest subsequently withdrawn by the Income Tax Department should not be taxed in the year under appeal and the same be excluded from the computation of total income of the appellant." 7.1 We have heard the ld Sr. counsel for the assessee as well as the D.R and considered the relevant material on record. An identical issue was considered and decided by this Tribunal in assessee's own case for the assessment year 1996-97 and 1997-98 and para 13.1 to 14 as under: "13.1 We have heard the Sr ld Counsel for the assessee as well as the ld DR and considered the relevant material on record. At the time of hearing of this appeal, the Sr ld counsel for the assessee has submitted that the benefit of the interest subsequently withdrawn as a result of appellate orders should be given to the assessee and the interest subsequently withdrawn should not be taxed. He has relied upon the decision of the Tribunal in the case of Avada Trading Co reported in 100 ITD 131. 13.2 We further note that for the AY 1993-94, the Tribunal has considered and decided a similar issu....
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....rned Sr counsel of the assessee as well as the learned DR and considered the relevant material on record. For the assessment year 1996-97 and 1997-98, this Tribunal has considered and decided an identical issue in para 15.2 to 15.4 as under: "15.2 We have heard the Sr ld Counsel for the assessee as well as the ld DR and considered the relevant material on record. A similar issue has been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in paras 29.1 and 29.2 as under: 29.1 On a similar issue the Tribunal in assessee's own case in AY 1994-95(supra) in paragraphs 25 to 25.2 has held as follows:-, '25. In grounds of appeal No. 32 to 35, the assessee has challenged the order of the CIT(A) in allocating head office expenses and thereby reducing the quantum of deduction available to the assessee under the following provisions: Section Rs. 8OHH 14,20,000 801 5,54,600 80M 7,50,000 80-0 3,50,000 30,74,600 15.3 The Sr ld counsel for the assessee has pointed out that the revenue has not file....
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....of honourable Supreme Court in case of ACG Associated Capsules reported in 67 DTR (SC) 205, the Explanation to section 80 HHC to be applied on net interest and not on gross interest. Accordingly, we direct the AO to apply clause (baa) in respect of interest receipt by following the decision of honourable Supreme Court(supra). 11. As regards the deduction under section 80 HHC to be computed for the assessee company as a whole, the said issue has been considered and decided by this Tribunal in assessee's own case for the assessment year 1995- 96 in para 27.4 and 27.5 as under: 27.4 In respect of Ground No. 24, the ITAT in AY 1994-95 in assessee's own case (supra) dealt with the similar issue in paragraph 22 to 22.2, which are as follows: "22. Grounds of appeal Nos. 28 and 29 are as under: "28. In the event that the CIT(A)'s order that deduction u/s. 80HHC of Act is to be computed by considering all units of the appellant as a whole is upheld, then the CIT(A) erred in including inter-unit and inter divisional transfers of Rs. 338.41 crores as part of total turnover, which results in the same figure being counted as a number of times and hence ....
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....of 2004 for the assessment year 1995-96 and 1994-95 respectively. This issue has been decided in favour of the assessee by this Tribunal and the revenue did not press this issue before the honourable High Court; therefore, the findings of this Tribunal have attained the finality. Accordingly, following the earlier order of this Tribunal, we decide this issue in favour of the assessee and against the revenue 12. The Ground 8 of the assessee is as under: Interest on securities: The learned CIT (A) ought to have held that interest notionally computed on a per day basis on securities amounting to Rs. 2,27,01,488/- cannot be taxed, as the said interest had not accrued i.e. interest was not due for payment on 31.3.98 and no right to receive interest vested in the appellant as on that date. 12.1 We have heard the learned senior counsel as well as the ld D.R and considered the relevant material on record. At the outset, we note that an identical issue was considered and decided by this Tribunal in assessee's own case for the assessment year 1996-97 and 1997-98 in para at 19.1 to 19.3 as under: 19.1 We have heard the Sr ld Counsel for the assessee as wel....
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....ssessee and against the revenue." 12.2 Following the earlier order of this Tribunal, we decide this issue in favour of the assessee and against the revenue. 13. Ground number 9 raised by the assessee is as under: Deduction u/s 801A: 9.1 The CIT (A) erred in holding that the profits of Vikram Power Unit for the purpose of section 801A of the Act amounted to Rs. 4,17,62,000/-. She ought to have held that the said profits amounted to Rs. 9,60,78,619/-. 9.2 The CIT (A) erred in upholding the action of the AO that for computing profits of Vikram Power Unit the provisions of section 80 IA (9) could be invoked. 9.2 Assuming for the sake of argument that section 80 IA could be invoked, the CIT (A) ought to have held that the transfer rate of the power considered by the appellant is the correct transfer rate in view of the provisions of sub-section (9) of section 80 IA of the Act. 9.4 Without prejudice, the CIT (A) failed to appreciate that the alleged power purchase price of MSEB Rs. 2 per unit considered by the AO is an estimate/guess work and without any evidence/support. 9.5 Without prejudice, the CIT (A) failed to appreciate t....
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....orities below have reduced the sale price by Rs. 2 for the purpose of computation of deduction under section 80 IA. 15.1 At the outset, we note that an identical issue has been considered and decided by this Tribunal in the case of West Coast Paper Mills Ltd (supra) in para 7 as under: "7. That leaves us with the issue relating to the rate to be adopted for the unit of power generated and supplied to the paper division, which would impact the profit to be determined for the purpose of section 80-IA of the Act. The assessee adopted the rate at which KSEB supplied power to industrial user which the Assessing Officer considered to be purely a notional rate and has no semblance or reality. These rates, according to the Assessing Officer, were unrealistic as KSEB is not expected to purchase power from the assessee and it is also unrealistic to expect KSEB to purchase power from the assessee at a future date at the same rate on which it supplies power to the other industrial users and it is also not the fact that the assessee has sold any power to KSEB in any future year. The CIT(A) asked the assessee to submit an alternative calculation based on the average actual per unit c....
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....etc., which is not connected with the business of the assessee. Therefore, the CIT(A) has correctly and reasonably directed the allocation of the indirect expenses for the purpose of arriving at the income of the eligible unit and we decline to disturb such direction of the CIT(A). Accordingly, the grounds raised both by the assessee and the revenue should be taken to have been rejected." 15.2 Further, a similar view has been taken by the Chennai Benches of this Tribunal in case of Sri Velayudhaswamy Spinning Mills P Ltd (supra). Accordingly, following the order of this Tribunal, we decided this issue in favour of the assessee and against the revenue. 16. Ground number 10 in assessee's appeal is as under: "Debenture Redemption Premium: The CIT (A) erred in not directing the AO to allow debenture redemption premium actually paid during the previous year amounting to Rs. 2.17 crores in the event Department's stand that debenture redemption premium is allowable on payment basis and not on accrual basis is upheld by the appellate authorities." 16.1 We have heard the learned senior counsel as well as the learned DR and considered the relevant material ....
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.... should be remanded to the Assessing Officer with a direction to the Assessing Officer to examine the claim of the assessee after affording opportunity of being heard to the assessee and decide the issue. We order accordingly. For statistical purpose the additional ground of assessee is allowed." 20.1 Since in the earlier year, the issue was remitted to the record of the Assessing Officer for considering the claim of the assessee; accordingly, the issue raised in the additional ground is remitted to the record of the Assessing Officer for considering and examining the same. 21. The second additional ground is regarding interest under section 244-A on the refund out of self-assessment tax on the date of payment. 21.1 We have heard the ld Sr counsel for the assessee as well as the ld DR and considered the relevant material on record. The learned Sr counsel for the assessee has relied upon the decision of honourable Karnataka High Court in case of Vijaya bank reported in 338 ITR 489 as well as decision of honourable Delhi High Court in case of Commissioner of Income-tax v. Sutlej Industries Ltd. reported in 325 ITR 331. He has also referred various decisions of this Tribunal ....
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....er rule 6D of the I.T.Rules, 1962 in the cases of Shri P. Malhani of Rs. 83,272/-, Shri M.C. Bagrodia - Rs. 2,30,117/-, Shri S.K.Jain - Rs. 1,84,395/-, Shri B.K.Singh - Rs. 1,13,001/- and Shri Vikram Ispat of Rs. 7,53,722/- without appreciating the fact that the object of the tour was to purchase machinery and hence, the expenses are capital in nature. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of foreign travel expenses in the case of Smt. V.M. Sand, Shri Toruram, Smt. Jam and Shri Suvrat Jain of Rs. 3,07,513/-, Shri S.B. Agrawal, Shri S.K.Gupta and Shri Prakash Bhargava of Rs. 6,46,373/- and Smt.C.P.Jajoo of Rs. 68,085/- without appreciating the fact that the assessee did not furnish information on tour reports and the said expenditure is not incurred in connection with the assessee's business. 8. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition on account of legal charges of Rs. 14,25,603/- incurred by the assessee in connection with land without appreciating the fact that these legal expenses are incurred on petition related to such la....
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.... erred in fact while holding that the CIT(A)-XII, Mumbai had directed the AO in his appellate order for Assessment Year 1995-96 that the deduction should be allowed on the basis of net receipts and not on gross receipts without appreciating the correct fact that the CIT(A)-XII has restricted the deductible expenditure at Rs. 5 lacs as against Rs.lilacs taken by the Assessing Officer. 15. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to exclude from the turnover the amounts of excise duty and sales-tax relying on the decision of the Hon'ble Mumbai High Court in the case of Sudarshan Chemical Inds. (245 ITR 769) which has not been accepted by the department and agitated by way of SLP." 16. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of Rs. 15,96,12,266/- being the interest liability relating to construction period without appreciating the fact that the said amount represents interest paid by the assessee on loan taken for establishing seven new units before completion of the construction and, therefore, the assessee's claim does....
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....in paras 33 to 33.2 as under: "33 First ground raised in this appeal reads as under: "On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow depreciation in respect of Intake Well, Teiphers, StorageTank, Acid Tank, Lagoon Tank, Effluent Tank, Lime Storage Tank, False Ceiling, etc., holding them as plant ignoring the fact that these are integral part of the building and, as such, rate of depreciation is allowable at the rate applicable to building." 33.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has been considered and decided by the Tribunal in assessee's own case for the Assessment Year 1995-96 in para 38 as under: "38. We have carefully perused and considered the rival submissions, facts of the case and the relevant records. In the course of present appellate proceedings, id. AR submitted that the issue of depreciation in respect of Intake Well, Teiphers, Storage Tank, Acid Tank, Lagoon Tank, False Ceiling, etc has .been decided in favour of the assessee by the....
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.... 40 as under: "40. The issue raised by the revenue in ground No.1 (c) is that the learned CIT(A)has erred in deleting the disallowance of depreciation claimed on shops etc., at Bhiwandi without appreciating the fact that these shops are not business assets. The ld AR in the course of present appellate proceedings submitted that the issue in question has decided in favour of the assessee by various Co-ordinate Benches in assessee's own case in ITA No.7593/M/97 A.Y. 1990-91, ITA No.1523/M/97 A.Y. 1993-94, ITA Nos.939/M/93 and others for A.Y 1986-87 to 89-90 and ITA No.3698 and 3100/M/99 for A.Y 1994-95. The ld DR was fair enough to concede this contention of the ld A.R. We have carefully perused the above Tribunal orders and found that this issue is decided in favour of the assessee by the Co-ordinate Benches. Respectfully following the orders of the Co-ordinate Benches, this issue is decided in favour of the assessee and against the revenue. Therefore, this ground of the revenue is rejected." 35.2 We further note that this issue raised by the revenue before the Hon'ble High Court for the AY 1995-96 but the same was dismissed vide para 4 as under: "....
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....ssa High Court decision in the case of CIT V. Electrosteel Castings Ltd 130 TTR 25. Bombay High Court decision in the case of Siemens India Ltd vs CIT 217 ITR 622 and the Tribunal's decisions in ITA No.7397/Bom/88 dt. 2-5-3-97 for asst.year- 73-74 for Intake well, in ITA No.2890/Bom/88 dt. 4-1-96 for asst.year 72-73 for telpher in ITA No.250/Indore/76-77 order dt. 10-5-93 for asstt. Year 68- 69 by applying the functional test. Quoting from the Tribunal order for assessment year 1973-74, the Tribunal held that the observations in that order would apply to all the tanks in issue as they are all connected and used for the continuous supply and disposal of water, acid, lime coal etc. As regards false ceiling also, applying the functional test it was held that it was not a mere ceiling of ordinary nature but a ceiling to provide control of the temperature and humidity, which is very essential to avoid breakage of the fibre and yarn. Respectfully following the earlier order of the Tribunal we do not see any infirmity in the order of the CIT(A direct the assessing officer to allow depreciation on all these items by treating them as plant and machinery. Grounds 10 and 13 are rejected."....
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....ee's own case, we decide this issue against the revenue and in favour of the assessee." 30.2 Following the earlier order of this Tribunal, we decide this issue against the revenue and in favour of the assessee. 31. Ground no.5 is regarding remuneration paid to Lady Employees. 31.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 39.1 and39.2 as under: 39.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has been considered and decided by the Tribunal in assessee's own case for the Assessment Year 1995-96 in para 46.1 as under: "46.1. The ld. D.R placed reliance on the assessment order. However, ld AR contended that the revenue has not filed appeal on this ground in respect of assessment year 1990-91, 1993-94 and 1994-95. Therefore, to mai....
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....and in law, the CIT(A) erred in deleting the disallowance of Rs. 2,88,166/- paid to Mr.Pattabi, Mr.Tharuram, Mrs.Jain and Mrs. Saboo and disallowance of Rs. 1,90,893/- paid to Mr. and Mrs.A.V. Birla, and disallowance of Rs. 2,54,593/- to Mrs.Jajoo without appreciating that the said payments by the assessee on foreign travels of these persons are not incurred wholly and exclusively for the purpose of the business and, therefore, 20% deductible from the assessee's total income. 42.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that the issues raised in this appeal have been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in paras 10.1 to10.5 and 52.1 as under: 10. 1 In respect of disallowance made treating the expenditure as capital in nature and for various reasons listed in 9(a) in ground of appeal, it is in dispute that in assessee's own case in AY 1994-95 in ITA No. 3698/Murn/99, vide order dated 13th February, 2009 the Hon'ble ITAT held as follows: '9.8 As regards the expenditure incurred by the assessee o....
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.... event, either it may be disallowed altogether or it may be allowed treating it was a revenue expenditure. In our opinion having regard to the facts and circumstances of the present case it is difficult to hold that the expenditure incurred by the managing director on the foreign tour can be held to be an expenditure of capital nature. It may be apposite to observe that the dividing line between capital expenditure and revenue expenditure, which was held by the courts to be thin all throughout has become much thinner and thinner by a catena of decisions of the Supreme Court rendered during the last few years. Applying above ratio to the facts of the present case, we are of the clear opinion that the Tribunal was not justified in holding the expenditure on the tours of its managing director was capital expenditure and in disallowing the claim of the assessee for deduction under section 37(1) of the Act. In that view of the matter, we answer question No. I in the affirmative, Le., in favour of the assessee and against the Revenue.' 10.2 In view of the above, the expenses listed in ground 9(a) are directed to be allowed as revenue expenditure. 10.3 In respect of ....
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....: 43.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that the issue raised in this appeal has been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in para 12.1 as under: "12.1 In Assessment Year 1994-95, in assessee's own case in ITA No.3698/Mum/99, vide order dated 13th Feb 2009, this Tribunal on an identical expenses, has held that they were capital in nature. Following the same, we dismiss ground nho.11 of the assessee." 43.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue in favour of the revenue and against the assessee. 33.2 Following the earlier order of this Tribunal, we decide this issue against the assessee and in favour of the revenue. 34. Ground no.9 is regarding disallowance u/s 43B (b)(c) and (d). 34.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own c....
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.... statistical purposes." 53.2 Respectfully following the above decision the ground of the revenue is treated as allowed, for statistical purpose The Assessing Officer is directed to follow the observations and findings as reproduced above". 45.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we direct the Assessing Officer to decide this issue in terms of the earlier order of this Tribunal." 34.2 Following the earlier order of this Tribunal, we decide this issue against the revenue and in favour of the assessee. 35. Ground no.10 is regarding disallowance of project expenses. 35.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 46.1 and 46.2 as under: "46.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that the is....
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....004 at para 114 to 118 of the order has held as under: 114. Ground No. 22(1990-91), ground No. 25(1991-92) and ground No. 24 (1992- 93) are that the learned CIT(A) erred on facts and in law in upholding the action of the AO in disallowing the project expenses aggregating to Rs. 16,17,213/-, Rs. 17,92,938/- and Rs. 23,52,205/-for the assessment years 1990- 91, 1991-92, 1992-93 respectively treating the same as expenditure of capital nature. The facts are that in the Chemical Division, Nagda the assessee had incurred an amount of Rs. 16,I7213/- and grouped the various expenses under the head 'New Project Expenses' which are detailed herein below: 1990-91 (Amt Rs.) 1991-92 (Amt Rs) 1992-93 Amt (Rs) Retainer ship fee 2,95,500 1,83,000 3,36,500 Application, advt profile and other exp 6,18,743 12,27,787 9,50,541 Foreign travel 7,02,970 3,82,151 10,65,164 16,17,213 17,92,938 23,52,205 The assessee's claim was that these expenses are allowable as revenue expenditure as the new project related to existing business activities and for the expansion of its existing business. It was further p....
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....own in the earlier assessment year would apply to the present assessment year. Respectfully following the decision of the Tribunal referred to above, we direct that the claim made by the assessee be accepted. Thus, ground no.13 is allowed." 46.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue in favour of the assessee and against the revenue." 35.2 Following the earlier order of this Tribunal, we decide this issue against the revenue and in favour of the assessee. 36. Ground no.11 is regarding other expenses. 36.1 As regards the expenses by way of helps to employees and literary help to journalists upto 50% and contribution to local organisation. These items are covered by the order of the Tribunal in assessee's own case for the earlier years. For the Assessment Year 1996-97, and 1997-98, this issue has been considered and decided by this Tribunal in paras 47 to 47.8 as under: 47. Ground no.19 raised by the revenue on account of the following: a) Other business expenditure Rs.24,24,377/- b) Rural development expenses Rs.6,15,989/- c) Expenses by way of help Library help to journ....
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.... CIT(A) in confirming the disallowance other than business, expenses of Rs. 1,92,263/- disallowed by the Assessing Officer treating the same as non-business expenses. 13.1 After hearing both the sides, we find the Assessing Officer disallowed an amount of Rs. 1,92,263/- claimed by the assessee company treating the same as non business expenditure, the details of which are as under: Amount (Rs) Total Amt (Rs) Grasilene Exp. By various offices 36551 Pulp/M Rural Devp Exp 72475 HPF Exp On fruits Exp. At Delhi office Petty exp 10545 7499 1055 19099 Chem Medical help to others Sangeet Kala Kendra 44877 2000 46877 NCS Medical help to others 16106 ESM Conveyance to anti dumping and duty personnel 1155 192263 13.2 We find the CIT(A) upheld the action of the Assessing Officer. After going through the nature of expenses we find no. satisfactory evidence was brought to our notice that the expenditure incurred by the assessee on account of the above items is wholly and exclusively for the....
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....elopment expenditure is decided against the assessee and the expenditure of sundry help to employees and dependents is to be allowed but the Literary help to journalists is disallowed. 47.3 As regards ground no.19(d), we have heard the ld DR as well as Ld Sr counsel for the assessee. We note that this issue has been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in paras 21.1 to 21.2 as under: 21.1 In AY 1994-95 in assessee's own case in 1TA No. 3698/Mum/99, vide. order dated 13th February, 2o09, identical issue came up for consideration before the ITAT wherein the ITAT held as follows '15. Grounds of peal to 18 relates to the order of the CIT(A) in upholding the disallowance of sundry expenses of Rs. 2,24775/- disallowed by the Assessing Officer on account of contribution to local originations 15.1 After hearing both the sides, we find similar issue had come up before the Tribunal in assessee' own case for the A.Ys. 1986-87 to 1989-90. We find the Tribunal vide its consolidated order dated 22nd March, 2007 had decided the issue in favour of the assessee by observing as under: "We have co....
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....he onus is always on the assessee to substantiate with evidence to the satisfaction of the Assessing Officer that the expenditure incurred is wholly and exclusively for the purpose of business. in the instant case the assessee has failed to prove the expenditure incurred on account of various persons other than the employees of the company that the same is wholly and exclusively for the purpose of business. Therefore, we find no infirmity in the order of the CIT(A) in sustaining this addition. The ground raised by the assessee is accordingly dismissed." 23.2 In the present assessment year also, the assessee did not file the req1ired evidence to substantiate that these expenses were incurred wholly and exclusively for the purpose of business. In view of the above, do riot find any ground to interfere with the order of CIT(A). Consequently, ground no. 19 is dismissed. 47.6 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue against the assessee and in favour of the revenue. 47.7 As regards ground no.19(f) we have heard the ld DR and ld Sr counsel for the assessee and considered the relevant material on ....
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.... Mysore Kirloskar and the decision of the Hon'ble Madras High Court in the case of Madras Refinery (supra) as relied upon by the ld Sr counsel for the assessee. Accordingly, we decide this issue in favour of the assessee and against the revenue. 40. Ground no. 12 is regarding disallowance u/s 80I/80IA. 40.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 48 to 48.2 as under: 48. Ground nos 20 and 21 raised by the revenue read as under: 20. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance u/s.801/801A of the Income Tax Act without appreciating the fact that head office of the assessee company is a controlling unit which manages the affairs of all units of the company and, therefore, proportionate expenses of the head office are rightly reduced by the Assessing Officer from the profits of the as....
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....ent years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 50 to 50.2 as under: "50 Ground no.24 raised by the revenue reads as under: 24. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to exclude from the turnover the amounts of excise duty and sales tax relying on the decision of the Hon'ble Mumbai High Court in the case of Sudarshan Chemical Industries (245 ITR 769) which has not been accepted by the department and agitated by way of SLP. 50.1 We have head the ld DR as well as ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue is covered in favour of the assessee by the decision of the Hon'ble Supreme Court in the case of Laxmi Machines Works reported in 290 ITR 667. The Tribunal in assessee's own case for the AY 1995-96 has also considered and decided this issue in para 27.3 to 27.5. "27.3 Ground No. 23 is with regard to excluding excise duty from the total turnover, which deserves to be allowed in view of the decision in the case of Sudarshan Chemical Ltd. 245 ITR....
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....igure of total turnover. Respectfully following this judgment, this aspect of the matter is also decided in favour of the assessee. This ground No. 26(ii) stands allowed. 22.2 Respectfully following the decision of the Tribunal in assessee's own case we set aside the order of the CIT(A) and direct the Assessing Officer to exclude the interdivision transfer from the total turnover." 27.5 In view of the above the claim of the assessee is directed to be accepted. No. 24 is allowed." 50.2 Accordingly, this issue is decided in favour of the assessee and against the revenue." 42.2 Therefore, following the earlier orders of this Tribunal, we decide this issue in favour of the assessee and against the revenue. 43. Ground no. 16 is regarding disallowance of interest u/s 36(1). 43.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 52 to 52.4 as under....
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....e to the conclusion that having regard to the common management and control, common funds, inter-connection and inter-dependence, etc. of the units on each other, the assessee was carrying on "same business" and, therefore, payment of interest would be a revenue expenditure. We find the Hon'ble Supreme Court in the case of Dy. Commissioner of income Tax vs. Core Health Care Ltd. 298 TTR 194 has held that allowance of interest has to be made even if machinery is not used in the year of business. Consistent with the earlier finding recorded by the Tribunal in assessee's own case for assessment year 1993-94 on the very same issue, as well as the decision of Hon'ble Supreme Court in the case of Core Health Care Ltd. (supra), we do not find any merit in the arguments of the revenue. The judgments of the jurisdictional High Court relied upon by the assessee also supports its case. Ground No.8 is rejected." 52.4 Accordingly, respectfully following the order of the Tribunal, we decide this issue in favour of the assessee and against the revenue." 43.2 Therefore, following the earlier orders of this Tribunal, we decide this issue in favour of the assessee and against....
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....ware Services without appreciating that the transaction is not at a arms length and the branch is not functioning as an independent unit. 54.1 The assessee claimed that the profit of USA branch of M/s. Birla Consultancy and Software Services are not taxable in India as per DTAA between Indo USA. The Assessing Officer had made an addition stating that the income has to be taxed in both the countries and the benefit as per para 7 of DTAA is not available to the assessee. The Assessing Officer held that the profit of USA branch of the assessee, resident in India, shall be taxed in USA only, if the transactions are at ALP and the branch function has an independent unit. Thus, the Assessing Officer was of the view that this is not so in the case of the assessee. Accordingly, the profit is taxable in India. 54.2 On appeal, the CIT(A) held that the assessee would get the benefit of article 7 of the Indo USA DTAA as the business is being carried out through a PE within the meaning of article 5. 55. Before us, the ld DR has relied upon the order of the Assessing Officer and on the other hand, the ld Sr counsel for the assessee has relied upon the decision of the H....