TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 256
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....enditure. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing deduction u/s 10B on the amount of other processing charges of Rs. 2,81,827/- claimed to be received from customers. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing deduction u/s 10B insurance claim of Rs. 7927/- and discount received from suppliers of Rs. 22,459/- 3. The revenue has raised the following grounds of appeal for Assessment Year 2009-10: "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing additional depreciation u/s 32(1)(iia) of Rs. 28,02,000/- on the items of electric Installations, Tools, Dyes and Moulds. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of wages payment of Rs. 78,27,098/- paid to M/s Ganpati Enterprises holding the same as revenue expenditure. 3. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleted the disallowance of Rs. 36,37,151/- made in respect of Swap Charges and Loan Processing Charges by holding the same as ....
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....depreciation is in accordance with the law. Hence, we confirm the order of the ld CIT (A) in allowing the additional depreciation of Rs. 841245/- on electrical installation, tools, dies and moulds. In the result, the ground No. 1 of the appeal is dismissed. 9. The ground No. 2 of the appeal is against the deletion of disallowance of wages payment of Rs. 12426484/- as revenue expenditure. The ld Assessing Officer has noted that wages of Rs. 21907287/- has been paid during the year and there is no substantial increase in the turnover of the assessee. The wages payments have been made to one M/s. Ganpati Enterprise, the assessee did not provide any agreement of wages payments of those parties. As assessee has failed to provide the reasonable reasons of the payment of wages and hence, it was presumed by LD. AO that such labour wages may have been used for construction of building. Hence, an amount of Rs. 12426484/- was disallowed as capital expenditure. Ld CIT (A) deleted the disallowance for the reason that there was no evidence in support of the doubt raised by the ld AO. 10. On appeal before us ld DR relied on the order of the ld Assessing Officer. Against this ld AR relied on the....
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....h 4.75% ESI Charges, 13.61% PF and EPS and 6% service charges and Rs. 2/-per employee welfare fund. The agreement with Ganpati Enterprises was renewed on 02.11.2006, 28.11.2007, 23.12.2008 with revision in minimum wages every year. The appellant has filed copies of registration of Ganpati Enterprises with Assistant Commissioner of Service Tax, Regional Provident Fund Commissioner, ESIC Faridabad and license of labour contract issued by Haryana Govt. in support of its contention. The appellant claims that labours hired with Ganpati Enterprises was utilized for different purposes as mentioned above, which includes the semi skilled manpower used in the production and clinic work of the plant. It claims that payment to Ganpati Enterprises was made for hiring labour which was utilized in the business of appellant. The appellant has also filed confirmation from Ganpati Enterprises wherein it has mentioned that it has supplied labour to the appellant for its manufacturing activity in the factory. The labour supplied to the appellant are subject to deduction of PF, ESI, EPS, therefore, it cannot be said that labours were not supplied to the appellant. The payment to Ganpati Enterprises wer....
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.... charges of Rs. 281827/-. The assessee is 100% export oriented unit claiming deduction u/s 10B of the Act. During the year it has received order processing charges from its customers amounting to Rs. 281827/- on which deduction was not allowed as it was found that the profit is not derived from export of articles or things. The assessee carried the matter before the ld CIT(A) who in turn held that these charges were received from the customers due to variation in their non standardization items and therefore, it was part of total export turnover and hence, claim of deduction was allowed. 14. On appeal before ld DR relied upon the order of ld Assessing Officer and submitted that deduction u/s 10B on this sum is not allowable. Ld AR relied upon the order of the ld CIT (A) and submitted that these incomes are deductible u/s 10B of the Act. 15. We have carefully considered the rival contentions. According to schedule-XV if the audited account of the assessee a sum of Rs. 281827/- was received on account of processing charges. There is no dispute on the amount of total turnover as well as the export turnover. However the only dispute is with respect to profit eligible for deduction sh....
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.... 23. Both the parties confirmed before us that ground No. 2 of the appeal of the revenue for AY 2008-09 and facts of this ground are similar. We have also perused the facts of the appeal and are also convinced that the grounds are similar. While deciding the appeal of the revenue for AY 2008-09 we have deleted the disallowance in absence of any evidence about the use of labour for constructing any capital asset. Therefore, as we have already deleted the disallowance as AY 2008-09 on identical issue, for similar reasons the disallowance of Rs. 7827098/- made during the year is also not sustainable. Hence, we confirm the finding of the ld CIT(A) and dismiss ground No. 2 of the appeal. 24. Ground No. 3 of the appeal is against the deletion of disallowance of Rs. 3637151/- of swap charges, by holding the same as revenue expenditure. Ld AO has noted that during the year assessee has claimed swap charges of Rs. 2967111/- and loan processing charges of Rs. 670040/- totaling to Rs. 3637151/-. The swap charges are on transfer of loan from one lender to another when the assessee took the loan when it was in process of expansion of its business. Therefore, ld AO stated that it is capital ex....