TaxTMI 
TaxTMI 
2018 (1) TMI 758
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....ce of Rs. 3,35,44,273/- out of staff welfare expenses u/s 40A(9) of the IT Act. II. Deleted the disallowance made on account of publicity and public relation expenses amounting to Rs. 14,75,715/- III. Deleted the disallowance made on account of depreciation claimed in respect of intangible assets in the form of right in relation to power from APGPCL amounting to Rs. 7,90,92,994/-. IV. Deleted disallowance of depreciation in respect of assets retired from active used amounting to Rs. 39,52,820/-. V. Deleted addition of Rs. 66,58,952/- on a/c of enabling assets written off. VI. Deleted addition made on account of Mine Development Expenses amounting to Rs. 1,90,50,000/-. VII. Deleted the addition on a/c of undervaluation of closing stock of ore amounting to Rs. 6,87,45,564/-. VIII. Deleted the reduction of Rs. 87,97,262/- made by the AO for the claim u/s 80IA of the Act. IX. Directed to allow donation of Rs. 1,10,52,000/- given to Nandi Foundation as an expenditure u/s 37(1) of the act in-spite of the view taken by the AO in allowing the same u/s 80G @ 50%. X. Deleted the addition of Rs. 8,55,50,700/- on ....
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.... business purposes and falling within the parameters of relevant provisions have been rightly allowed by the ld. CIT (A) by detailed order, which is relied on. 16.4 We have heard the rival contentions and perused the materials available on record. We find merit in the order of the ld. CIT (A) who has rightly allowed the above expenditure agitated by revenue qua Ground no. 7,8, and 9. This Bench of ITAT vide its order dated 03-03-2016 has allowed similar expenses by following observations. "13.5 we have heard the rival contentions and perused the material available on record. Assessee is a PSU governed by statutory as well as internal regulations for incurring the expenditure, its approval as per a hierarchical administrate frame work. On facts neither of the auditors i.e. statutory and tax auditors have indicated anything adverse in respect of staff welfare expenditure. It is also a fact that the staff welfare expenditure is incurred through various bodies in consultation with such staff unions. These facts coupled with findings of ld. CIT (A) that expenditure is genuine. Wholly for business purposed and allowed in various earlier years even after verification hav....
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..... The order of ld. CIT(A) on the issue of staff welfare expenditure is upheld, this ground no. 7 of the Revenue is dismissed." The nature of expenditure and facts and circumstance qua ground no. 7, and 9 of this year are similar. Therefore, following our decision in assessee's own case (supra) for the assessment year 2001-02, we uphold the order o the ld. CIT(A) in this behalf. Thus, Ground Nos. 7,8, and 9 of the Revenue are dismissed. 15.3 Facts and circumstances of the case being similar to earlier years and also following our own decision in the above grounds of appeal (supra), the ground no. 7,8 and 9 of the Revenue are dismissed. 11.2 Respectfully following the decision of the Co-ordinate Bench in assessee's own case(supra), the ground no. 5 of the Revenue challenging staff welfare expense u/s 40A(9) is dismissed." 4.1 Therefore, taking a consistent view, the Ground no. 1 of Revenue's appeal is dismissed." In view of the above, the ground no. 1 of the Revenue's appeal is dismissed. 3. Apropos to ground no. 2, it is stated by the Ld. Representative of the parties, that the issue is covered by the decision of the Co-ordinate Bench in Ass....
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....wability of publicity and PR expenses is dismissed." 5.2 The facts are identical and there is no change into the facts and circumstances pointed out by the Revenue. Therefore, taking a consistent view, this ground of the Revenue's appeal is dismissed." In view of the above, this Ground no. 2 of the Revenue's appeal is dismissed. 4. Apropos to ground no. 3, it is stated by the Ld. Representative of the Parties, that the issue is covered by the decision of the Co-ordinate Bench in assessee's own case. We find that the ground no. 3 is covered by the decision of this Tribunal in ITA No. 612/JU/2009,wherein the Hon'ble Tribunal decided the issue in para 6 to 6.1 as under:- " 6. Apropos to ground no. 3, it is stated by the ld. Representatives of the Parties, that the issue is covered by the decision of the Co-ordinate Bench in assessee's own case. We find that the Co-ordinate Bench in ITA No. 235/Jodhpur/2008 decided this issue in para 10.1 to 10.2 by observed as under:- " 10.1 As regards ground 4 of the Revenue regarding the allowability of depreciation on APGPCL shares, we find that the similar issue has been decided by us in assessee's own case for the....
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....e assessee company and the consideration paid over and above the net book value of the assets (i.e. the tangible assets) termed as goodwill was held eligible for depreciation on intangible asset. Similarly, in the case of MIS Bharti, the assessee-company apart from paying consideration to acquire shares of company 'S', as per terms of agreement, also had to pay specific amount to transfer to get commercial right for marketing, customer support, distribution and associate set ups; otherwise such market/customer network would not have been transferred to assessee -company by company 'S'. The amount so paid to acquire the commercial rights (and not the consideration to acquire shares) was held eligible for depreciation. 17.23 These facts, circumstances and judicial decisions lead us hold that in such type of business transactions, there are always some tangible assets and some intangibles assets which are sold and acquired and each case will have its own peculiarities in terms of dominant objective of such acquisition and a reasonable estimation of valuation of dominant intangible asset and other rights is to be arrived at. In the cases a discussed above, the value of i....
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....ctive rights. (iv) The categories of specific intangible assets referred in Section 32(I)(ii) are not of the same kind and are clearly distinct from one another. Like wise unremunerated rights need not strictly answer the description of "knowhow, patent, trademarks, licenses or franchises" but must be of similar of nature as the specified assets. In our view the assessee's claim conform to this parameter. (v) Intangible assets, like securing expedient and useful power supply obtained from APGPCL are invaluable for carrying on the business by the assessee. (vi) Acquisition of such intangible assets which are whole or part of acquisition value, therefore, correspondingly comparable to a license to carry out the existing transmission and distribution business of the transferor. In this case also APGPCL got the rights of earlier allotee in favour of the assessee. (vii) Hon'ble SC in Techno Shares and Stocks Ltd. held that intangible assets owned by the assessee and used for the business purpose which enables the assessee to access the market and has an economic and money value is a "license" or "akin to a license" which is one of the items falling in....
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....e is covered by the decision of the Co-ordinate Bench in assessee's own case. We find that the Ground no. 4 is covered by the decision of this Tribunal in ITAT No. 612/JU/2009, wherein the Hon'ble Tribunal decided the issue in para 7 to 7.1 as under:- "7. Ground no. 5, it is stated by the ld. Representatives of the Parties, that the issue is covered by the decision of the Co-ordinate Bench in assessee's own case. We find that the Co-ordinate Bench in ITA No. 235/JU/2008 has decided this issue in para 16.1 to 16.2 by observed as under:- "16.1 As regards ground 11 of the Revenue challenging claim of depreciation on assets retired from active, use we find that the similar issue has been decided by us in assessee's own case for the assessment year 2003-04 vide our order dated 11/03/2016 ( in ITA No. 537/JU/2007 - Revenue) wherein Revenue's Ground no. 11 has been dismissed by following observations. "22.2 We have heard the rival contention and perused the materials available on record. We find that Ground no. 18 of the Revenue is similar to Ground No. 15 of the Revenue for the assessment year 2002-03 and the issue in question has been decided against the Reven....
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....dismissed the special leave petition filed by the Department Against this judgment : See [2010] 328 ITR (St.)10.]" 22.8 Respectfully the decision of Hon'ble Delhi High Court in the case of CIT vs. Yamaha Motor India (P) Ltd. (supra) and the decision of ITAT Jodhpur Bench in the case of DCIT vs. Udaipur Distillery Co. Ltd. (supra), we uphold the order of the ld. CIT (A) on this issue. Thus Ground No. 15 of the Revenue is dismissed." 22.3 Facts and circumstances of the case being similar to earlier years and also following our own decision in the above ground of appeal(supra), the ground no. 18 of the Revenue is dismissed." 16.2 Respectfully following the decision of the Co-ordinate Bench in assessee's own case(supra), the Ground No. 11 of the Revenue challenging claim of depreciation on assets retired from active use is dismissed." 7.1 Therefore, this ground of the revenue's appeal is dismissed." In view of the above, the Ground no. 4 of Revenue's appeal is dismissed. 6. Apropos to Ground no. 5, it is stated by the ld. Representatives of the Parties, that the issue is covered by the decision of the Co-ordinate Bench in assessee's own c....
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....CIT vs. Bongaigaon refinery & Petrochemicals Ltd. 222 ITR 206 (Gau). National Organic Chemical Industries Ltd. vs. CIT203ITR 410(Bom). Bikaner Gypsum vs CIT, 187 ITR 39 (SC) and CITvs. Associated Cement Company Ltd. 172ITR 257 (SC). He further stated that similar issue has been considered in ITA No. 1106/JP/94 for AY 1991-92 and ITA No. 321/JP/96 for AY 1992-93 wherein the Hon'ble ITAT has dismissed the Departmental appeal and decided in various of the appellant. He further stated that after submitting the break up of the amount, no other information was required by the AO. The ld.AR furnished complete details of expenditure incurred for Ghosunda Dam. In view of the above, the ld. AR contended that the disallowance deserved to be deleted. As far as the disallowance of bad debts amounting to Rs. 4,79,519/- complete details from all the units could not be filed at the time of assessment. He further stated the claim of the appellant deserve to be allowed on the basis of audited balance sheet as the amounts are audited by the auditors appointed by C & AG. 11.3 I have considered the facts of the case and also gone through the decision of Hon'ble ITAT (supra). Respectfully fo....
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....uestion no. 1 (supra) deserves to be answered in affirmative i.e. in favour of the assessee and against the revenue. 15.3 Revenue further preferred SLP which was dismissed on 18-07-11. Copies of the Orders are referred to. 15.4 Ld. DR is heard. 15.5 We have heard the rival contentions and perused the material available on record. In view of the above legal history issue in question stands settled in favor of the assessee, consequently this ground No. 9 of Revenue is dismissed." 17.3 Respectfully following our own decision in this case for the assessment year 2001-02 (supra), the Ground No. 10 of the Revenue is dismissed." 17.3 Facts and circumstances of the case being same as earlier and also following our own decision in the above ground of appeal(supra), the ground No. 11 of the Revenue is dismissed. 13.2 Respectfully following decision of the Co-ordinate Bench is assessee's own case(supra), Ground No. 7 of the Revenue challenging Ghosunda damn expenses is dismissed." 8.2. The facts are identical and taking into consistent view, this appeal of the revenue is dismissed." In view of the above, the Ground no. 5 ....
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....he facts on record, the claim is being set aside unnecessarily which is not in conformity with judicial discipline and causing the assessee deemed harassment as proposition which requires due considerations. We find substance in the contentions of ld. Counsel for the assessee about judicial discipline. However, the issue of applicability of sec. 35E or 37(I) in earlier years has been restored back. Though sympathizing with assesses repeated difficulties however in these facts and circumstances it will be desirable that following our order for AY 2000-01, the issue is restored back to ld.CIT(A), if the expenditure is allowed by ld. AO in set aside earlier years then there will be no issue, however in case of disallowance ld. CIT(A) will be free to take a decision depending on the merits and consideration of judicial position. This ground no. 10 of the revenue is accordingly allowed for statistical purposes. 12.3 Following the decision of this Bench dated 03/03/2016 in assessee's own case for the assessment year 2001-02(supra), the issue in question is restrored back to the file of the ldj. CIT(A) with a direction to decide the issue expeditiously. This ground no. 3 of....
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....trade, all costs other than the cost of raw materials for the goods-in- process and finished products, is likely to result in a distorted picture of the true state of the business for the purpose of computing the chargeable income. Such a system may produce a comparatively lower valuation of the opening stock and the closing stock, thus showing a comparatively low difference between the two. In a period of rising turnover and rising prices, the system adopted by the assesee, as found by the Tribunal, is apt to diminish the assessment of the taxable profit of a year. The profit of one year is likely to be shifted to another years which is an incorrect method of computing profits and gains for the purpose of assessment. Each year being a self- contained unit, and the taxes of a particular year being payable with reference to the income of that year, as computed in terms of the Act, the method adopted by the assessee has been found to be such that income cannot properly be deduced therefore,. It is therefore, not only the right but the duty of the Assessing Officer to act in exercise of his statutory power, as he has done in the instant case, for determining what, in his opinion, is t....
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....ed stock, additions are essentially revenue neutrals as closing stock become opening balance of the next year and reduced the profit of the next year correspondingly. In view thereof, we see no infirmity in the order of the ld. CIT(A) which is upheld on this issue. Thus Ground no. 13 of the Revenue is dismissed." We find that the facts are not similar in that year, the issue was related to the valuation of the stocks related to spares but here is the issue is with regard to the valuation of ore, which is adopted on the basis of notional cost. In view of the judgment of the Hon'ble Supreme Court in the case of CIT Vs. British paints (supra) we find force into the contention of the revenue that the value of stock is to be adopted either on cost ore net realizable value. The assessee has to demonstrate the value so adopted by furnishing the evidences in support thereof. In the present case, the assessee has failed to discharge this requirement of law, therefore, in order to compute the correct value this issue is restored to the file of the Assessing Officer for decision afresh. The Assessing Officer is hereby directed to make on the spot enquiry for verification of the co....
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....ould be denied by proper discharge of onus. Without effective rebuttal and objective consideration assessee's beneficial claim cannot be disallowed on assumptions and intendments. It is also settled jurisprudence that while interpreting the beneficial legislations a liberal approach should be adopted. This is so as a very strict interpretation will defeat the legislative intent of encouraging captive power plants in electricity starved nation in general and power short state of Rajasthan. Provisions of Sec. 80IA of the IT Act are undoubtedly beneficial in nature, so in case of ambiguity about its interpretation a liberal approach is mandates by settled judicial precedents. The undisputed facts which emerge from the record indicate that assessee by evidence and explanation brought on record objective material to demonstrate in this cae HO and other common assets have no proximate connection which the CPP, Debari which is an industrial undertaking eligible to deduction under section 80IA. The HO and other common assets existed even prior to installation of CPP. The alleged expenses represent general corporate expenditure which can't be allocated or assigned to an independent unit eng....
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.... eligible CPP unit. b) The assessee is primarily engaged in the activities of mining and manufacturing of Zinc and lead metals. This business of the assessee is one and indivisible from CPP unit. In the absence of any direct nexus the apportionment is not mandated by the correct interpretation of sec 80IA. c) It has not been rebutted that after the commencement of CPP activity there was no increase in the HO expense relatable to employee's remuneration & benefits an Administrative expense as a whole, in comparison to the earlier year. Rather HO expenses for the year under consideration have been reduced drastically. Thus there is no reason to assume any notional increase in these expenses after the commencement of CPP Debari, Consequently, the conclusion that impugned allocation of expenses has no direct nexus with eligible CPP unit, has no basis or valid justification. d) Apropos expenses like, rates & taxes, fees to auditors, cot auditors, directors travelling, reimbursement of corporate expense as well as consultancy charges etc., such expenses were required to be incurred irrespective of the CPP Unit. e) Eligible profits of any industri....
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....e of IT vs. Strawboard Manufacturing Co Ltd. {(1989) 177 ITR 43} in the context of deduction under section 80E, Hon'ble Supreme Court held that: "The provision for rebate has been made for the purpose of encouraging the setting up of new industries. It is necessary to remember the when a provision is made in the context of a law providing for concessional rate of tax for the purpose of encouraging an industrial activity, a liberal construction should be put upon the language of the statute. In our view, the controversy in question stands squarely covered by the case of Zandu Pharmaceuticals Works Ltd. (supra) in favor of the assesee. In this case assessee incurred expenditure for the R & D work in the HO and there were independent manufacturing units. Assessee claimed deduction u/s 80IA without allocating any proportionate expenses of HO Ld. AO adopted the same course as in the case of this assessee. It was held that the HO was maintained for the overall benefit of the manufacturing units only and HO was not a profit earning centre; it had no income other than the manufacturing units. Therefore, R& D expense incurred for the development of new drugs were assumed t....
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....n is beyond the scope of section 37(1) of the Act. 10.1 On the contrary, ld. Counsel for the assessee supported the orders of the ld. CIT(A) and submitted that the issue was decided by this Tribunal in ITA No. 235/JU/2008, pertaining to the assessment year 2004-05. 10.2 We have heard the rival contentions, perused the material available on record and gone through the order of the authorities below. Ld. Counsel for the assessee submitted that the issue is covered in favour of the assessee in ITA No. 235/JU/2008 pertaining to the assessment year 2004-05. The contention of the ld. Counsel for the assessee is that this amount is allowable u/s 37(1) if the Act, as the same has been incurred for the purpose of business. The amount was spent under the mid- day-meal scheme of the Rajasthan in the adjacent area of the assessee's mine. Ld. CIT(A) allowed the same. We have given our thoughtful consideration to the rival contentions of the parties. We do not see any merit into the contention of the ld. Counsel for the assessee that the donation of Nandi foundation for providing mid- day-meal under the Government of Rajasthan Scheme, is allowable as business expenditure. Section 37(1) ope....
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....he Assessing Officer was not justified in making the additions. He submitted that purpose test as laid by Hon'ble Apex Court if applied on the facts of the present case in that event, there would be not any iota of doubt that waiver of electricity duty is capital in nature. 11.2. We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) deleted the addition, by relying upon the judgment of the Special Bench of this Tribunal rendered in the case of DCIT vs. Reliance Industries Ltd. Ld. CIT (A) decided the issue in para 47 to 50 as under:- "Decision I have considered the facts of the case and submissions of the ld. A/R and have gone through the original notification dated 28/07/2003 issued by the govt. of Rajasthan, Finance (Tax Division) Department. The important/relevant features for the purpose of deciding the issue are as under:- i) The notification starts with the "Heading Rajasthan Investment Promotion Policy2003". With a view to provide investors an attractive opportunity to invest in the State of Rajasthan, the following scheme is introduced in the state. ....
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....Provided that the new project having a total new investment as per column No. 2 of the table given below, shall be exempted from Electricity Duty, on self generated energy in respect of new investment in CPP for 7 years, to the extent a mentioned in Column No. 3 of the table. S.No. Total New Investments Exemption of Electricity Duty on self generated Energy 1 From Rs. 100 crore upto Rs. 200 crore 60% 2 From Rs. 200 crore upto Rs. 400 crore 75% 3 Rs. 400 crore or more 100% 48. It is a fact that the appellant had installed a CPP at Chittorgarh LZS, Chanderia during assessment year 2005-06. The company generated 83.0507 crore unit therefrom. In view of the above notification, the electricity duty was waived to the appellant extent of Rs. 8,55,50,700/-. Had there been no such waiver, the appellant would have claimed the payment of electricity duty as revenue expenditure. Further the appellant itself has routed the same through P&L account as revenue item. As per the decision cited by AO in the case of Rajaram Maize Product by the Hon'ble Supreme Court was delivered on 23/7/2001 that the power subsidy received by the respondent was ....
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....clear. If further laid down that the scheme shall be applicable to all new investments and investments made by existing units and enterprises for modernization/expansion/diversification subject to the condition that such units shall commence commercial production/operation owing to such investment during the operative period of the scheme. The scheme is operative w.e.f. 1-7-2003 and was remained in force upto 31-03-2008. Initially the exemption in clause 8 of the scheme was 50% of the electricity duty for seven years in addition to the subsidy available under clause 7 of this scheme but the appellant has not claimed any deduction mentioned in clause 7. By amendment order dated 28-03-2005 of Govt. of Rajasthan, the Finance Department (Tax Division), the scheme has been amended to the extent that the emption would be available to 100% if the total new investment is Rs. 400 crore or more in CPP. The appellant has established the CPP in 2005-06 for the first time in Chanderia Smelter Unit. The capital investment is also more than Rs. 400 crore. The CPP is established within the period from 1-7-2003 to 31-3-2008. The commercial production has also commenced in the same fi....
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....e resolved if we apply the test laid down in the judgment of this Court in the case of Sahney Steel & Press Works Ltd. (supra). In that case, on behalf of the assessee, it was contended that the subsidy given was up to 10% of the capital investment calculated on the basis of the quantum of investment in capital and, therefore, receipt of such subsidy was on capital account and not on revenue account. It was also urged in that case that subsidy granted on the basis of refund of sales tax on raw material, machinery and finished goods were also of capital nature as the object of granting refund of sale tax was that the assessee could set up new business or expand his existing business. The contention of the assessee in that case was dismissed by the Tribunal and, therefore, the assessee had come to this court by way of a special leave petition. It was held by this Court on the facts of that case and on the basis of the analyses of the scheme therein that the subsidy given was on revenue account because it was given by way of assistance in carrying on of trade or business. On the facts of that case, it was held that the subsidy given was to meet recurring expenses. It was not for acqui....
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.... payment were made several times for some years. The Dock Co. had undertaken the work of extension of its docks. The extended dock was for relieving the unemployment. The main purpose was relief from unemployment. Therefore, the House of Lords held that the financial assistance given to the company for dock extension cannot be regarded as a trade receipt. It was found by the House of Lords that the assistance had nothing to do with the trading of the company because the work undertaken was dock extension. According to the House of Lords, the assistance in the form of a grant was made by the Government with the object that by its use men might be kept in employment and, therefore, its receipts was capital in nature. The importance of the judgment lies in the fact that the company had applied for financial assistance to the Unemployment Grants Committee. The Committee gave financial assistance from time to time as the work progressed and the payments were equivalent to half the interest for two years on approved expenditure met out of loans. Even though the payment was equivalent to half the interest amount payable on the loan (interest subsidy) still the House of Lords held that mon....
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....year 2003-04. This loan was taken for expansion of Co's project as CLZS, Chanderia, Rampura Agucha Mines and CPP at Chanderia for expansion of the company for capital investment. The company has completed the expansion during the assessment year 2006-07 and capitalized the interest payment and other incidental charges. While finalizing the balance sheet as on 31/03/2006, the appellant had devalued the quantum of principle loans amount based on exchange rate prevailing on that date and increase of liability of such amount there from had been charged to the P&L account as revenue expenditure under the head exchange rate of loan. The Assessing Officer observed that the assessee had obtained loan during the financial year 2003-04 and the same was out outstanding as liability on 31/03/2006. It implied that there was no re-payment of loan till the assessment year 2006-07. The Assessing Officer observed that the assessee provided an amount of Rs. 11.15 crore by devaluing the quantum of principles of loan based on exchange rate on close of the year. It was observed that the such loss was a notional devaluation loss just by passing a book entry. The assessee had neither incurred any expe....
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.... a new character of circulating capital. The treatment was in consonance with accepted accounting principles and accounting standards. As such the loss on account of exchange difference is a revenue charge and the same is allowable u/s 37(1) of the Act. 12.2 We have heard the rival contentions, Ld. CIT(DR) strongly urged that the ratio of the judgment of the Hon'ble Supreme Court in the case of Woodword Governor (supra) is not applicable on the facts of the present case. However, we find merit into the contention of the Ld. Counsel for the assessee that after capitalization, the ECB had changed its nature and assumed character of circulating capital. Such treatment is in consonance with the accepting accounting principles and accounting standards. As such loss on account of exchange difference is a revenue charge and is allowable deduction under section 37(1) of the Act. In view of these un rebutted facts in our considered view, the ratio of the judgment of the Hon'ble Apex Court rendered in the case of CIT vs. Woodward Governor (supra) is squarely applicable on the present case. The Hon'ble Court has held as under:- 29. To answer the controversy, we need to analyse sec....
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.... to year. The proposed legal provision in the matter is intended to be framed on this basis." (emphasis supplied) 32. One more aspect needs to be mentioned. Section 43(1) defines actual cost for the purpose of grant of depreciation, etc. to mean "the actual cost of the assets to the assessee". Till the insertion of the unamended section 43A there was no provision in the Income-tax Act for adjustment of the actual cost which was fixed once an for all, at the time of acquisition of the asset. Accordingly, no adjustment could be made in the actual cost of the assets for purposes of grant of depreciation for any increase/decrease of liability subsequently arising due to exchange fluctuation. Consequently, section 43A was introduced in the Act by the Finance Act, 1967, with effect from April 1, 1967, in the above terms to provide for adjustment in the actual cost of assets pursuant to change in the foreign currency exchange rates. As a consequence of the insertion of the said section, if became possible to adjust the increase/decrease in liability relating to acquisition of capital assets on account of exchange rate fluctuation, in the actual cost of the assets acquired in fore....
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...., we are of the view that the amendment of section 43A by the Finance Act, 2002, with effect from April 1, 2003, is amendatory and not clarificatory. The amendment is in complete substitution of the section as it existed prior thereto. Under the unamended section 43A adjustment to the actual cost took place on the happening of change in the rate of exchange whereas under the amended section 43A adjustment in the actual cost is made on cash basis. This is indicated by the words "at the time of making payment". In other words, under the unamended section 43A, "actual payment" was not a condition precedent for making necessary adjustment in the carrying cost of the fixed asset acquired in foreign currency however, under the amended section 43A with effect from April 1, 2003, such actual payment of the decreased enhanced liability is made a condition precedent for making adjustment in the carrying amount of the fixed asset. This indicates a complete structural change brought about in section 43A, vide the Finance Act, 2002. Therefore, the amended section is amendatory and not clarificatory in nature. Conclusion: 35. For the reason given hereinabove, we find no infirmi....
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.... perused the material available on record and gone through the order of the authorities below. Ld. Counsel for the assessee submitted that the issue is covered in favour of the assessee in ITA No. 235/JU/2008 pertaining to the assessment year 2004-05. The contention of the ld. Counsel for the assessee is that this amount is allowable u/s 37(1) if the Act, as the same has been incurred for the purpose of business. The amount was spent under the mid-day-meal scheme of the Rajasthan in the adjacent area of the assessee's mine. Ld. CIT(A) allowed the same. We have given our thoughtful consideration to the rival contentions of the parties. We do not see any merit into the contention of the ld. Counsel for the assessee that the donation of Nandi foundation for providing mid-day-meal under the Government of Rajasthan, the Scheme is allowable as business expenditure. Section 37(1) operates in a different field. In our view there has to be direct nexus between the amounts spent and the business of the assessee. In the present case, there is no evidence suggesting that the expenditure is laid out or expended wholly and exclusively for the purpose of business of the assessee. Therefore, this ....