TaxTMI 
TaxTMI 
2018 (2) TMI 1342
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....assessment year 2011-12 also except with variance in figures. 2. Disallowance of leave encashment: Ground Nos. 1 and 2 of Assessee Appeal for assessment year 2010-11 Ground No. 1 of Assessee Appeal for assessment year 2011-12 The brief facts of this issue is that the assessee is a company engaged in manufacturing and selling of cables, capacitors and optic fibers. The ld AO observed that the assessee made a provision for leave encashment for Rs. 1,04,69,715/- and Rs. 34,12,071/- for the Asst Years 2010-11 & 2011-12 respectively and claimed the same as deduction by following the decision of the Hon'ble Jurisdictional High Court in the case of Exide Industries Ltd reported in 292 ITR 470 (Cal). The ld AO sought to disallow the same in terms of section 43B(f) of the Act as the same was not paid within the due date of filing the return of income. The ld AO observed that the said decision has been stayed by the Hon'ble Supreme Court and accordingly disallowed the provision for leave encashment on the ground that the same is allowable only on payment basis in terms of section 43B(f) of the Act, which was upheld by the ld CITA. Aggrieved, the assessee is in appeal before us on....
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....ecover that amount in case Civil Appeal of the department is allowed. We further make it clear that the assessee would, during the pendency of this Civil Appeal , pay tax as if Section 43B(f) is on the statute book but at the same time it would be entitled to make a claim in its returns." Hence from the aforesaid Supreme Court judgement, it could be inferred that the Hon'ble Supreme Court had not stayed the judgement of the Calcutta High Court during Leave proceedings. But the Hon'ble Supreme Court had only passed an interim order on the impugned issue. Hence we deem it fit and appropriate , in the interest of justice and fair play, to remand this issue to the file of the ld AO to pass orders based on the outcome of the main appeal on merits by the Hon'ble Supreme Court as stated supra. 2.2. With regard to ground no. 2 raised by the assessee for assessment year 2010-11 seeking deduction for actual payment made in the sum of Rs. 33,64,322/- on account of leave liability, the same also would be decided by the ld. AO based on the final outcome of the decision of Hon'ble Supreme Court in the case of Exide Industries referred to supra. Accordingly, ground no. 1&2 for asse....
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....&1906/Kol/2013 dated 27.02.2015 wherein it was held that: "21. We have heard the rival submissions and gone through facts and circumstances of the case. We find that the assessee has claimed entry tax amounting to Rs. 1,01,09,282/- as deduction without taking it through P & L Account. The AO made addition of this amount. Aggrieved, assessee preferred appeal before Ld. CIT(A) claiming the entry tax as exempt being capital receipt similar to the scheme of Govt. of Madhya Pradesh being Industrial Investment Promotion Assistance. But Ld. CIT(A) confirmed the action of the AO by observing in para 72 to 76 as under: "72. The provisions of section 43B are very clear and it starts with a non obstante clause stating that notwithstanding anything contained in an)' other provision of this Act certain deductions are TO be only on actual payment. Any sum payable by The assessee by way of tax, duty, cess or fee, by whatever name called. under an)' law for the time being in force shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according 10 the method of accounting regularly employed by him) only in c....
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.... 75. Similarly, the Hon'ble Orissa High Court has held in the case of Orissa Rural Housing Development Corpn. Ltd. v Assistant Commissioner of income-Tax reported in [2012] 17 taxmann.com 186 (Orissa): 20 Taxmann 673 has held in para 19 that National Housing Bank Act, 1987 does not overrides the Income Tax Act, 1961 and further observed as follows:- "19. Question No. (h) is as to whether the National Housing Bank Act, 1987 overrides the Income Tax Act, 1961.? Though both the Acts are Central ACT they are occupying different fields. The purpose of enacting both the Acts are different. Income Tax Act has been enacted to levy tax on income which is covered under Entry No.82 of List-I- Union List of Seventh Schedule 10 the Constitution. The National Housing Bank Act, 1987 has been enacted to promote housing finance institutions both at local and regional levels 10 provide financial and other support to such institutions which are covered under Entryry-45 of List-I- Union List of Seventh Schedule to the Constitution of India. There is no such provision in the National Housing Bank ACT [ha! it will override the Income Tax Act. Since the impugned orders are pa....
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....n of income. The ld. AO resorted to make the disallowance by applying Rule 8D of the Rules and made disallowance under Second and third limb of the said Rule in the sum of Rs. 92,10,000/- for assessment year 2010-11 and Rs. 1,05,32,000/- for assessment year 2011-12. The assessee pleaded that it had received dividend from three companies as under: Name of Company Dividend received Assessment year 2010-11 Assessment year 2011-12 Birla Corporation Ltd. 20,77,110/- 17,80,380/- Industry House Ltd. 9,000/- 9,000/- Baroda Agents & Trading Co. Pvt. Ltd. 80,000/- 80,000/- Total dividend received 21,66,110/- Rs. 18,69,380/- The Ld. CIT(A) observed that the assessee had sufficient own funds and no part of borrowed funds were utilized for making investments and accordingly deleted the disallowance made under Rule 8D(2)(ii) of the Rules for both assessment years. In respect of disallowance made under the third limb of Rule 8D(2) of the Rules, the Ld. CIT(A) by placing reliance on the decision of this tribunal in REI Agro Ltd. reported in 144 ITD 141 held that only dividend bearing investments should be considered for working out the d....
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....7 out of its own funds. During the financial year 2009-10 relevant to assessment year 2010-11, the assessee invested Rs. 22.41 crores in the joint venture company named Birla Furukawa Fiber Optics Ltd. The material facts in this behalf are that the optic fiber business of the assessee was technology driven and heavily dependent on technology which required constant upgradation in keeping with the latest developments. The assessee was not able to upgrade its optic fiber manufacturing facility with the latest technology and as such entered into joint venture agreement with Furukawa Electronic Company Ltd., Japan on 11.04.2009 which resulted in formation of new joint venture company, Birla Furukawa Fiber Optics Ltd. The assessee sold the entire plant and machinery of its optic fiber unit to the new joint venture company in two phases during the months of February, 2010 and October, 2010. The proceeds of such sale in February, 2010 amounting to Rs. 13.48 crores were used for acquiring shares in the new joint venture company. The remaining amount of Rs. 8.93 crores was invested by the assessee in the joint venture company out of its own funds. In this regard, we find that the retained e....
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....uring the financial year 2008-09 purchased and installed new plant and machinery for its manufacturing business. Some of such plant and machinery were put to use for a period of less than 180 days during the said financial year and in respect of such plant and machinery, the assessee claimed only 50% of additional depreciation u/s 32(1)(iia) of the Act in view of the second proviso to section 32(1) of the Act. Now during the year under appeal i.e. assessment year 2010-11, the assessee claimed further depreciation (i.e. balance 10% which is 50% of 20%) on this plant and machinery on the plea that it is entitled to get the balance depreciation this year also. The Ld. AO held that after allowing a portion of additional depreciation in assessment year 2009- 10, written down value has been worked out by the ld. AO and the same has been brought forward during the year under appeal as opening written down value, on which regular depreciation would be applicable to the assessee at the rates prescribed for plant and machinery. With these observations, he disallowed the remaining portion of unclaimed additional depreciation pertaining to assessment year 2009-10 (i.e. balance 10%) in the asse....
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....aimed 50% additional depreciation u/s. 32(1)(iia) of the Act in view of the second proviso to section 32(1)(ii) of the Act. Further, the balance 50% of additional depreciation on such plant and machinery has been claimed by the assessee company during the year under consideration i.e. the FY 2006- 07 relevant to this assessment year 2007-08. A bare reading of clause (iia) of section 32(1) of the Act w.e.f. the AY 2006-07, provides for allowance of additional depreciation equal to 20% of actual cost of new plant and machinery acquired and installed after March, 31st 2005 by an assessee engaged in the business of manufacture or production of any article or thing. Such additional depreciation is to be allowed as deduction u/s. 32(1)(iia) of the Act but second proviso to section 32(1)(ii) restricts the allowance of depreciation at 50%, if the plant and machinery is acquired during the previous year is put to use for a period of less than 180 days in that previous year. The second proviso specifically makes a reference to an asset referred to in clause (iia) of the said section 32(1) of the Act. And it is because of the second proviso assessee claimed only 50% additional depreciation fo....