AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 848
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....02-03 3. Ground no.1, relates to disallowance of pooja / function expenses of Rs. 17,17,792. 4. Brief facts are, during the assessment proceedings, the Assessing Officer noticing that the assessee has claimed the aforesaid expenditure called upon the assessee to furnish the details of expenses. After examining the details furnished by the assessee, he found that such expenditure was incurred at various locations for purchase of flowers, sweets, etc., during Diwali / Dussehra. The Assessing Officer referring to disallowance made of similar expenditure in earlier assessment years, disallowed the expenditure claimed. 5. The learned Commissioner (Appeals) also upheld the disallowance accepting the reasoning of the Assessing Officer. 6. The learned Authorised Representative submitted, beginning from the assessment year 1988-89 to assessment year 2001-02 such claim of expenditure made by the assessee has been allowed by the Tribunal. In this context, he drew our attention to the Tribunal's order for different assessment years placed in the paper book. He submitted, the Revenue's appeal on identical issue in assessment year 1997-98 and 1989-90, were not admitted by the Hon'....
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....see by the above decision of the Tribunal. In the assessment year 89-90, the Tribunal followed the temple inauguration expenses except disallowance of Rs. 3.00 lac out of lavish travelling expenses of Rs. 3.8 lacs on travelling and food. The present year expenditure seems to be normal day to day expenses on Pooja for running the temple in the vicinity of the plant. Accordingly, after considering the rival submissions, facts of the issue as stated above, and Tribunal's decision referred above, this ground is allowed in favour of the assessee. The addition so sustained by the CIT(A) is deleted." And again in AY 1989-90 the similar issue was raised wherein the expenses of Rs. 8,33,943/- on account of Pooja Expenses was claimed and the co-ordinate bench of this Tribunal in its order dated 20.12.2002 partially allowed the Pooja Expenses and granted a relief of Rs. 4,32,507/-. The department has filed appeal against the order of ITAT in AY 1989-90 but same has not been admitted in the Hon'ble High Court. Further the revenue has filed further appeal against the order of ITAT in respect of AY 1988-89 but no ground has been taken against allowing of Pooja Expenses. In view....
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....ssment year 2001-02. In the latest order for assessment year 2001-02, the Tribunal while deciding the issue in ITA no.3360/Mum./2005, dated 18th January 2017, has followed its earlier order and allowed the deduction claimed by the assessee holding as under:- "4. Ground No.2 and 3, taken by the assessee read as under : 2(a) That on the facts and in the circumstances of the case, the CIT (A) was not justified in confirming the disallowance of consultancy charges amounting to Rs. 16,00,000/- by holding that the said expenditure is capital in nature; 2(b) That on the facts and in the circumstances of the case and without prejudice to Ground No.2(a), taken hereinabove, having held that the impugned expenditure is capital in nature, the CIT (A) erred in not allowing depreciation on the same. 3(a) That on the facts and in the circumstances of the case, the CIT (A) was not justified in confirming the disallowance of charges for service amounting Rs. 1,93,000/- by holding that the expenditure is capital in nature. 2(b) That on the facts and in the circumstances of the case and without prejudice to Ground No.2(a), taken hereinabove, having held th....
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.... in the year under appeal are one and the same. We find that the contention of the ld. Counsel of the assessee is correct. Respectfully following the aforesaid Tribunal's order and for the reasons given therein, we hold that the impugned expenditure is not directly related to the creation of new capital asset and is in the nature of revenue expenditure. No interference is, therefore, called for in the order of the CIT(A) on this issue. The ld. Counsel of the assessee stated at the bar that no depreciation was allowed by the AO when the impugned expenditure was treated as capital expenditure. In view of this fact, no order with regard to withdrawal of depreciation is required to be passed. The appeal of the revenue fails on this issue." Hence keeping in view the above observation of co-ordinate bench, as these ground i.e. ground no.2 & 3 are also covered in favour of assessee, hence both the Grounds are allowed in favour of assessee." 6. Respectfully following the decisions of the coordinate bench as facts being identical we allow the ground no.2 and 3 of this appeal in favour of the assessee." 16. Respectfully following the consistent view of the Tribunal in as....
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....e the Tribunal in assessee's own case in ITA No.3359/Mum/2005 (AY-2000-01) and the co-ordinate Bench of the Tribunal has decided the issue in favour of assessee vide order dated 21.10.2016, para 31 of the said order which is reproduced below: "31. The ground no.4 is related with the disallowance of ESOP Expenses of Rs. 2,44,57,408/-. We have seen that this ground of appeal is squarely covered in favour of assessee by the decision of Biocon Ltd. vs. DCIT(supra). The ld. DR for the Revenue has fairly conceded that the factual as well as legal position. Hence, this ground of appeal is allowed in favour of assessee." 9. Respectfully following the decision of the Tribunal in assessee's case (supra), we decide this issue in favour of the assessee. Accordingly, ground no.4 taken by the assessee stands allowed." 25. Respectfully following the consistent view of the Co-ordinate Bench in assessee's own case, we allow assessee's claim. This ground is allowed. 26. In ground no.5, the assessee has challenged disallowance of Rs. 2,00,000 under section 14A of the Act. 27. During the assessment proceedings, the Assessing Officer noticing that the assessee has earned exempt income....
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....he also confirmed the view of the Assessing Officer. 34. The learned Authorised Representative reiterating the stand taken before the Departmental Authorities submitted that the interest income and truck hire charges should be treated as business income. However, he fairly submitted that while deciding identical issue in assessee's own case in preceding assessment year the Tribunal has restored the issue relating to truck hire charges and interest income to the file of the Assessing Officer for deciding afresh. Therefore, he submitted, similar decision may be taken in the impugned assessment year as well. 35. The learned Departmental Representative agreed with the aforesaid submission of the learned Authorised Representative. 36. Having considered rival submissions, we find that while deciding assessee's appeal in assessment year 1999-2000, in ITA no.2486/ Mum./2005, dated 30th June 2016, the Tribunal has restored the issue to the Assessing Officer for deciding afresh keeping in view the directions of the Tribunal on the issue. Same view was again expressed by the Tribunal while deciding the issue in assessee's own case for assessment year 2001-02. Observation of the Tribu....
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....that the said income were to be assessed under the head "Income from other Sources", the Ld. CIT(A), ought to have allowed the actual expenditure incurred to earn the aforesaid income, instead of considering Rs. 2,000/- on adhoc basis, as expenditure incurred to earn the said income." 15. The assessee has wrongly included income from truck hire charges under the head "Income from other Sources". 16. With respect to taxing interest income and income from Bill Discounting under the head "Income from other Sources" instead of business income, the Ld. Counsel for the assessee Shri Daya Shankar submitted that the income represents earnings by temporary deployment of the surplus and unutilized funds, out of money borrowed for the purpose of business. The rate of interest income invariably lower than the rate of interest paid in the money borrowed and hence the net income is either Nil or negative. 17. The ld. Counsel further submitted that from the Audited accounts (Paper book page 8 at page 10) read with page 13, it could be seen that the impugned interest income is merely part recoupment of interest expenditure debited to P&L a/c. The Ld. Counsel further subm....
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....sment proceedings, the Assessing Officer held that amount paid towards lease premium is a capital expenditure, hence, not allowable under section 37(1) of the Act. 40. The learned Commissioner (Appeals) also upheld the disallowance while deciding the issue in appeal. 41. The learned Authorised Representative fairly submitted that in the assessment year 2001-02 the issue has been decided against the assessee by the Tribunal following the Special Bench decision of the Tribunal, Mumbai Bench, in JCIT v/s Mukund Limited, [2007] 106 ITD 231 (Mum.)(SB). 42. The learned Departmental Representative agreed with the aforesaid submissions of the learned Authorised Representative. 43. Having considered rival submissions, we find that identical issue came up for consideration before the Tribunal in assessee's own case for assessment year 1999-2000 in ITA no.2486/Mum./2005, dated 30th May 2016. The Co-ordinate Bench following the Special Bench decision of the Tribunal, Mumbai Bench, cited supra, upheld the disallowance made by the Assessing Officer. The same view was expressed again by the Co-ordinate Bench while deciding assessee's appeal for assessment year 2001-02 in ITA no.3360/M....
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....ered against the assessee as referred above, hence, keeping in view the order of ITAT Mumbai JCIT vs. Mukund Ltd. (2007) 106 ITD 231 (Mum)(SB), this ground of appeal is dismissed." 25. Since the Tribunal has decided similar issue against the assessee and we therefore respectfully following the earlier findings of the Tribunal, dismiss the appeal of the assessee on this ground." 44. Respectfully following the consistent view of the Co-ordinate Bench, we dismiss the ground raised by the assessee. 45. Ground no.8, is not pressed, hence, dismissed. 46. In ground no.9, assessee has challenged disallowance of un-utilized MODVAT credit under the provisions of section 145A of the Act. 47. Brief facts are, during the assessment proceedings, the Assessing Officer while going through the tax audit report filed by the assessee noticed that the auditor has certified that net effect of deviation from the valuation prescribed under section 145A of the Act, is revenue neutral. The Assessing Officer, however, rejecting the claim of the assessee and following the adjustment / disallowance made on account of unutilized MODVAT credit in assessment year 2001-02, added it to the clo....
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....f section 43B since the appellant had paid excise duty payable on closing stock of cement as on last day of accounting year before filing of return of income for AY 2001-02 by adjusting unutilized MODVAT credit and necessary proofs for payment of excise duty are on the record of assessing officer" 27. The ld.AR at the time of hearing of this issue brought to our notice that an identical issue had been raised by the assessee in ITA No.2486/Mum/2005(AY-1999-2000) and the same has been decided by the Co-ordinate Bench of the Tribunal in favour of the assessee vide order dated 30.6.2016 for which the ld.DR neither objected nor brought any material before us to compel us to take a different view than the view so taken by the Tribunal on the issue. The Tribunal while deciding the issue in favour of the assessee has observed and held as under : "10. Ground No. 7 for our consideration is disallowance of unutilized MODVAT credit as on last date of accounting year as adjustment u/s. 145A of the Act of Rs. 1,69,49,695/-. AR of the assessee has argued that assessee in the revised return of income had adjusted the net profit for the year to the provision of section 145A which ....
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....ng stock, net of MODVAT credit such credit should not be added to the closing stock in DCIT vs. M/s Axis Electrical Components (I) (P) Ltd. it was held that there is no impact on profit account of adjustment of MODVAT credit on an application of section 145A.From the above observation, the MODVAT credit of Excise duty is not includable as unutilized MODVAT credit on the last date of accounting year, hence, this ground is also allowed in favour of assessee." After going through the findings of the Tribunal, we find that the facts of the present case and that of relied upon by the assessee on the decision of Tribunal in assessee's own case are same, therefore, we respectfully following the decision of the Tribunal decide this ground in favour of the assessee." 51. Respectfully following the consistent view of the Co-ordinate Bench in assessee's own case as discussed above, we delete the addition made. This ground is allowed. 52. In ground no.10, assessee has challenged exclusion of deduction under section 10HHC of the Act while computing book profit under section 115JB of the Act. 53. Brief facts are, during the assessment proceedings, the Assessing Officer noticing....
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....30.6.2016. Therefore, the ld.AR prayed that by following the decision of Tribunal in assessee's own case, this issue be decided in favour of the assessee. 30. After going through the decision relied upon by the assessee and facts of the issue, we find that the issue stands covered in favour of the assessee by the decision of the Tribunal in assessee's own case (supra) following the decision in earlier years and this also following in subsequent years. For the sake of convenience we reproduce relevant findings of the Tribunal order as under: "12. Ground No. 9 for our consideration is non-allowance of exclusion of deduction u/s. 80HHC computed on profit of the business as per account prepared under Companies Act, in computing book profit u/s. 115JA of the Act. The assessee claimed exclusion of deduction u/s. 80HHE in computing book profit u/s. 115JA. The AO while making assessment followed the order of earlier years and denied the claim to the assessee. CIT(A) confirmed the order of AO on similar lines. AR of the assessee argued that for the year 1997-98 similar claim was denied by the revenue authorities but in the appeal before the ITAT for AY 1997-98 in ITA No. 1....
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.... Co-ordinate Bench in assessee's own case, we allow the claim of the assessee. Ground raised is allowed. 58. In ground no.11, the assessee has challenged non-exclusion of profit on sale of investment while computing book profit under section 115JB of the Act. 59. At the outset, the learned Authorised Representative fairly conceded that the issue has to be decided against the assessee in view of the decision of the Tribunal while deciding identical issue in the preceding assessment year. 60. The learned Departmental Representative agreed with the aforesaid submissions of the learned Authorised Representative. 61. We have considered rival submissions and perused materials on record. As could be seen, while deciding identical issue in assessee's own case for assessment year 1999-2000, in ITA no.2486/Mum./2005 the Tribunal has decided the issue against the assessee. The same view was reiterated by the Co-ordinate Bench while deciding assessee's appeal on the issue in assessment year 2001-02, vide ITA no.3360/Mum./2005. Relevant observation of the Bench in this regard is as under :- "31. Ground of appeal no.12 taken by the assessee is as under : "12. That o....
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....ial Bench decision of the Tribunal, Mumbai Bench, was subsequently confirmed by the Hon'ble Jurisdictional High Court in CIT v/s Reliance Industries Ltd., [2011] 339 ITR 632 (Bom.). He submitted, the Hon'ble Supreme Court in CIT v/s Ponni Sugars and Chemicals Ltd., [2008] 306 ITR 392 (SC) and CIT v/s Chaphalkar Brothers, [2017] 88 taxmann.com 178 have also expressed similar view. He submitted, the aforesaid decisions of the Hon'ble Jurisdictional High Court and Hon'ble Supreme Court were delivered not only after the filing of the return of income by the assessee, but, much after the order passed by the Assessing Officer and the learned Commissioner (Appeals). The learned Authorised Representative submitted, on the basis of ratio laid down in the aforesaid decisions the assessee has raised the additional grounds which are purely legal grounds and can be decided on the basis of facts already available on record. In support of such contention, the learned Authorised Representative relied upon the following decisions:- i) Everest Industries Ltd. v/s ACIT, ITA no.1968/Mum./2005, dated 27.10.2008; ii) Aditya Birla Nuvo Ltd. v/s ACIT, [2012] 13 ITR 128 (M....
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....t as capital in nature either in the return of income filed for the impugned assessment year nor in course of proceedings before the Departmental Authorities. In fact, the assessee itself has treated the Sales Tax incentive received by it as revenue in nature by including it in the sales as reflected in the books of account and audited financial statements. It is only at the second appellate stage before the Tribunal the assessee has claimed the Sales Tax incentives received by it as capital in nature by raising the additional grounds. Thus, the first issue which is to be decided is, whether the additional grounds raised by the assessee at this stage are to be admitted or not. It is the contention of the assessee before us that on the basis of ratio laid down in certain judicial precedents, wherein, it is held that Sales Tax incentive received is capital in nature, the assessee has raised the additional ground. On a careful analysis of the decisions relied upon by the learned Authorised Representative in support of admission of additional ground, we find that if the basic facts relating to the issues raised in the additional grounds are available on record and it does not require i....
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.... material on record and also keeping in view the fact that the Department should be given an fair and reasonable opportunity to examine assessee's claim, we are inclined to restore the issues raised in the additional grounds to the file of the Assessing Officer for fresh adjudication keeping in view the relevant Sales Tax incentive schemes and the decisions relied upon by the assessee. Needless to say, the Assessing Officer must afford reasonable opportunity of being heard to the assessee before deciding the issues through a speaking order. Both the additional grounds are allowed for statistical purposes. 68. In the result, assessee's appeal is partly allowed. C.O. no.248/Mum./2017 - By Revenue 69. There is an inordinate delay of 4,287 days in filing the cross objection. Seeking condonation of delay, it is submitted that after receiving the additional ground raised by the assessee, the Department has proposed to file the cross-objection. Hence, the delay of 106 days in filing the cross-objection may be condoned. As per the provisions of section 253(4) of the Act, a cross-objection has to be filed within 30 days of the receipt of notice of filing of appeal against the....
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....disallowance was made against the assessee in AY 1988-89, AY 1989-90, AY 1990-91, 1991-92 & 1992-93 and the assessee carried the matter to ITAT and the same was allowed by the co-ordinate bench of ITAT, Mumbai and the appeal filed by the Revenue has not been admitted by the Hon'ble High Court for the AY 1988-89 and for AY 1989-90 and further SLP filed before the Hon'ble Apex Court for AY 1988-89 as since we dismissed vide order dated 17.07.2009, however, the department has not filed appeal before the Hon'ble High Court for AY 1990-91, AY 1991-92 and AY 1993-94. We have seen the order of ITA No. 3733/Mu/10096 for AY 1988-89, the co-ordinate bench of this Tribunal while dealing with identical ground has held as under: "The sixth ground is regarding disallowance of Rs. 93,220/- being village welfare expenses. This expenditure relates to expenditure towards general village welfare in the vicinity of the plant. We find that this issue also covered by the decision of ITAT in ITA No. 2690/M/1993 vide its order dated 20.12.2002 in assessee's own case for assessment year 89-90. Accordingly following above order, this ground is decided in favour of assessee. The appeal of the assess....
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....on that the impugned expenses are allowable as deduction stands fortified by the aforesaid decision of Mumbai Tribunal. The appeal of the assessee, therefore, succeeds on this issue. The order of the CIT(A) is set aside on this issue and AO is directed to delete the impugned addition". Further, we have noticed that the similar grounds of appeal were allowed in favour of assessee for AY 1990-91 vide ITA No. 2419/Mum/1994, for AY 1991-92 vide ITA No. 4034/Mum/1996 and for AY 1992-93 vide ITA No. 4035/Mum/1996, for AY 1993-94 vide ITA No. 1577/Mum/1999 and for AY 1994-95 vide MA No.218/Mum/2006. Hence, keeping in view the principle of consistency and following the order of Co-ordinate Bench and Hon'ble High Court of Bombay, this ground of appeal raised by the Revenue is dismissed. 40. In view of the above , we respectfully following the decision of the Tribunal in assessee's own case, dismiss ground no.1 taken by the revenue." 74. Respectfully following the consistent view of the Co-ordinate Bench in assessee's own case in the preceding assessment years we dismiss the ground raised by the Revenue. 75. In ground no.2, the Revenue has challenged deletion of disal....
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....sentative relied upon the observations of the Assessing Officer. 83. The learned Authorised Representative relying upon the observations of the learned Commissioner (Appeals) submitted, against the decision of the learned Commissioner (Appeals) on identical issue in assessment year 2001-02, the Revenue has not preferred any appeal in the Tribunal. Thus, he submitted, the decision of the learned Commissioner (Appeals) should be upheld. 84. We have considered rival submissions and perused materials on record. As could be seen from the facts on record, during the assessment proceedings the assessee not only claimed that the expenditure crystallized during the impugned assessment year but also filed all supporting details. The learned Commissioner (Appeals) while deleting the addition made by the Assessing Officer has also recorded a finding of fact that the expenditure though related to preceding assessment years but they crystallized during the assessment year under consideration. The aforesaid factual finding of the learned Commissioner (Appeals) has not been controverted by the learned Departmental Representative. In view of the above, we uphold the decision of the learned Co....
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....T (1980) 124 ITR 1 (SC). . d) CIT Vs. Ananda Bazar Patrika (P) Ltd. (1990) 184 ITR 542 (cal). e) CIT vs. Berger Paints (India) Ltd. (No.s 2) (2002) 254 ITR 503 (cal). Vide para 17.3 of its order dated 20.12.2002, the Tribunal for the assessment year 89-90 in ITA No. 2690/M/93heldas under: " 17.3 We have considered the rival submissions in the light of material placed before us. It is a fact that assessee's business had started during the preceding year and it had already started extracting limestone from the mines. The impugned expenses are to be incurred on year to year basis and cannot be said to be incurred prior to commencement of business. Since the business had already commenced, the same will not be covered by the provisions of section 35(1). Further, the said expenditure was incurred for extracting raw material and not for acquiring any asset of enduring benefit or advantage. In this context, we rely on the decision of apex court in the case of Empire Jute Co. Ltd. (supra) wherein it was held that if the advantage consists merely in facilitating the assessee's trading operation, the expenditure would be on revenue account. Respectfully, f....
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....issioner (Appeals) was of the view that if the loss claimed by the assessee is to be disallowed treating it as notional, then the income offered by the assessee on account of foreign exchange gain should not also be taxed. Thereafter, following certain judicial precedents, the learned Commissioner (Appeals) deleted the disallowance made by the Assessing Officer. 94. The learned Departmental Representative relied upon the observations of the Assessing Officer. 95. Learned Authorised Representative strongly supporting the decision of the learned Commissioner (Appeals) submitted, similar disallowance made by the Assessing Officer was deleted by the learned Commissioner (Appeals) in assessment year 2001-02 also and the Tribunal has upheld such deletion. Thus, he submitted, the decision of the learned Commissioner (Appeals) should be upheld. 96. We have considered rival submissions and perused materials on record. We do not find any infirmity in the view taken by the learned Commissioner (Appeals) on the disputed issue. Undisputedly, the assessee is consistently following an accounting method as per which if there is a gain on account of fluctuation in foreign exchange rate, th....
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....t that liability has not been discharged in the year of fluctuation" Hence, keeping in view the order of Hon'ble Apex Court (supra) this ground is squarely covered in favour of assessee. Hence, this ground of appeal raised by the Revenue is dismissed." Following the decision of the coordinate bench we are inclined to dismiss ground taken by the revenue." 97. Facts being identical, respectfully following the aforesaid decision of the Co-ordinate Bench, we uphold the decision of the learned Commissioner (Appeals) by dismissing the ground raised. 98. In ground no.6, the Revenue has challenged deletion of addition made on account of disallowance of expenses claimed on power line and marine structures. 99. The learned Counsels appearing of the parties agreed before us that the issues are covered by the decisions of the Tribunal in assessee's own case for the preceding assessment years. 100. We have considered rival submissions and perused materials on record. Notably, while deciding identical issue in assessee's own case for assessment year 2001-02, the Tribunal upheld the decision of the learned Commissioner (Appeals) with the following observations:- "52.....
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....apital field, it could not be said to be an expenditure of a capital nature. As we have pointed out, while arriving at this conclusion, we are prepared to proceed on the footing that the advantage which the assessee-company got was an advantage of an enduring nature, but applying the test culled out by the Supreme Court in Empire Jute Co.'s case [1980] 124 ITR 1 , it is obvious that, in spite of the presumption, it can be held on the facts and circumstances of this case that the expenditure was not of a capital nature but was of a revenue nature. Therefore, we respectfully following the decision of the Hon'ble Supreme Court in the case of Gujarat Mineral Devp. Corp (supra) dismiss the ground taken by the revenue." 101. Facts being identical, respectfully following the aforesaid observations of the Co-ordinate Bench, we uphold the decision of the learned Commissioner (Appeals) by dismissing the ground raised. 102. In ground no.7, the Revenue has challenged the decision of the learned Commissioner (Appeals) in restricting the disallowance under section 14A of the Act to Rs. 2,00,000. 103. While deciding the appeal of the assessee on identical issue being ground ....
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....y should form part of total turnover for computing deduction under section 80HHC of the Act and accordingly he computed the deduction under section 80HHC of the Act by including Sales Tax and Excise Duty in the total turnover. 110. When the issue came in appeal before the learned Commissioner (Appeals), accepting the claim of the assessee, he directed the Assessing Officer to exclude Sales Tax and Excise Duty from the total turnover for computing deduction under section 80HCC of the Act. 111. The learned Counsels appearing for the parties agreed before us that identical issue has been decided in favour of the assessee in the preceding assessment years. 112. We have considered rival submissions and perused materials on record. As could be seen from the material on record, similar dispute arose between the parties in the preceding assessment years and the Tribunal while deciding the issue in assessment year 2001-02 in ITA no.4374/Mum./2005, dated 18th January 2017, has followed its earlier order and upheld the decision of the learned Commissioner (Appeals). The observations of the Tribunal in this regard is reproduced hereunder:- "57. Ground No.8 pertains to directi....
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....see's own case for assessment year 2001-02. 116. We have considered rival submissions and perused materials on record. Notably, while deciding identical issue in assessee's own case for assessment year 2001-02, the Tribunal has followed its earlier decision and upheld the decision of the learned Commissioner (Appeals) on the issue. The observations of the Tribunal in ITA no. 4374/Mum./2005, dated 18th January 2017, is reproduced below:- "60. Ground taken by the revenue in ground no.9 pertains adjustment of opening stock under section 145A of the Act. 61. This ground is identical to the Ground No.5 raised by revenue in ITA No.2653/Mum/2005 (AY-1999-2000) (supra), which the Tribunal decided against the revenue by holding as under : "19. Ground No.5 raised by Revenue in the present appeal is directing the AO to made corresponding adjustment of MOVDAT in the opening stock u/s. 145A. This ground is identical to the Ground No.7 raised by assessee in this appeal. As we have already this ground in favour of assessee, keeping in view the observation made in para 10 above, this ground of appeal is dismissed. In the result, appeal filed by the assessee is partly ....
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....milar directions of the learned Commissioner (Appeals) in assessment year 2001-02 has accepted the decision of the learned Commissioner (Appeals). Therefore, Revenue's ground on identical issue in the impugned assessment year should not be entertained. 123. We have considered rival submissions and perused materials on record. Undisputedly, while deciding identical dispute in assessee's own case for assessment year 2001-02, the learned Commissioner (Appeals) has held that though the assessee is entitled for deduction under section 35D of the Act, however, it can avail such deduction only on commencement of commercial production from assessment year 2003-04. It is a fact on record that the aforesaid decision of the learned Commissioner (Appeals) in assessment year 2001-02 has been accepted by the Department. It is a fact on record that the assessee is claiming deduction under section 35D of the Act @ 1/5th of the total expenditure incurred. Therefore, when a part of the expenditure has been accepted by the Department in assessment year 2001-02, it cannot be disallowed in the impugned assessment year. In any case of the matter, the Department is unable to controvert the finding of ....
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.... decision therein we allow the ground raised. 133. Ground no.6, is against treating the interest income and income from truck hire charges as income from other sources. 134. This ground is similar to ground no.6 of ITA no.7095/Mum./2005. Following our decision therein, we restore the issue to the Assessing Officer for fresh adjudication. 135. In ground no.7, the assessee has challenged disallowance of lease premium amounting to Rs. 30,58,728. 136. This ground is similar to ground no.7 of ITA no.7095/Mum./2005. Following our decision therein, we dismiss the ground raised by the assessee. 137. Ground no.8 is against disallowance of write-off of investment in debentures of Punjab Wireless System Ltd. (PWSL) amounting to Rs. 1 crore. 138. Brief facts are, in the course of assessment proceedings, the Assessing Officer noticing that the assessee has debited an amount of Rs. 1 crore to its Profit & Loss account towards investment written-off called upon the assessee to furnish the details justify its claim. In response, it was submitted by the assessee that it has subscribed to 18.5% secured redeemable non-convertible debentures (NCD) of Rs. 100 each of Punjab Wireless S....
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.... is concerned, there is no dispute that the assessee has subscribed to NCDs of PWSL which redemption value is Rs. 3 crore. It is also a fact that the assessee has redeemed a part of the debenture and has received back an amount of Rs. 2 crore. Whereas the balance amount of Rs. 1 crore could not be redeemed due to financial crisis and has been claimed either as bad debt or business loss. It is evident, the claim of the assessee has been disallowed by treating the loss as capital. Further, the learned Commissioner (Appeals) relying upon his decision in respect of interest income and truck hire charges has held that since the income is to be assessed under the head income from other sources held that the investment in debenture which is necessarily for earning interest income cannot form part of normal business activity of the assessee. Therefore, the claim of the assessee cannot be allowed. However, it is the contention of the assessee that object clause of memorandum of association of the company also authorizes for lending of money and investing in debenture. It is required to be examined whether the aforesaid object clause is the main object of the assessee or is an ancillary obje....
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....at the restriction provided in section 80IA(9) of the Act is for the purpose of preventing the tax payer from claiming repetitive deduction in respect of same amount of eligible income, where the deductions under more than one section of Chapter-VIA exceeds the eligible profit of an undertaking. He submitted, there is no condition imposed in section 80HHC of the Act which enables the Department to reduce the eligible profit of section 80IB unit for computing deduction under section 80HHC of the Act. He submitted, while computing deduction under section 80HHC of the Act only the amounts specified in clause (baa) of section 80HHC of the Act can be reduced. He submitted, the object of section 80IA(9) of the Act is, the aggregate deduction under various provisions under heading "C" of Chapter-VI-A does not exceed the profits of the business. In this context, he relied upon the decision of the Hon'ble Jurisdictional High Court in Associated Capsules Pvt. Ltd. v/s DCIT & Anr., [2011] 332 ITR 42 (Bom.) and a number of other decisions as mentioned in the chart furnished before us. 148. The learned Departmental Representative, though, relied upon the observations of the learned Commi....
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....under various provisions under heading „C' of Chapter VI-A, so that the aggregate deduction under section 80-IA and other provisions under heading „C' of Chapter VI-A do not exceed 100 per cent of the profits of the business of the assessee. Our above view is also supported by the C.B.D.T. Circular No. 772 dated 23-12-1998, wherein it is stated that section 80IA(9) has been introduced with a view to prevent the tax-payers from claiming repeated deductions in respect of the same amount of eligible income and that too in excess of the eligible profits. Thus, the object of section 80-IA(9) being not to curtail the deductions computable under various provisions under heading „C' of Chapter, it is reasonable to hold that section 80-IA(9) affects allowability of deduction and not computation of deduction. To illustrate, if Rs. 100 is the profits of the business of the undertaking, Rs. 30 is the profits allowed as deduction under section 80-IA(1) and the deduction computed as per section 80HHC is Rs. 80, then, in view of section 80-IA(9), the deduction under section 80HHC would be restricted to Rs. 70, so that the aggregate deduction does not exceed the profits of the bu....