2018 (12) TMI 1453

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ommissioner of Income Tax, Central Circle- 1(2), Pune U/s. 143(3) rws 254 of the Income Tax Act, your appellant submits, among others, the following grounds of appeal: On facts & in the circumstances of the case and in law, the learned CIT (A) erred in: 1. Disallowing amount of Rs. 9,40,919/- on account of Guest House Expenses. 2. The learned CIT(A) did not consider receipt of Rs. 18,47,51,188/- which is the Part of compensation towards sale price of cables manufactured and sold by Company and compensation received in instalment as income derived from eligible unit u/s 80IA. 3. The appellant craves leave to add, alter or amend any of the grounds of Appeal at the time of appeal hearing." 3. Shri J.G. Pe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of Britannia Industries Ltd. Vs. Commissioner of Income Tax reported as 278 ITR 546, the expenditure claimed in respect of items a), b) and c) are not allowable. In so far as the expenditure on telephone, electricity and other expenses are concerned the same may be allowed as these expenditures were not subject matter of dispute in the case of Britannia Industries Ltd. Vs. Commissioner of Income Tax(supra). 3.2 In respect of ground No. 2 the ld. AR submitted that the assessee had claimed compensation of Rs. 18,47,51,188/- for delayed payments from the Department of Telecommunication (DOT).. In the first round the claim of assessee was rejected by Assessing Officer by passing a cryptic order. The Tribunal restored the issue back to the f....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the assessee has assailed disallowance of expenditure in respect of guest house. The details of the expenditure claimed have already been reproduced in the earlier part of the order. The ld. AR has fairly admitted that the guest house expenditure towards depreciation, repaires & Maintenance and society charges are not allowable. Hence, the only expenditure which the assessee is agitating is on account of telephone, electricity & other expenses Rs.Rs.3,36,216/- for Somerset place Co-operative Society Ltd. and Rs. 47,426/- for Antariksha Housing Complex. The Hon‟ble Supreme Court of India in the case of Britannia Industries Ltd. Vs. Commissioner of Income Tax (supra) in unambiguous term has held : "In our view, the intention of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or deduction u/s. 80IA of the Act as the same has been received as part of deferred payment for supply of cables to DOT. A bare perusal of section 80IA shows that the deduction is available on profits and gains „derived‟ by undertaking from the business. To ascertain whether the compensation received by the assessee has direct nexus with the activities carried out by the assessee, it would be relevant to refer to the agreement entered into by the assessee with DOT for supply of underground cables on deferred payment basis. The relevant extract of the agreement specifying the period of payment is reproduced here-in-below : "12.0 PERIOD OF DEFERRED PAYMENT ARRANGEMENT, INTEREST AND OTHER RELATED CHARGES. 12.1 ....