TaxTMI 
TaxTMI 
2014 (3) TMI 1150
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....intained at far flung places due to business expediency and as hotels were not available in these places, expenditure on the same is allowable as revenue expenditure. The learned CIT (A) further erred in not accepting appellant's contention that expenses specifically allowable uls, 30 to 36 cannot be disallowed as per provisions of Section 37(4) as well as that Section 37(4) is limited to disallow maintenance expenses and not the running expenses. Ground of Appeal No. 2 {page 30 of CIT (A)'s Order} Recovery of Guest House Expenses considered under Rule 6D - Rs. 10, 35, 637 The learned CIT (A) erred in rejecting appellant's claim that recoveries made in respect of Guest House expenses should be treated as travelling expenses, on which Rule 6D should apply and expenses proportionately disallowed and not the entire disallowance of recoveries as 'Guest House Expenses.' Ground of Appeal No. 3 {Page 31 of CIT (A)s Order} Disallowance under Rule 6B with respect to Calendars and Diaries- Rs. 3, 51, 374 The learned CIT (A) erred in disallowing expenditure on Diaries and Calendars on the ground that the same has Company's logo fixed on it, henc....
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.... 68, 99, 294 The learned CIT (A) failed to appreciate the circumstances in which expenditure through the medium of TSRDS was incurred and erred a treating the same as non-business expenditure. Ground of Appeal No. 12 {Page 80 of CIT (A)'s Order} Rs. 9, 12, 577 The learned CIT (A) erred in disallowing the contribution on the ground that they are covered by the provisions of Section 40A(a). Ground of Appeal No. 13 {Page 90 of CIT (A)'s Order} Contributions to various Institutions- Rs. 19, 68, 131 The learned CIT (A) erred in disallowing contributions to institutions on the ground that such expenditure was not incurred for the purposes of the business, having failed to understand the scenario that establishes nexus between the contributions made and the business of the appellant. Ground of Appeal No. 14 {Page 103 of CIT (A)'s Order} Fees paid to Consultants for Feasibility Studies - Rs. 50, 22, 577 The learned CIT (A) erred in disallowing Rs. 50, 22, 577being fees paid to the Consultants for carrying out feasibility studies on the ground that it constitutes capital expenditure. Ground of Appeal No. ....
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....es: Surgical Instruments in Hospital 2, 28, 226 Telephones 7, 500 Ore Mines & Quarries: Surgical Instruments and Medical Appliances 69, 157 West Bokaro Collieries: Surgical Instruments 3, 20, 184 X-Ray and Electrotherapeutic Apparatus 7, 25, 392 Air-conditioning :Service Building 5, 971 500 MA X-Ray facilities 63, 415 Street Lighting in Workers' Colonies 9, 72, 093 Tubes Division- Works: Air-conditioning Plant for Works General Office 86, 599 Air-conditioning of works Pay Counter 82, 000 Air-conditioning of Accounts and ETS extension 85, 137 Air-conditioning for Test House 46, 213 29, 47, 901 Investment Allowance @ 25% 7, 36, 975 Ground of Appeal No. 21 {Pages 212 of CIT (A)'s Order} Expenses incurred in connection with the increase in Authorised Capital. Rs. 26, 77, 500 SThe learned CIT (A) erred in disallowing expenses incurred in connection with the increase in Authorised Capital. Ground of Appeal No. 22 {Pages 213 of CIT (A)'s Order} Bad Debts Written Off Rs. 8, 90, 038 The learned CIT (A) erred in not allowing dues from Government ....
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....pply and expenses proportionately disallowed and not the entire disallowance of recoveries as 'Guest House Expenses. ' Ground of Appeal No. 4 {Page 31 of CIT (A)s Order} Disallowance under Rule 6B with respect to Calendars and Diaries - Rs. 2, 21, 294 The learned CIT (A) erred in disallowing expenditure on Diaries and Calendars on the ground that the same has Company's logo fixed on it, hence has advertisement value. Ground of Appeal No. 5 {Page 34 of CIT (A)s Order} Disallowance of Annual General Meeting Expenses- Rs. 79, 247 The learned CIT(A) erred in treating expenditure at Annual General Meeting in the nature of entertainment expenditure, hence disallowing the same. Ground of Appeal No. 6 {Page 36 of CIT (A)s Order} Disallowance of expenditure on Tea and Coffee served to visitors u/s. 37(2A) - Rs. 2, 25, 000 The learned CIT(A) erred in disallowing the expenditure on beverages served to visitors on the ground that the same constitutes to entertainment expenditure. Ground of Appeal No. 7 {Page 41 of CIT (A)'s Order} Expenditure on business meetings and conferences of employees- Rs.....
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....330 The learned CIT (A) erred in disallowing Rs. 1, 17, 23, 330 being fees paid to the Consultants for carrying out feasibility studies on the ground that it constitutes capital expenditure. Ground of Appeal No. 15 {Page 114 of CIT (A)s Order} Payments in Cash in excess of Rs. 2, 500/- Rs. 1, 91, 641 The learned CIT(A) erred in disallowing payments in excess of Rs. 2, 500 without considering the special situation in which such payments were made. Ground of Appeal No. 16 {Page 115 of CIT (A)s Order} Adhoc disallowance under Rule 6D in respect of travelling expenses of outsiders etc. Rs. 4, 00, 000 The learned CIT(A) erred in confirming an adhoc disallowance of Rs. 4, 00, 000 in respect of travelling expenses of Auditors, Consultants, foreign technicians etc. Ground of Appeal No. 17 {Page 116 of CIT (A)s Order} Expenditure incurred on Darjelling Holiday Home- Rs. 2, 64, 301 The learned CIT(A) erred in treating Darjeeling Holiday Home as Guest House rejecting appellant's contention that the same is covered by the second proviso to Section 37(4) hence not to be treated as a Guest House. Ground of ....
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....Ground of Appeal No. 23 {Page 217 of CIT (A)'s Order} Contributions ranking as Business Expenditure 50, 82, 185 The learned CIT (A) erred in holding up the disallowance on the ground that it is a non-business expenditure and setting it aside to the Assessing Officer to ascertain its admissibility u/s. 80G. Ground of Appeal No. 24 {Page 218 of CIT (A)'s Order} Restriction of deduction u/s. 80M 3, 17, 90, 663 The learned CIT (A) erred in restricting the deduction u/s. 80M by not taking cognizance of proceeds of Rights Share Issue due to which investment in Units was made. Ground of Appeal No. 25 The learned CIT(A) has not committed error in recording some facts in his Order. The appellant craves leave to produce before the honourable ITAT correct at the time of hearing. The Appellant craves leave to add to, alter or amend the above grounds of appeal. ITA/3967/Mum/2003/-AY. 1990-91: Ground of Appeal No. 1{Page 17 of CIT(A)'s Order} Receipt of Rs. 4, 37, 97, 762 from Ahmedabad Advance Mills. The appellant states that the receipt of Rs. 4, 37, 97, 762 from Ahmedabad Advance Mills ....
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.... (A)'s Order} Expenditure on business meetings and conferences of employees- Rs. 66, 26, 495 The learned CIT (A) erred in holding that the expenditure incurred on the business meetings and conferences as entertainment expenditure incurred under the provisions of Section 37(2A) of the Incometax Act. Ground of Appeal No. 8 {Page 44 of CIT (A)'s Order} Disallowance of expenditure on Payments made to Clubs- Rs. 38, 01, 992 The learned CIT (A) erred in treating payments to Clubs as entertainment expenditure covered under the provisions of Section 37(2A). Ground of Appeal No. 9 {Page 53 of CIT (A)s Order} Expenditure on Partly Convertible Debenture Issue- Rs. 5, 98, 59, 846 The learned CIT (A) erred in disallowing the expenditure on partly Convertible Debentures (attributable to convertible portion) on the ground that the same is capital expenditure and referring back to the Assessing Officer for verification of claim made by the appellant u/s. 35D. Ground of Appeal No. 10 {Page 10 of CIT (A)s Order} Disallowance of Tata Steel Rural Development Society Expenditure- Rs. 2, 03, 14, 152 The learned ....
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....al Equipment 3, 16, 212 Total 1, 50, 16, 560 Investment Allowance @ 25% 30, 03, 312 The learned CIT (A) erred in not following the judgments of the Hon'ble Mumbai Income-tax Appellate Tribunal in the Appellant's own case for the Assessment Years 1981-82 and 1982-83 on identical issues. Ground of Appeal No. 17 {Pages 167 to 169 of CIT (A)'s Order} Disallowance of Investment Allowance on various items of Plant & Machinery 27, 25, 433 The learned CIT (A) erred in not getting Investment Allowance on the following assets not considering the wider connotation of words 'manufacture' or 'production' on the ground that the machinery installed has no link with the manufacturing process:- Rs. Works: Computers: Printer for telecommunication Department. 2, 73, 765 CAD system for Central Engineering Department 3, 02, 000 Ore Mines & Quarries: Computer System 28, 29, 891 Jharia Collieries: Equipment in the Training Institute 3, 33, 159 West Bokaro Collieries: Hospital Equipment 8, 87, 296 Various other items 14, 59, 581 Sales & Stockyards: Computer Systems 75, 41, 4....
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....d CIT(A) has erred in directing the A. O. to allow Rs. 2, 14, 659/- on account of investment allowance on plant and machinery installed at stock yards." 9."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A. O. to allow investment allowance on various items of plant and machinery i. e. signature dranbyer, portable oscilloscope, trolly, computer system, telephone system, microprocessor based computer system, weigh bridge/weigh machine, light fittings, overhead lines, cabling overhead, NELCO 5000 (computer) & AC etc. in various divisions as discussed by the CIT(A) in para 40 of his order." 10." On the facts and in the circumstances of the case and in law, the learned, CIT(A) has erred in directing the A. O. to allow Rs. 68, 03, 577/- on account of fees paid to consultants for feasibility studies." The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the ITO/AC/DC be restored. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. ITA/3983/Mum/2003/-AY. 1989-90: 1."On the facts and in the circumstances....
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....deduction on account of provision for leave salaries." 2."On the facts and iii the circumstances of the case and in law, the learned CIT(A) has erred in directing the A. O. to allow 20% of initial contribution as deduction in the year in which the initial contribution was made to the approved superannuation fund." 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the AO. to allow Rs. 1, 38, 523/- on account of payment for holiday plan at hotels as guest house expenses." 4."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A. O. to exclude the sales tax, excise duty etc. from the total turnover for the purpose of calculating deduction u/s. 8OHHC." 5."On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the A. O. to allow Rs. 83, 80, 684/- on account of investment allowance." 6." On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the AO to allow investment allowance on computer systems etc. in various divisions as discussed ....
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....Allowance and ESA on water works G . 1 8 Bad and Doubtful written off dues from Government departments G. 22 Disallowance of AGM G. 24 Exclusive grounds for AY. 1989-90 Contribution of IIT Khargarpur G. 22-1988-89 Contributions ranking as business expenditure G. 23-1989-90 Deduction u/s. 80M G. 24-1989-90 Appeals by the AO Provision for leave salary G. 1-1987-88, 1989-90, 90-91 20% of initial contribution to approved superannuation fund. G. 2-1987-88, 1989-90, 90-91 Payment for holiday plan at hotels as guest house expenses G. 3-1987-88, G. 4-1989-90, 90-91 Investment allowance & extra shift allowance on town division G. 7-1987-88, G. 6-89-90, G. 5-90-91 Investment allowance on various items of Plant & Machinery G. 9-1987-88, G. 7-89-90, G. 6. 90-91 Maintenance of Horniman circle gardens G. 6-87-88, G. 4-89-90. Investment allowance on Plant & Machinery of stock yard G. 8-1987-88. Deduction on account of guaranteed payment to AAML. G. 3-1987-88. Remuneration to Chairman and Managing Director G. 5-1987-88. Expenditure on fees to consultants for feasibility studies G. 10-1987-88. ....
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....ding and lodging to the suppliers and business associates, that in the case of the employees a book entry was passed, that the assessee had debited the expenditure incurred on the employees in respect of service charges i. e, lodging or boardihg and lodging charges to the travelling expenses account and credited to the guest house expenses account, that it did not recover any sum from the employees and only a book entry was passed. Considering the above facts the AO held that there was no reduction in its liability by the notional recovery and as a result, he did not allow the assessee to set off the notional recovery attributable to the employees against the guest house expenses. However, the service charges for using the guest house by the suppliers and business associates, the assessee received cash and the AO allowed it to be set off against the guest house expenses under first proviso to section 37(4). The assessee included the service charges notionally computed for using the guest house in the travelling expenses account. At the time of quantification of the disallowance under Rule 6D, the expenditure which was incurred at the guest house was also included in the disallowanc....
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....s travelling expenses incurred by the company for its business. Therefore, the user of guest house facilities provided by the company to the employees of the company in connection with discharge of their official duties does not alter the basic character of the expenditure. Ultimately such expenses are connected with the travelling by such employees and, therefore, should be treated accordingly, irrespective of the fact that such employees stayed in the guest house of the company. In view of the above facts and circumstances, we direct the AO to allow the deduction of amount received from parent departments as expenditure in the nature of travelling expenses ;and in accordance with Rule 6D of the IT Rules. Thus this ground of the assessee is accepted. ' 13. In view of the above, we direct that the addition to the extent of recoveries made by the assessee be allowed as a deduction. Ground No. 4 of the assessee is allowed. ' Respectfully, following the above ground no. 4 is decided in favour of the assessee." Considering the above issue of guest house expenses is decided in favour of the assessee. 5. Next ground of appeal is about disallowance under Rule 6B of....
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....e in A. Y. 1988-89 in I. T. A. No. 3222/ Mum/92 and this Tribunal has taken a view that serving of tea, coffee arnd soft drinks to shareholders at Annual General Meeting is not expenditure in the nature of entertainment by following the ruling to that effect in the case of CIT vs. Mysore Minerals Ltd. , 126 ITR 437(Kar). The learned CIT(A)has, however, distinguished the decision in the case of Mysore Minerals Ltd. (supra) as follows: - 'The definition of entertainment expenditure was inserted by the Finance Act, 1983 with retrospective effect from 1. 4. 1976. In my view, the expenditure incurred on serving tea, coffee and soft drinks is covered by the Explanation 2 to section 37(2A)/(37(2). In the Explanation 2 it is stipulated that the expenditure on provision of hospitality of every kind by the assessee to any person whether by way of provision of food or beverages or in any other manner, whatsoever, would be entertainment expenditure. The sweep of the words entertainment expenditure found in the Explanation 2 to section 37(2A)is wide and broad to cover every expenditure on provision of hospitality of every kind to any person other than the employees at the place of thei....
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.... the Expl. 2 made it clear that the expenditure on provision of hospitality of every kind by the assessee to any person other than the employees in office, factory or other place of their work, whether by way of provision of food or beverages or in any other manner, whatsoever, would be entertainment expenditure, that the expenditure incurred by the assessee on tea, coffee etc. formed part of the definition of entertai -nment expenditure, that the estimates of expenditure by the AO. s were very reasonable and same did not call for any interference. 7. 2. Before us, it was submitted that, while deciding the identical issue, Tribunal had partly allowed the appeal filed by the assessee. We have heard the rival submissions and perused the material before us. We find that in the AY. 1985-86, Tribunal had dealt the issue as under: '20. The AO estimated a sum of Rs. 1lakh as the probable expenditure out of entertainment expenditure quantified by the auditors in their report, incurred by the assessee on providing tea and coffee served to the visitors. The estimate made by the AO was confirmed by the CIT(A). According to the Revenue Explanation 2 to subsection (2A) of section 37....
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....ormally works, that words' other place of work' should be akin to office or factory and it could not be taken to include hotel or restaurant, that the assessee did not place any evidence to establish the fact that the expenditure incurred on business meetings & conferences contained the rent paid for the halls in the hotels. He directed the AO to examine & allow if the assessee is able to furnish the evidence of rent paid to the hotels or restaurants which was included in the business meeting & conferences expenditure. Finally, he sustained the additions made by the AO subject to verification of evidence of rent paid. 8. 2. Before us, AR agreed that the issue was decided against the assessee by the order of the Tribunal for earlier AY. We find that identical issue for AY. 1986-87 was dealt by the Tribunal as under: 8. 2. Before us, representatives of both the sides agreed that while adjudicating the appeal for the AY. 1985-85(supra), Tribunal had decided the matter against the assessee-company. We find that appeal filed by the assessee with regard to disallowance of expenditure on business meetings and conferences of the employees, was dealt by the Tribunal as under, in parag....
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....similar to "office" or "factory". Normally, the expression "other place of their work" includes places such as mine, work site, drilling site, godown etc. But certainly the expression does not include expenditure incurred at a place other than the place at which an employee normally works. The principle of ejusdem generic warrants that "other place of work" should be akin to office or factory and it cannot be taken to include hotel or restaurant. The expenditure incurred by the appellant was towards food or beverages. In my view, the expenditure incurred on the employees at a place other than office or factory requires to be treated as entertainment expenditure. The hotel or restaurant cannot be treated as "any other place of their work". I am also not able to agree with the contention that a large number of employees had attended the business meetings. As observed earlier, the sweep of the words entertainment expenditure found in Explanation is wide and broad to cover every expenditure on provision of hospitality of every kind to employees also, provided the expenditure is not incurred in office or factory or any other place of their work where an employee normally discharges his ....
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.... following the above we decide ground no. 8 against the assessee." Following the above G. 6/G. 7 for the AY. s1987-88, 1989-90 and 1990-91 respectively are decided against the assessee -company. 9. G. 7 for the AY. 1987-88 and G. 8 for the AY. s1989-90, 90-91are about disallowance of expenditure on payments made to Clubs and the amounts involved are Rs. 3. 42 lakhs, Rs. 21. 75 lakhs and Rs. 38. 01 lakhs respectively for the years under appeal. On the basis of the details furnished by the assessee in the tax audit reports, AO. s came to the conclusion that the payments made to clubs, as indicated earlier, were in the nature of entertainment expenditure. He disallowed the said amounts, claimed, u/s. 37(2A)/37(2) of the Act, by the assessee-company. In the appellate proceedings FAA held that that the assessee did not bring any material on record to establish that payments to clubs did not contain the expenditure in the nature of entertainment expenditure, that the payment made to clubs comprised mainly of expenditure on food and beverages, that the expenditure on food and beverages incurred at clubs has to be treated as entertainment expenditure u/s. 37(2A)/ 37(2)of the Act, tha....
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.... the assessee, he held that the expenditure estimated by the AO. s were towards food and beverages incurred by the assessee on employees'get-togethers and picnics, that the expenditure incurred fell within the meaning of Explanation 2 to section 37(2A)/37(2) of the Act. He upheld the addition following the decision taken for earlier issue. 10. 1. During the course of hearing before us, AR conceded that issue of Expenditure incurred on Employees'Get-togethers and picnics has been decided against the assessee by the order of the Tribunal for the AY. 1986-87(supra). We find that Tribunal has dealt the issue as under: 10. 2. Before us, AR and DR submitted that issue was identical to issue no. 10 for the AY. 1985-86 and the disallowance confirmed by the FAA, was upheld by the Tribunal. We find that ground no. 10 and facts related to it were deliberated upon by the Tribunal as under: "10. The learned CIT(A) erred in holding that the expenditure incurred on employees' get-togethers on the ground that the same is covered as entertainment expenditure." X X X X The AO disallowed the claim for deduction on the same ground on which expenditure on business....
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....arried on by it, that it was an application of income for a charitable or philanthropic cause, that there was no commercial expediency also in incurring the expenditure on the rural development, that the disallowance made by the AO did not call for any interference. 11. 2. Before us, AR submitted that issue has been decided in favour of the assessee by the Tribunal for the AY. 1986-87(supra), that while deciding the issue Tribunal had considered the orders of TISCO(Tata Steel)for the AY. s 1968-69, 1980-81and1985-86(ITA/2068&2321/Bom/74 75, ITA/ 2046/Bom/1984, ITA/3938& 3980/Mum/2003)and TELCO for the AY. s1983-84, 1984- 85, 1986-87 to 1990-91(ITA/6003 to 6008/Mum/98). DR supported the order of the FAA. We find that issue before us, has been decided by the Tribunal, while adjudicating the appeal for AY. 1986- 87, in the following manner: "13. 3. We have heard the rival submissions and perused the material before us. We find that dealing with the issue of contribution to various institutions by the assessee , the Tribunal has decided the matte; in the order for the AY. 1985-86;as under: "40. Ground No. 14 of the assessee reads as follows: "The learned C....
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....uch institutions To the extent they provide the service to the people of Jamsheapur, the burden to provide similar civic amenities by the assessee is reduced The assessee had made contributions of Rs. 11, 31, 700 to the institutions mentioned above during the accounting year 1984-85 to achieve this objectiveThe Assessing Officer rejected the assessee's claim that these contributions were made to discharge its obligations towards civic amenities and, therefore, it was an item of business expenditure incurred wholly and exclusively in the ordinary course of business. He held that since the major beneficiaries of the expenditure were the company's employees, it was an item of labour welfare expenditure. 43. On appeal by the assessee, the CIT(A) confirmed the order of the Assessing Officer. We have heard the rival submissions. In A. Y. 1968-69on an identical issue, the ITAT, Mumbal in I. T. A. No. 2068/Bom/74-75 was pleased to hold that expenditure was for welfare of employees and was, therefore, allowable as deduction. It was the contention of the learned DR before us that in the earlier decisions of the Tribunal, the decision of the Hon'ble Bombay High Court in the case of V....
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....r the purpose of business. 12. 1. In the appellant proceedings, FAA considered the submissions of the assessee and held that the contributions were covered by section 40A(9) of the Act, that Section 40A(9) was enacted with a view to discouraging creation of certain irrevoc -able trusts ostensibly for the welfare of the employees and transfer to such trust substantial amounts by way of contribution, that with a view to discouraging creation of such trusts, funds, companies, association of persons, societies etc. , the Finance Act, 1984 had provided that no deduction would be allowed in the computation of taxable profits in respect of any sums paid by the assessee as an employer towards the setting up or formation of or a contribution to any fund, trust, company, association of persons, body of individuals or society or any other institution for any purpose except where such sum was paid or contributed to a recognised provident fund or an approved gratuity fund or approved superannua - tion fund or for the purposes of and to the extent required by or under any other law, that the contributions were given to Tata Sports Club in the capacity of an employer for the benefit of the emp....
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....edpur Notified area Committee, Merry Hospital, Jamshedpur, Trade Workers' Union, Loyola School, All India Football Association, that on a perusal of the above contributions it was evident that the assessee had given a general and vague explanation about the issue before him, that it did not establish the direct nexus between the contributions and the business, that in the absence of such a nexus, it could not be presumed that the contributions were made for the purpose of the business, that the contributions made by the assessee were on the nature of application of income, that the contributions were hit by the provisions of section 40A (9) of the Act. FAA upheld the order of the AO. s. 13. 2. Before us, AR and DR took the same stand that they had taken for the earlier two grounds of appeal. We have decided grounds no. 11-12 in favour of the assessee. Following the same ground no. 13 is also allowed, as the facts of the ground are identical to earlier grounds. 14. G. 14 for AY. s1987-88, 1989-90 and G. 13 for AY. 1990-91 deal with fees paid to consultants for feasibility studies(Rs. 50. 22 lakhs, Rs. 1. 17 Crores and Rs. 13. 98 lakhs). During the assessment proceedings AO. s ....
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....sessee had violated the provisions of section 40A(3)of the Act and for the said violation he made a disallowance of Rs. 6. 35 lakhs and Rs. 1. 91 lakhs for the AY. 1987-88 and AY. 1989-90 respectively. After considering the submissions of the assessee, FAA held that in the Tax Audit reports the payments made in cash exceeding Rs. 2, 500/- were quantified. He directed the assessee and the AO carry out necessary verification in this regard. Before us, AR conceded that the identical issue was was dismissed by the Tribunal while deciding the appeal of the assessee, for the AY. 1986-876(supra). Following the order of the Tribunal for the last AY. s, we decide ground no. 15 against the assessee-company. 16. Issue of Investment allowance on town division assets is the subject matter of (G. 17 of AY. 1987-88, G. 18 of AY. 1989-90 and G. 16 of AY. 1990-91) and the amounts involved are Rs. 1. 25 Crores, Rs. 26. 46 Crores, and Rs. 30. 03 lakhs. During the assessment proceedings, AO. s held that the town division provided residential facilities to the employees as well as to other residents of the township, that various assets were installed by the assessee in the town division in variou....
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....ovisions of the section if the plant and machinery was installed for the purpose of business of generation or distribution of electricity then investment allowance had to be allowed, that the assessee had a licence for generation and distribution of electricity, that the electricity division was an industrial undertaking by itself engaged in the generation or distribution of power, that the assessee had classified the cost of machinery under the heading town division but that did not mean that the plant and machinery was not used for the purpose of generation and distribution of electricity. He directed the AO to allow investment allowance on electrical machinery. With regard to the claim of extra shift allowance on the electrical machinery, FAA held that the assessee was not entitled for extra shift allowance for the said machinery, that the electrical machinery appeared in Appendix 1, Part I of Depreciation Schedule. He directed to the AO to segregate the value of the P&M into two categories and to allow the investment allowance on the P&M attributable to the manufacturing process. He further held that the assessee was running a hospital called Tata Main Hospital and the activ....
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....machinery/plant installed in any residential accommodation, including accommodation in the nature of a guest house. He upheld the action of the AO. s. He also held that the assessee was not entitled for the additional depreciation because the conditions for allowing the additional depreciation were similar to investment allowance. About the extra shift allowance on Computer systems, FAA held that same was not admissible as the rules were very clear in this regard. With regard to investment allowance on telephone system, FAA held that the assessee did not explain where the telephone system was installed, that the assessee had classified the telephone system under the town division which basically dealt with the residential facilities, that no investment allowance could be given on the P&M installed in residential accommodation, that the action of the AO. s was to be upheld. 16. 2. Before us, AR submitted that while deciding the appeal for the AY. 1986-87, Tribunal had discussed, the issues of investment allowance and extra shift allowance and depreciation on various assets of town division and other P&M, in length and had decided the matter in favour of the assessee . We find tha....
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....he township and, therefore, would amount to plant and machinery in the nature of residential/ office accommodation. 46. Before the CIT(A), the assessee contended as follows: The assessee had on its own excluded 4 items of plant and machinery which have been installed in the residential premises/office accommodation in the Town Division for the purpose of claiming additional depreciation. It has claimed additional depreciation on those items of plant and machinery which are installed in the Town Division like, electrical machinery for power generation, water works machinery for supply of water, sanitary machinery for drainage system in the Town Division etc. The assessee on its own excluded plant and machinery installed in the residential/office accommodation for claiming investment allowance. The application of 32A(2)(iii), in fact, would cover plant and machinery installed 'own Division within the meaning of "industrial undertaking". The Assessing Officer, in his assessment order, has tried to the meaning to be imputed to "industrial-undertaking" to only manufacturing plant and machinery."Industrial Undertaking" would cover all facets of business and, in short, r....
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....n of any article or thing. In this regard the CIT(A) referred to the following decisions wherein it has been laid down that investment allowance and additional depreciation can be allowed only when the plant and machinery is used for the business of manufacture or production of any article or thing. (a) Technico Enterprises (P) Ltd. , 206 ITR 36 (Cal. ) (b) Peico Electronics Ltd. , 201 ITR 477 (Cal) (c) Machinery Manufacturing Corpn. Ltd. , 198 ITR 559 (Cal. ) (d) Tribeni Tissues Ltd. , 206 ITR 92 (Cal) (e) Continental Device (I) Ltd. , 196 ITR 571 (Del) 48. The assessee had placed reliance before the CIT(A)on the decision of ITAT 'D' Bench in assessee's case in I. T. A. No. 8116 & 81l7/Bom/91 dated 5. 3. 2002 for A. Y. 198 1-82 and 1982-83 wherein the ITAT had taken a view that assets of Township Division formed part of the manufacturing process of the assessee. On the above decision of the ITAT, the learned CIT(A) held as follows: "The Hon'ble ITAT 'D' Bench, Mumbai relied on the decision of Hon'ble ITAT, Bombay Bench in the assessee's own case for assessment year 1968-69 to 1971-72. 1 have perused this order of the H....
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....udgments of the Calcutta High Court lay down the proposition that the plant and machinery should be an integral part of the manufacturing process and machinery on which investment allowance is claimed is necessary to make the assessee's manufacturing unit in a state of operational integration. L In other words, any machinery or plant having a link in the total process of the operational integration should be taken as machinery or plant pertaining to the manufacturing process." 49. For the very same reasons as given above, the deduction on account of additional depreciation was also disallowed. The claim for deduction on account of extra shift allowance (ESA) was disallowed for the reason that the items of assets in respect of which ESA was claimed were not the items of assets listed in Part-I, Appendix-I to the Income-tax Rules, 1962 for which ESA was to be allowed. The CIT(A), however, allowed the following claim for deduction: X X X 50. For the very same reasons as given above, additional depreciation was allowed on the above two items. According to the CIT(A) the condition for grant of additional depreciation investment allowance was same and hence he ....
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....wnship formed an integral part of the whole industrial complex, one of which cannot exist without the other. It has been held that the plant and machinery installed even for providing the necessary facilities to the employees which does not apparently have any connection with the manufacturing activity is directly needed for the running of the priority industry. We, therefore, hold that investment allowance is admissible to the assessee on the plant and machinery in the Town Division, particularly when on the items like light and fan installations the assessee had itself not claimed any investment allowance. We, therefore, hold that additional depreciation, extra shift allowance and investment allowance are admissible to the assessee on the plant and machinery in the Town Division. Therefore, no interference is called for in the order of the CIT(A). The appeal of the revenue fails on this issue." 52. We are of the view that the Tribunal has considered all aspects of the case as discussed by the CIT(A). We, therefore, following the order of the Tribunal, direct the AO to allow the claim of the assessee. Gr. No. 15 is allowed." 20. 3. We find that Hon'ble Bombay Hig....
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....gs AO found that the assessee had claimed FEF of Rs. 13. 75 lakhs and 20. 43 lakhs respectively for the AY. s under appeal. He found that assessee had claimed that due to FEF there was increase in value of P&M and same should be allowed while computing the taxable income of the assessee for the respective years. AO did not agree with the assessee and rejected its claim. In the appellate proceedings, FAA relied upon the judgment of Khatau Mukanji Spinning & Weaving Mills(222ITR472)and upheld the order of the AO. 19. 1. Before us, AR submitted that details of increase in value of P&M on account of FEF was given to the AO vide note 10 of Annual Accounts for the Financial year ending on 31. 03. 1987, that the decision of Khatau Mukanji Spinning & Weaving Mills(supra)was held to be per incuri - um. He relied upon the cases of Associated Bearing Co. Ltd. (286ITR341), Gujarat State Fertiliser (259 ITR526) and Gujarat Sidhi Cement Limited(307ITR393). 19. 2. We have heard the rival submissions and perused the material before us. We find that the issue of FEF has been decided by the Hon'ble jurisdictional High Court in the case of Associated Bearing Co. Ltd. (supra)in following manner:....
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....wances, section 43A(2) would become redundant. Further, the Legislature has expressly referred to the one time allowance in section 43A(1) itself such as sections 35(1)(iv), 35A etc. There is, therefore, nothing to suggest that one time allowances are to be excluded. In fact, there are several reasons to show that one time allowances are to be included. For instance, section 32A itself provides that investment allowance may be availed of during the period of eight years (CIT v. Gujarat State Fertilizers Co. Ltd. [2003] 259 ITR 526 (Guj) [FB]). Section 43A(1) in express terms applies whenever there is an increase or decrease in liability due to a change in the rate of exchange at any time after the acquisition of the asset. The section expressly provides that such variation during the previous year shall be added to or reduced from, inter alia, the actual cost. (CIT v. Gujarat State Fertilizers Co. Ltd. [2003] 259 ITR 526 (Guj) [FB]). In fact it is suggested that section 43A could apply as a result of variation in the rate of exchange at any time and not merely during the eight years within which investment allowance must be availed of. Section 43A is a beneficial ....
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....n'ble jurisdictional High Court, delivered in the matter of Associated Bearing Co. Ltd. (supra), we decide G. 19 for both the AY. s, in favour of the assessee . 20. Next ground of appeal is about receipt from Ahmedabad Advance Mills(G. 1-1989-90, 1990- 91). During the hearing before us, it was submitted that payment to Ahmedabad Advacne Mills had been allowed in earlier AY. s, that in view of that ground did not survive, that in the event it was held by higher judicial forums that payment of Ahmedabad Advacne Mills were not deductible as capital in nature receipts should not be taxed. We find that the assessee is asking us to deal with the situation that may arise in future. We are not in a position to deal with such eventuality. Therefore, G. 1, for both the AY. s, is being dismissed as infructuous. 21. Last common ground for the last two AY. spertains to expenditure on partly convertible debenture(G. 10-1989-90, G. 9-1990-91). Asssessee had claimed expenditure of Rs. 26. 55 lakhs and Rs. 5. 98 Crores under the head expenditure on partly convertible debenture for the AY. s under appeal. AO rejected the claim made by the assessee . In the appellate proceedings, FAA upheld the....
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....Hon'ble Supreme Court in this judgment considered various aspects of the matter including the previous English judgments and couple of judgments of the English courts based on the English Income Tax Act and proceeded to draw distinction between the income tax law in England and India. Not only this, the Hon'ble Supreme Court further proceeded to examine a number of cases decided by various High Courts like Kerala, Andhra Pradesh, Calcutta, Bombay, etc. , and had gone to the extent of holding that some of the judgments were wrongly decided. Then, the Hon'ble Supreme Court proceeded to hold as under (page 63) : "10. To summarise this part of the case, we are of the opinion that : (a) the loan obtained is not an asset or advantage of an enduring nature ; (b) that the expenditure was made for securing the use of money for a certain period ; and (c) that it is irrelevant to consider the object with which the loan was obtained." Thus, it was held that the expenditure incurred in procuring the loan was revenue expenditure within section 10(2)(xv) of the old Income-tax Act, which corresponds to section 37 of the present Act. By going through the said judgment,....
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....s, we do not find any error in the finding of the learned Tribunal on this aspect also. Consequently, question No. 2 also as framed, is required to be and is answered against the Revenue and in favour of the assessee." Respectfully, following the order of the Hon'ble Rajasthan High Court, we decide G. 10/9 for the AY. 1989-90 and 1990-91 in favour of the assessee . 22. Now we would take up the grounds that are AY. s specific. First, we will discuss the specific grounds raised for AY. 1987-1988-G. 9 for that year is about disallowance made under Rule 40A (5) in respect of deemed perquisites. 22. 1. During the assessment proceedings AO found that in the returns of income, the assessee had computed the disallowance under section 40A(5) with a note that the disallowance was estimated by it on account of non-availability of information readily at the time of furnishing of the returns, that the auditors had also not quantify the disallowance u/s. 40A(5). However, during the course of assessment proceedings, the assessee quantified the disallowance u/s. 40A(5) of the Act. The assessee while computing the perquisites u/s. 40A(5) did not include the expenses incurred on soft furnis....
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....t ground deals with expenditure, amounting to Rs. 4, 58, 110/-, incurred on conversion of Partly Convertible Debentures in to shares (G. 10). Before us, AR fairly conceded that similar issue was decided against the assessee in the AY. 1986-87 by the Tribunal. We find that following the judgments of Brooke Bond India Ltd. (225ITR798)and Punjab State Industrial Development Corporation Ltd. (225ITR792), Tribunal had decided the identical issue against the assessee. Therefore, we dismiss G. 10 filed by the assessee , for the AY. 1987-88. 24. Issue of disallowance of Investment Allowance and ESA on water works(Rs. 47. 28 lakhs) is the subject matter of G. 18 for the AY. 1987-88. During the assessment proceedings, AO had held that investment allowance and extra shift allowance was not available on machinery supplying water as same was not directly related to manufacturing activities of the assessee . During the appellate proceedings it was submitted that water was drawn from river Kharkhai, river Subarnarekha and Dalma lake for using in manufacturing activity as well as for supplying water to the township of Jamshedpur, that plant and equipment were recorded as plant and machinery ....
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....as under: 25. 2. Before us, AR and DR agreed that issue is covered in favour of the assessee by the order of the Tribunal delivered for earlier AY. (supra). We find that issue of bad debts had been dealt in the AY. 1985-86, by the Tribunal as under : 58. Facts of the case, in brief, are that all the land in the township of Jamshedpur is leased by the Government of Bihar to the assessee and the assessee has constructed houses, bungalows, flats, etc. , for its employees on such land. A few privatc parties engaged in trade, commerce and contract work in Jamshedpur have been given some plots of land by the assessee for construction of residential accommodation. Various Departments of the Central and State Governments like Central Excise, Income-tax, Sales-tax, police, judicial officials, Deputy Commissioners'Office staff, etc. , have requisitioned the assessee's bungalows, houses and flats for residential purposes for the officers of these Departments. The assessee had, in accordance with its scale of charging of rent for the water charges and sewage charges, raised bills either against the specific Departments or the specific officers occupying these accommodations. ....
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....peal no. 3176 of 2010- question of law no. E). Following the above ground no. 24 is allowed" Following the order for the last AY. G. 22 for the AY. 1987-88 is decided in favour of the assessee. 26. Last ground of appeal for the year deals with Disallowance of expenditure, amounting to Rs. 24, 528/-, incurred for AGM. 26. 1. Before us, AR agreed that expenditure incurred for AGM was disallowed by the Tribunal while deciding the appeal for the AY. 1986-87. We find that at paragraph 6(pg. 8-9)of the said order issue is decided against the assessee company. Following that order, we dismiss ground no. 24 for the AY. 1987-88. 27. Out of three exclusive grounds of appeal for the AY. 1989-90, First ground is about Contribution of IIT Khargarpur of Rs. 3, 00, 000/-(G. 22). During the course of assessment proceedings AO found that the assessee had made a contribution of Rs. 3 lakhs to IIT situated at Khargarpur. He was of the opinion that the expenditure was not incurred wholly and exclusively for the business of the assessee . In the appellate proceedings FAA confirmed the order of the AO, as he was also of the opinion that there was no relation between the contribution....
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....t has failed to substantiate the claim made by it, so, in our opinion FAA was justified in rejecting its appeal. Before us, also fact of incurring of expenditure was not established. Therefore, confirming the order of the FAA, we decided ground no. G. 23 for the year under appeal against the assessee. 29. Last ground of appeal for the AY. 1989-90 deals with deduction u/s. 80M of the Act (G. 24). During the assessment proceedings, AO found that the assessee had received dividend income of Rs. 17. 31 Crores, that it had purchased units costing Rs. 56 crores during the previous year. He directed the assessee to explain the source of investment in units of UTI. Assessee submitted that the investment in units of UTI in last year was Rs. 127. 53 crores and after sales during the year, the investment in units at the end of the accounting year was Rs. 186. 04 Crores, that the net accretion to the investment in UTI units was about Rs. 56 crores, that it had made an investment of Rs. 50 Crores on 3l. 07. 1988 in 3. 78 Crore units of Unit Trust of India, that in April, 1988 to June, 1988 it had received rights equity share capital call money and the same was credited to the cash credit acc....
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....d perused the material before us. We find that in the balance sheet, filed by the assessee for the year under consideration, funds available under the heads 'capital', 'reserves and surplus' and 'subscription received' is more than Rs. 800 Crores, that investments made by the assessee in purchasing units of UTI is much less than the funds available with it. We find that with regard to availability of interest bearing and interest free fund, in the case of Reliance Utilities & Power Ltd. (supra), Hon'ble Bombay High Court has held as under: "If there be interest-free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds avail- able. In our opinion, the Supreme Court in East India Pharmaceutical Works Ltd. v. CIT [1997] 224 ITR 627 had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. [1982] 134 ITR 219 where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant....
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.... assessee, for assessment-years in question. In appellate proceedings, FAA allowed the appeal filed by the assessee and directed the AO to allow the claim made under the head 'provision for leave salary'. 30. 1. Before us, DR and AR agreed that submitted that while deciding the appeal for the AY. 1986-87(supra), Tribunal had rejected the ground raised by the AO. We would like to reproduce the order of the Tribunal for the AY. 1986-87, with regard to the issue of provision for leave salary. "29. 3. We have heard the rival submissions and perused the material before us. We find that while deciding the similar issue, for the earlier AY. , ITAT had allowed the appeal of the assessee, that the department had not challenged the order of the Tribunal before the Hon'ble High Court while filing appeal for that AY. , that similar issue was decided in favour of the assessee by the Tribunal while deciding the appeal for the AY. 1992-93(ITA7083/Mum/1996, dated. 23. 12. 2004). While deciding the appeal for the earlier AY., Tribunal has dealt with the issue of provision for leave salary as under: 99. After hearing both the sides, we find the issue stands covered in favour of ....
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....tands covered in favour of the assessee and against the Revenue by the decision of the Tribunal in assessee's own case vide I. T. A. No. 7083/Bom/96 order dated 27th, December, 2004. We find the Tribunal at para 4 of the order has held as under: "4. Ground No. 2 disputes the Ld. CIT(A)'s order in directing to allow the entire amount of Rs. 2, 43, 471/- being initial contribution of assessee to superannuation fund as against 1/5th of 80% of such sum allowed by Assessing Officer. The ld. DR has relied on the orders of Assessing Officer. The ld. AR of assessee has contended that this issue is covered in favour of the assessee vide the judgment of Hon'ble Supreme Court in the case of CIT vs. Sirpur Paper Mills, 237 ITR 41. He has contended that this contribution has also been allowed in A. Y. 1997-98. He has contended that the issue is also covered in 239 ITR 561 (Bom), CIT vs. Beck &Co. (India) Ltd. He has also contended that the assessee's claim has also been allowed by the Tribunal in earlier years from 77-78 to 83-84, and has given details thereof in the chart furnished by him on record. As such, considering all the facts and circumstances of the case, we find the impugned....
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....ary material brought to our notice this ground by the Revenue is dismissed. Respecfully, following the above, Ground no. 4 is decided against the AO." In view of the above we decide ground no. 3 for AY. 1987-88 and Ground no. 4 for AY. 1989-90 and 1990-91 against the AO. 33. Issues of Investment allowance and Extra shift allowance on town division, (G. 7 for AY. 1987- 88, G. 6 for the AY. 1989-90 and G. 5 for AY. 1990-91), Investment allowance on P&M installed at stock yard(G. 8for the AY. 1987-88) and Investment allowance on various items of P&M(G. 9 for the AYs. 1987-88, , G. 7 for the AY. 1989-90 and G. 6 for the AY. 1990-91)have been dealt by the FAA in his common order for the AYs. under appeal. Facts related to these issues have been elaborately discussed in the earlier part of our order. During the assessment proceedings, AO had made certain additions under the heads investment allowance, extra shift allowance, but in the appellate proceedings, FAA gave partial relief to the assessee. AO. s have challenged that part of his order before us. 33. 1. FAA had allowed Investment allowance and extra shift allowance on certain items P&M of town division amounting t....
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....llowance on the new equipment installed in the canteen was denied. In Technico Enterprises (P) Ltd. (supra), it was held that the computer was not used for manufacture or production of any article by the assessee and hence the assessee was not entitled to investment allowance. On the other hand, the decisions relied on by the Id. Counsel of the assessee do assist the case of the assessee. In the case of Triveni Tissues Limited (supra), the Hon'ble Calcutta High Court has held that the assessee, who was manufacturing tissue papers, was entitled to investment allowance on motors, electric installations, underground cables, overhead cables and air conditioning machines. In the case of Visveswarayya Iron and Steel Ltd. (supra) the locomotives and railway sidings provided at places of manufacturing activity for transport of articles out of or into factory were held to be 'plant' entitled to investment allowance. We feel that we need not discuss each and every case relied on by the assessee, particularly when a view has been taken by the ITAT, Bombay Bench, in ssessee's own case for the assessment years 1968-69 to 1971-72. In this order dated 13-10-1976, it has been held by the Tribunal ....
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....on of the Tribunal in assessee's own case in I. T. A. No. 548/Bom/88 order dated 4. 6. 1993 for the A. Y. 1982-83 wherein the Tribunal at para 4 of the order has discussed the issue and following the decision of the Tribunal in assessee's own case for the A. Y. 1981-82 allowed the claim of the assessee on account of investment allowance on railway sidings at stock yard. We find the Tribunal vide order dated 15th December, 1994 in R. A. No. 2202/Bom/93 has dismissed the Reference Application by the Department. Similarly we find the Tribunal in assessee's own case vide I. T. A. No. 549/Bom/88 order dated 4. 6. 1993 for the A. Y. 19983-84 has allowed the claim of investment allowance on railway sidings stock yard amounting to Rs. 6, 20, 602/-. We may further mention that the Tribunal also rejected the Reference Application filed by the Revenue in IT A No 677/Bom/90 Respectfully following the consistent decision of the Tribunal in assessee's own case and in absence of any contrary material brought to our notice against the decision of the Tribunal, we do not find any infirmity in the order of the CIT(A)allowing the investment allowance on the plant and machinery installed by the assess....
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....grounds of appeal No. 7 by the impugned appeal(para 130), we do not find any infirmity in the order of the CIT(A) granting investment allowance on the above assets. the ground raised by the Revenue is accordingly dismissed." Respectfully following the above order, we decide ground no. 9 against the AO." After considering the above we are dismissing Ground by the AO. s with regard to investment allowance, extra shift allowance for various items of P&M including the P&M installed at stock yard and town division. 36. Next ground of appeal is about contribution to Tata Services for maintenance of Horniman Circle gardens as an advertising campaign. During the assessment proceedings, AO found that the beautification of Horniman Circle garden and its surrounding outer circle area garden was undertaken by the assessee and various expenses were incurred by the Tata group of companies, that the assessee's share of expenses was Rs. 62, 500/-, and Rs. 50, 000/-for AY. 1987-88 and AY. 1989-90 respectively. Before the AO it was submitted that as a consideration for contribution towards such beautification of the garden the assessee along with the other companies was allowed to put....
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....ed into with a Tata group concern incurring huge losses could be a conduit to transfer the profits from the assessee company to minimise the loss and therefore, is a colourable device. However, we find the assessee paid the shortfall in the minimum guaranteed amount in the initial three years and during the 4th and 5th year has earned more operative profit which has been offered to tax. We find in the initial three years the assessee has paid a sum of Rs. 6. 11 crores whereas in the A. Ys. 1988-89, 1989-90 and 1990-9 1 the assessee received a sum of Rs. 8. 31 crores and offered the same for taxation. Thus there is a surplus in the deal with AAML to the extent of Rs. 2. 2 crores from A. Ys. 1985-86 to 1990-91. Further nothing has been brought on record that the agreements are false or untrue or that the payments made are excessive or non-genuine or false. In this view of the matter and in view of the elaborate discussion by the CIT(A) on this issue while deleting the disallowance, we do not find any infirmity in the same and therefore, the same is upheld. The ground raised by the Revenue is accordingly dismissed." Respectfully following the above order, we decide Ground no.....
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....rder for the earlier year, we decide ground no. 5 against the AO. 39. Last ground of appeal for the year 1987-88 is about expenditure incurred on fees to consultants for feasibility studies, amounting to Rs. 68. 03 lakhs. We find that in the appeal for the AY. 1986- 87, filed by the assessee-company, Tribunal has dealt the issue as under: "Ground No 12 reads as follows "The learned CIT(A) erred in holding that expenditure of Rs. 15, 00, 000 incurred on technoeconomic feasibility studies was capital in nature." 36. The assessee carries on the business of manufacturing iron and steel. It has got its factories in the States of Bihar and Orissa. It also owns a Bearings Division manufacturing bearings at Kharagpur and Tubes Division manufacturing various types of tubes at Jamshedpur. The assessee is the largest private sector company in India with a turnover exceeding Rs. 1000 crores and assets exceeding Rs. 700 crores. According to the assessee it has to rely on various feasibility reports prepared by professional consultants like M/s. M. N. Dastur & Company, Tata Economic Consultancy Services etc. to provide with basic tools in the form of such studies to....
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....ment order, he held that both the items could not be excluded from the total turnover. 40. 1. Before us, DR and the AR submitted that issue was decided in favour of assessee by the decisions delivered by the Hon'ble Supreme Court in the cases of Catapharma (India) P. Ltd. (292ITR694) and Lakshmi Machine Works(290 ITR 667). We find that in the case of Cataphar - ma (India) P. Ltd. (supra) Hon'ble Apex Court has held as under: "While calculating the deduction under section 80HHC(3)(b) of the Income-tax Act, 1961, for computing the "total turnover" of exports out of India of trading goods, excise duty and sales tax are not to be included. The object of the Legislature in enacting section 80HHC was to confer a benefit on profits accruing with reference to export turnover. Just as commission received by an assessee is relatable to exports and yet it cannot form part of "turnover", excise duty and sales tax also cannot form part of the "turnover" for the purposes of section 80HHC. Just as interest, commission, etc. , do not emanate from the "turnover" so also excise duty and sales tax do not emanate from such turnover. Since excise duty and sales tax do not involve a....