AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 370
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.... and cross objections are common and identical; therefore, these appeals and cross objections have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in ITA No.125/Ran/2015, for assessment Year 2008-09, ITA No.131/Ran/2015, for assessment Year 2008- 09, ITA No.126/Ran/2015, for assessment Year 2009-10 have been taken into consideration for deciding the above appeals en masse. 3. Although, these appeals filed by the Assessee and Revenue for Assessment Year 2008-09, 2009-10 and 2010-11 and Cross-Objections filed by the Assessee in Assessment Years 2008-09, 2009-10 and 2010-11, contain multiple ground of appeals. However, at the time of hearing we have carefully perused all the grounds raised by the Revenue and Assessee, as well as cross objections raised by the Assessee. Most of the grounds raised by the Revenue as well as Assessee, are either academic in nature or contentious in nature. However, to meet the end of justice, we confine ourselves to the core of the controversy and main grievances of Revenue and the Assessee as well. With this background, we summarize and concise the grounds....
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....ng the addition made on allocation of expenses to Power plant unit. This ground covers ground no. 5 of Revenue's appeal in ITA No. 136/Ran/2015 for A.Y. 2009-10, cross objection no. 4 of assessee's C.O. No. 19/Ran/2017 for A.Y. 2009-10. Ground no. 5 of revenue's appeal in ITA NO. 137/Ran/2015, A.Y. 2010-11, C.o. NO. 5 of assessee's C.O. No. 20/Ran/2017 for A.Y. 2010-11. Summarized Grounds of Assessee`s Appeals ITA No. 125/Ran/2015 Assessee`s appeal for A.Y. 2008-09 1. Ground Nos. 1 to 9 raised by the assessee isin respect of disallowance of various expenses on ad hoc basis. This ground covers assessee`s appeal in ITA No. 126/Ran/2015, Ground no. 2 to 7, and ITA No 127/Ran/2015 Ground no. 1 to 6. 2. Ground No. 10 raised by the assessee relates to disallowance of claim of deduction u/s 80IA of Rs. 43,10,307/- on account of adjustment to the market price by reducing the electricity duty without appreciating the fact that electricity duty is a part of the market price if the same is purchased from outside. This ground covers assessee`s appeal in ITA NO. 126/Ran/2015 ground no. 8 and ITA No. 127/Ran/2015 Ground no. 7. 3. Ground No. 1....
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..... 1 of C.O. No. 18/Ran/2017. 5. At the outset itself, we note that this ground raised by the Revenue does not relate to assessment year 2008-09. Ld. Counsel for the assessee informs the Bench that this ground relates to assessment year 2007-08. We have examined the assessment order and order of ld. CIT(A) and noted that there is no any discussion about addition u/s 40(a)(ia) of Rs. 45,17,640/-, therefore, this ground does not relate to A.Y. 2008-09, hence we dismiss ground No. 1 raised by the Revenue. 6. Summarised ground No. 2 raised by Revenue reads as follows: Addition under Rebate and claim of Rs. 78,00,190/- on account of payments made as rebates and claims, on the ground that it is unascertained liability and a provision. Ld. CIT(A) has given full relief after calling for remand report. This ground also relates to Ground no. 2 of C.O. No. 18/Ran/2017, Revenue appeal in ITA No. 136/Ran/2015 for A.Y. 2009-10 Ground no. 2, Ground no. 2 of C.O. No. 19/Ran/2017 A.Y. 2009-10, Ground no. 2 of Revenue's Appeal in ITA NO. 137/Ran/2015 A.Y. 2010-11, C.O. No. 2 of Assessee's C.O. No. 20/Ran/2017 A.Y. 2010-11. 7. Brief facts qua the issue are that this ground r....
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....Y.2007-08 accumulated 86.88 MT which works out of total value of Rs. 78.01 lakhs which is also evident from the ledger details of the Hindalco Industries Ltd. It is noted that liability taken in F.Y.2007-08 (A.Y.2008-09) was an ascertained liability. In view of these discussion, and on perusal of proper vouchers and details of such liability it is noted that the Ld. A.O. has failed to appreciate these details and incorrectly disallowed the ascertained liability of Rs. 78,00,190/- on account of rebate and claims. On the basis of this discussion the addition made by the Ld. A.O. cannot be sustained in appeal and is directed to be deleted. Accordingly, this ground of appeal of the assessee is allowed." 9. Aggrieved the order of the ld. CIT(A) the Revenue is in appeal before us. 10. The ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity and on the other hand the ld. Counsel for the assessee has relied on the order of the ld CIT(A). 11. We have heard both the parties and carefully gone through the submission put forth on behalf of the ....
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....Brief facts qua the issue are that the Ld. A.O. during the course of assessment proceedings had observed that the assessee had debited expenses totalling to Rs. 52,77,946/- under the head Welfare Expenses. The Ld. A.O. had issued show cause to the assessee to explain why expenses debited under this head was allowable particularly gift to employees, other staff welfare expenses, reimbursement of school fees etc. The assessee had replied to the AO stating that these expenses are for the purpose of business. The AO has gone through the reply of the assessee and was of the view that these expenses were purely altruistic and philanthropic in nature and these expenses were not incurred wholly and exclusively for business purposes but have to be treated as application of income. The Ld. A.O. on perusal of the submission of the assessee company had disallowed the following expenditures namely; (i) Festival celebration - Rs. 6,36,292/-, (ii) Scholarship / Reimbursement of School Fee - Rs. 2,87,370/-, (iii) Gift to employees - Rs. 16,62,709/-, (iv) Contribution to club - Rs. 3,16,021/-, (v) Other staff welfare expenses - Rs. 23,36,185/- and (vi) other workers welfare expenses - Rs. 39,....
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....tion to the business of the appellant Company. On perusal of the assessment order it is found that the expensed claimed under this has been made towards scholarship / reimbursement of school fee, Gross expenses under this head from the scholarship / reimbursement of school fee Rs. 2,87,370/- has been claimed as deduction. I have considered all the facts & circumstances of the addition and submissions made by the Ld. A.R. of the appellant and I find that the expenses claimed under this head are in the nature of business expenditure. It is the liability of the Company to provide basic facilities to the employees and their dependent, providing scholarship / reimbursement of school fee for the children of employees is also one of them. It is in the nature of staff welfare and also necessary for maintaining cordial industrial relation and harmony. In view of these facts the addition made by the A.O. is difficult to sustain in appeal and is directed to be deleted. In view of these facts the addition made by the A.O. is difficult to sustain in appeal and is directed to be deleted. iii. Gift to employees - an addition of Rs. 16,62,709/- This amount was disallowed....
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....ful reading of Appellant submission and assessment of need of these facilities which has been incurred for employees of the appellant I am of the opinion that itwould be fair and reasonable if the addition made by the Ld. A.O. is restrictedto 10% of the actual expensesclaimed i.e. 3,16,021/- under thishead which comes to Rs. 31,602/-.Accordingly, this ground of appeal is partly allowed. (v) Other staff welfare expenses - Rs. 23,36,185/- This amount was disallowed by the Assessing officer on the ground that these expenses had no connection with the business of Company. As per details filed before the A.O., the other staff welfare expenses were found to have been given to the employees tea and snacks within office and factory premises, stitching of official uniform, subsidy given to canteen where employees get meal during working hours, drugs & chemicals bought for first-aid-treatment under OHC, expenses incurred on shifting of furniture from one quarter to other etc. I have considered the submission made by the appellant and perused the assessment order of the Ld. A.O. From the details of expenses, it is noted that the expenses met within office and factor....
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....e of brevity and on the other hand, the ld. Counsel for the assessee has defended the order passed by the ld CIT(A). 17. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. Learned Counsel has argued before us that all the expenses incurred under the head Welfare Expenses are related to employees who work for the organization and therefore, these expenses are business expenditure. The ld Counsel has also argued that gift to employees is a kind of incentives related to their performance which reflects from progress of the company and increase in production as per policy of the company. In respect of other staff welfare expenses, it has been submitted that these expenses are tea and snacks within office and factory premises, stitching of official uniform, subsidy given to canteen where employees get meal during working hours at concessional rate, reimbursement of school fees to workers is done as per agreement with the union and all these expenses ....
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....not be any reason of disallowance by the A.O. 18. We note thatld CIT(A) has sustained 10% addition of the following expenditure: (i) Contribution to club Rs. 31,602/- (ii) Other staff welfare Exp. Rs. 2,33,618/- (iii) Other workers` welfare expenses Rs. 3,937/- We note that the AO could have ventured into estimation only after rejecting the books of accounts of the assessee u/s 145(3) and thereafter by best judgment assessment u/s 144 of the Act. Here in this case, the AO has not passed any order u/s 144 of the Act. The AO thus without rejecting the books of account of the assessee has gone for estimation on suspicion and conjectures that the assessee may be inflating its expenses. While scrutinizing the expenditure if the expenses claimed are not having any nexus to the business of the assessee or if there is deficiency in the vouchers or there is no bills supporting the incurrence of an expenditure, at the most expenses to the extent that are not supported by the vouchers can be held to be non-genuine and can be disallowed by the AO; and item-wise the AO could have disallowed the expenditure rather than going for adhoc disallowance of percentage b....
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....nvironmental Commission, High Tech Publishing Ltd., Annual MembershipSubscription to National Safety Council, AnnualSubscription Fee to Alkali Manufacturers Association, Chemical Weekly, Coal Consumer Association of India, Centax Publication Pvt. Ltd. - for Excise Law & ST Review, patron membership of Indian Chemical Council, National Safety Council - Jharkhand Chapter - Membership, Institute of Economic Studies, Labour Law Journal, Membership - Indian Economic Development Research Association, Nandini Chemical Journal etc. It is also noted that if expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. But if it is made for running the business or working it with a view to produce the profits, it is a revenue expenditure. The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure. In view of the tests laid down, it was held that amount expended on subscription fee cannot be termed as a capital expenditure. It is also noted that in view of the ....
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....certificate. I have considered arguments of the appellant and perused material available on record. It is noted that the assessee has claimed Rs. 7,06,311/- as expenses for procuring ISO 9000-2000 certificates for meeting the requirement of the clients. This is being the periodic exercise to maintain international quality standards and international acceptance and demand in the product/services, the expenses thereon are revenue in nature. The AO however did not agree with the claim of the assesseeand held that the expenses incurred towards ISO 9000 certification were sort of patent or copyright which are intangible assets and therefore any expenses incurred thereof are capital expenditure and required to be capitalized. The AO accordingly disallowed the claim of the assessee and added the same to the total income of the assessee. It is also noted that the expenses of ISO certificates are in the nature of regular business expenses and to meet with the market demands of recognition as to the standard quality material not bringing in any specific capital asset and regular and necessary expenses of such nature surely fall under revenue head and cannot be treated as separate capital ass....
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.... which we have already noted in our earlier para and the same is not being repeated for the sake of brevity and on the other hand the ld. Counsel for the assessee has defended the order of theld CIT(A). 24. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. Learned Counsel has argued that the expenses are related toInsurance guide for Material Dept, and for MD office, News papers for various dept., taxman's Ready reckoner, Income tax Act, Income Tax Rules, legal books for Co's work etc. these expenses are purely of revenue nature. Regarding books and periodicals the ld Counsel has submitted that these expenses are related to books and periodicals purchased like insurance guide for material department and for MD office, newspapers for various department, taxman's ready reckoner, Income Tax Act, Income Tax Rules, Legal books for Company's work etc and these expenses are purely of revenue nature. As ISO/WCM expenses is concerned, the ld Counsel....
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....eforms, labour engaged, firm making charges, housekeeping for AdityChikitshalaya, Indian Chemical Counsel, charges for making video film, gardening work etc. and not specific details had been furnished and merely saying that expenditures had been incurred for social reforms, infrastructural development, watershed development, programme coordination etc therefore AO took the view that assessee had not discharged its onus of showing that expenditure has actually been incurred or not and even if incurred whether it is for the purposes of the business or not. The Ld. A.O. had also observed that the assessee company was incurred expenditure through the trust named "Jan Seva Trust", but on perusal of the records it was observed by A.O. that this trust is a separate entity altogether which had received registration u/s 12A, hence, any expenditure on this account for which work was carried out by a trust should actually be a donation in the hands of the assessee company and not business expenditure. The Ld. A.O. keeping in view of these facts, had disallowed expenditures namely; gardening/horticulture expenses - Rs. 8,52,261/-, gift to others - Rs. 1,52,430/-, contribution to rural develop....
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...., the disallowance made by the Ld. A.O. cannot be sustained in appeal and directed to be deleted. (ii) Gift to others - an addition of Rs. 1,52,430/- This amount was disallowed by the Assessing officer on the ground that these expenses had no connection with the business ofCompany. As per details filed before the A.O., the gifts were found to havebeen given to the others being customers on the eve of Diwali and republic day. I have considered the submission made by the appellant and perused the assessment order of the Ld. A.O. From the details of expenses, it is noted that actual expenses amounting to Rs. 1,52,430/- were incurred by the assessee as gift to others include sweets and dry fruits distributed among customers, suppliers and other business associates on occasion of Diwali and Republic Day. On careful reading of Appellant submission and assessment of need of these facilities which has been incurred for employees of the appellant I am of the opinion that it would be fair and reasonable if addition made by the Ld. A.O. is restricted to 10% of the actual expenses claimed i.e. 1,52,430/- under this head which comes to Rs. 15,243/-. According....
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....idental and ancillary for running a factory in such a remote location. On careful reading of Appellant submission and assessment of Ld. A.O. it is noted that need of these facilities which has been incurred for employees of the appellant I am of the opinion that it would be fair and reasonable if addition made by the Ld. A.O. is restricted to 10% of the actual expenses claimed i.e.20,42,017/- under this head which comes to Rs. 2,04,202/-. Accordingly, this ground of appeal is partly allowed. v. Guest House expenses &Community Welfare - This amount was disallowed by the Assessing officer on the ground that these expenses had no connection with the business of Company. As per details filed before the A.O., the expenses incurred on guest house expenses & community welfare expenses. I have considered the submission made the appellant and perused the assessment order of the Ld. A.O. From the details of expenses, it is noted that actual expenses amounting to Rs. 3,55,343 & Rs. 1,33,188 were incurred by the assessee to provide guest house & community welfare who may stay and take food. On careful reading of Appellant submission and assessment of Ld. A.O....
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....penditures are not altruistic and philanthropic in nature and are wholly and exclusively for business purposes. In respect of the addition of gardening / horticulture expenses, the ld Counsel has argued that the company is engaged in production of hazardous chemicals hence, maintaining a green belt in and around the factory premises becomes essential. The company is also an ISO 9000/OHSAS 18001 certified company which requires neat and green environmental around the factory premises and therefore, the company maintains garden, do plantation etc in the company premises for smooth and healthy environment at the work place. Regarding expenses under the head gift to others, the ld Counsel has argued before the Bench that the gift given on account of marriages of contract workmen sons and daughter. The Entertainment expenses has incurred on customers, supplier and other business associates who visits to factory premises and take snacks, food etc. in the guest house. Regarding contribution to education and health and occupational health care expenses the ld counsel has argued that factory place is naxal affected place and no provision of medical health care and schooling of children of t....
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....for a captive power plant, assessee had taken into account common expenses / overhead attributable to this unit and had not accordingly apportioned these expenses in its profit and loss account. The Ld. A.O. had also observed that the assessee had not given any valid reason for not taking into account common expenses / overheads attributable to this unit. The Ld. A.O. had also observed that the expenses like sales promotions, sales overhead expenses, business head office expenses etc. are though incurred at corporate level/office but it is for the benefit of the entire company including all its units and constituents. The Ld. A.O. had also observed that the Director's sitting fees and Director's remuneration debited in profit and loss account of the company can be attributed to all its units as they take management decision on behalf of the entire company and their administrative and managerial controls extends to all their units including units on which deduction u/s 80-IA have been claimed. In the case of Director's remuneration, the assessee company had apportioned in the case of captive power plant. In view of these discussions, the expenses were apportioned in proportion to th....
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....rrangement, the expenses are incurred specifically for chemical business, these expenses have no nexus with the power and steam units, therefore, no portion of this expenditure is allocated to power generating unit and these expenses are not in the nature of common corporate expenditure incurred for the benefit of all the units. Hence, reallocation done by A.O. on this account is erroneous and not justified.The stand of appellant is also supported by the judgment of Hon'ble Calcutta High Court in the case of Tide Water oil co (India) Ltd Vs CIT, 353 ITR 300in which it was held that while directing that expenses incurred at Corporate office essentially for the eligible unit should be deducted, specifically observed that no other expenditure at the corporate level which is remotely or indirectly related should be taken into consideration andCIT Vs Hindustan Lever Ltd Madras High Court ITA No 219 of 2006 where The Madras High Court held that Common head office administrative expenditure necessary for running of the business and therefore, cannot be apportioned to the individual units before computing the deductions u/s 10B, 80HH 80I of Income Tax Act, 1961. In this regard it is noted ....
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....gh the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. Learned Counsel has argued that the company maintains separate books of accounts for 80-IA plant and other plants and all the expenses related to concerned plant are booked appropriately in the books of the same plant and these books of accounts are audited by the Statutory Auditors and certified by the management of company. It has also been argued that the apportionments of certain expenses made by the learned A.O. between 80-IA and other plants is totally baseless and assumptive therefore another opportunity should be given to the assessee to explain the allocation of expenses to Power plant unit before the assessing officer. We have gone through the order of ld CIT(A) and note that there is no any infirmity in the order passed by him. That being so, we decline to interfere in the order passed by the ld. CIT(A), his order on this issue, is hereby upheld and the ground of appeal raised by the Revenue is dismissed. The Cross objection filed by the ass....
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.... price by reducing the electricity duty has been discussed and adjudicated in favour of assessee. The ld. Counsel submitted that the present issue is squarely covered by the above said order of the Tribunal, a copy of which is also placed before the Bench. 42. The ld. DR relied upon the orders of the authorities below. 43. We see no reason to take any other view of the matter then the view so taken by the division bench of this Tribunal in assessee's own case vide order dated 18.11.2019. In this order, the Tribunal has inter alia observed as under: "11. Apropos Ground No.8 of appeal of the assessee, briefly stated the relevant facts of the case are like this. During the assessment proceedings, the Assessing Officer noticed that the assessee claimed deduction u/s. 80- IA for its unit of a captive power plant amounting to Rs. 16,58,48,283/- (restricted to Rs. 13,47,08,499/-) for assessment year 2006-07. The AO also observed that the assessee for its power plant had taken sale value amounting to Rs. 61,39,17,000/-, which had been arrived at by taking the tariff rate of JSWEB @ Rs. 3.6158/ unit. Therefore, the Assessing Officer required the assessee to give reason/justif....
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....f Hon'ble Chhatisgarh High Court in the case of CIT vs. Godawari Power &Ispat Ltd, order dated 2.8.2013 (2014) 42 taxmann.com 551 (Chhatishgarh). 14. Replying to above, ld CIT DR contended that the CIT(A) has granted relief to the assessee without any basis and the Assessing Officer was right in making the addition by observing that the cost of production of power has to be assumed at Rs. 2.5 per unit and the same may be revised later, if the assessee furnishes details of its cost of production of power along with necessary evidence. Ld CIT DR submitted that the AO was right in making the addition of the amount of difference between the sale consideration which reduces the profit claimed u/s. 80IA of the Act by the same amount. Ld CIT DR also submitted that Ground No.3 of appeal of the revenue for assessment year 2006-07 has to be taken into consideration while deciding Ground No.8 of appeal of the assessee. Ld CIT DR pressing said Ground No.3 of revenue submitted that the assessee has calculated the sales of its steam boiler unit at production cost + 20% mark up but in the case of its power plant instead of taking the same logic, the assessee has taken sale value....
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.... in the case of Graphite India Ltd (supra) and submitted that after considering all relevant decisions of Hon'ble High Court including the decision of Hon'ble Gujarat High Court in the case of CIT vs. Shah Alloys Ltd in Tax Appeal No.2092 of 2010 dated 22.11.2011, it was held that the market value of electricity which comprises of a component of electricity duty has to be taken into consideration for determining the market value for a consumer and out of electricity charges calculated by State Electricity Board, the duty is passed to the Government and this would make no difference. Therefore, not only the relief granted by the CIT(A) should be upheld but part addition confirmed by the CIT(A) pertaining to the electricity duty should also be allowed to the assessee. 16. On careful consideration of the rival submissions, first of all, we find it appropriate and necessary to reproduce the relevant operative para 9.4 of the CIT(A)'s order, wherein, he has allowed part relief to the assessee and partly confirmed the difference of Rs. 33,95,748/- between the sale price as per books and as per working noted in the CIT (A)'s order to calculate the profit earned by 80IA eligible u....
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....ction, 'market value', in relation to any goods or services means the price of that such goods or services would ordinarily fetch in the open market." As per the above sub-section, it is clear that in case of transfer of goods and services between eligible unit and other businesses of the assessee, the transfer pricing of goods and services for computing deduction under section 80-IA of eligible business should be market value of goods and services at which the goods or services can ordinarily be sold in the open market. It is noted that Jharkhand State Electricity Board in the State of Jharkhand authorized by the State Government to supply power to various consumers in the state and appellant company is too as industrial consumer is buying power from JSEB at a rate of 3.61 per unit. It is also noted that the appellant has argued that had it not been generating power from its captive power plant for its own consumptions, the same power would have been purchased from JSEB at a rate of 3.61 per unit. Further, it is also noted that for adaptation of cost plus mark up as transfer pricing for power, the A.O. has relied on the decision of Bombay High Court in the case of....
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.... of the power supplied to the Steel Division should be computed considering the rate of power to a consumer in the open market and it should not be compared with the rate of power when it is sold to a supplier as this is not the rate for which a consumer the Steel Division could have purchased power in the open market. In our opinion, the A.O. committed an illegality in computing the market value by taking into account the rate charged to a supplier: it should have been compared with the market value of power supplied to a consumer. It is also noted that in the case of CIT Vs. Kanoria Chemicals & Industries Ltd the Hon'ble Kolkata High Court in ITA No.58 of 2013 has held "we find that the price at which State Electricity Board sells electricity to industrial consumers is representative of the price that electricity would ordinarily fetch in the open market and i.e. the price has been adopted by the assessee for the electricity generated by the eligible business transferred to its other business for the purpose of computation of profits and gains of the eligible business in terms of Section 80-IA(8) of the Act." In this regard it is noted that the Hon'ble M....
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....roduction of power but no details have been furnished by the assessee company. Hence, the cost of production of power is assumed at Rs. 2.5 per unit and the same may be revised later if the assessee furnishes details of its cost of production of power alongwith necessary evidence. The sale consideration of power is therefore shown as below: Sale value of power as per P&L a/c of Captive Power Plant: Rs. 61,39,17,000/- Tariff rate of JSEB:-361.58 paise/unit(net energy rate applicable to assessee company) Therefore total unit produced : - Rs. 16,97,87,322/- Therefore correct sale consideration of power :-16,97,87,m322 x(2.5+20%) = Rs. 50,93,61,966/- The difference of Rs. 10,45,55,034/- (Rs. 61,39,17,000 - Rs. 50,93,61,966) between the sale consideration reduces the profit claimed u/s.80IA by the same amount and hence the same is added back to the total income of the assessee company." 18. In view of above observation of the AO, it is clear that even at the time of framing of assessment order and making addition, the AO was not sure about the cost of production of power and he assumed the same at Rs. 2.5 per unit with a rider that same may be revised later if....
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....ectricity Board has to be taken into consideration while calculating deduction for 80IA eligible unit and electricity duty has no relevance for calculating the same. On the basis of foregoing discussion, we reached to a logical conclusion that the CIT(A) was right in granting part relief to the assessee but was not correct in confirming part addition considering the factum of 2 paise per unit for working out eligible profits u/s. 80IA of the Act. Consequently, the findings of the CIT(A) granting relief to the assessee are confirmed and the addition partly confirmed pertaining to the electricity duty being devoid of merits is directed to be deleted. Hence, Ground No.8 of the assessee is allowed and Ground No.3 of revenue is dismissed." 44. As the issue is squarely covered in favour of the assessee by the decision of Co-ordinate Bench in assessee's own case (supra) in I.T.A. Nos. 116 & 117/Ran/2015 for A.Ys. 2006-07 & 2007-08, and there is no change in facts and law and the Revenue is unable to produce any material to controvert the above said findings of the Co-ordinate Bench. Therefore, respectfully following the decision of Co-ordinate Bench we allow grounds of appeal raised by....
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....ocated out of profits derived from units claiming deduction under Section 80IA and 80IB of the Act. b) The Revenue is unable to show why the adoption of the reasoning to disallow allocation of profits of Section 10B units to head office expenses cannot be extended to profits of Section 80 IA and 80 IB units. c) The Appeal of the Revenue from the order of the Tribunal for assessment year 2002-03 to this Court being Income-Tax Appeal No. 311 of 2015 against the same Respondent-Assessee on the issue of allowing head office expenses to profits derived under Section 10B of the Act was disallowed today by a separate order in Income Tax Appeal No.311 of 2005. In the absence of the Revenue's not being allowed to show why the same logic would not extend to units claiming deduction under Section 80IA and 80IB of the Act, we are following the same. d) In the above view, this question does not give rise to any substantial question of law. Thus, not entertained. 5. Re. Question 4:- a) Mr. Tejveer Singh very fairly states that the issue herein was also raised by the Revenue in its Income Tax Appeal No. 311 of 2015 in respect of the same Respondent....
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....apital in nature. The assessee argued before the AO, that installation of isolator breakers of improved rating are in the nature of current repairs and maintenance. The installation of two lighting transformers has been done to make it suitable for smooth operation of the plant. However, the ld AO was of the view that the all above expenditures were indicative of either used for enhancement of the capacity of the plant or used for enhancement of quality of production of the plant. Therefore, the said expenditures cannot be treated as revenue in nature and socannot be allowed as 'Repair & Maintenance Expenses', therefore, the said expenditures were disallowed and added back to the income of the assessee. 52. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the addition made by the Assessing Officer observing the following: "As regards addition made by the Ld. A.O. on installation of isolator breakers of improved rating of Rs. 4,41,122.75 and installation of two lighting transformers of Rs. 2,91,522/-. It is noted that these expenses were incurred on repair and maintenance of building wi....
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....fore, we direct the assessing officer to treat the above mentioned expenses as revenue expenditure. Hence, we allow the grounds raised by the assessee and dismiss the grounds of appeals raised by the Revenue. 56. Summarized ground No. 2 raised by the assessee reads as follows: 2.Ground No.11 Ld. CIT(A) erred in disallowing donation of Rs. 1,51,000/- paid to Shri DehatiSthapana Trust. The donation was claimed by assessee u/s 80G(V) of the Act. 57. At the outset, ld. Counsel informs the Bench that the assessee does not want to press ground No. 11 in ITA No. 126/Ran/2015 for A.Y. 2009-10, therefore, we dismiss this ground No. 11 raised by the assessee as not pressed. 58. Before parting, it is noted that the order is being pronounced after 90 days of hearing. However, taking note of the extraordinary situation in the light of the Covid-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the decision of the Co- ordinate Bench of the Mumbai Tribunal in the case of DCIT vs JCB Limited in ITA No 6264/Mum/2018 and ITA No. 6103/Mum/2018 for A.Y. 2013-14 order dated 14.05.2020. 59. In the result, Assesse....