TaxTMI 
TaxTMI 
2020 (11) TMI 871
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....duction under sections 801/ 801A of the Income-tax Act, 1961 ("the Act") and not at various customer terminals, as claimed by the appellant following the order of CIT (A)for the preceding assessment year. 1.1 That on facts and circumstances of the case and in law, the CIT(A) erred in holding that the activities undertaken by the appellant at its customer terminals did not constitute "manufacture or production of any article or thing", so as to be eligible for deduction under sections 801, 80IA and 80HH of the Act. 1.2 That on the facts and circumstances of the case and in law, the CIT(A) erred in not appreciating that the various activities/ processes undertaken by the appellant, including removal of impurities, condensate and moisture and for regulating temperature and pressure at various customer terminals, as part of mandatory contractual obligations, in order to render lean gas in usable state and tradable condition, constituted "manufacture"/ "production" of processed "Lean Gas". 1.3 That on the facts and circumstances of the case and in law, the CIT(A) erred in holding that the aforesaid activities undertaken by the appellant at customer terminals w....
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.... CIT(A) erred on facts and in law in not appreciating that the claim of the appellant should have been allowed in the relevant assessment year as the same has been offered to tax in assessment year 2007-08 and also accepted by the assessing officer. 3. Briefly stated the facts of the case are that the appellant is engaged in the business of production/processing transmission and distribution of various gases. The appellant has set up and operates gas pipeline running /located in north western India known as HBJ pipeline. The appellant acquires rich natural gas at Hazira which is transmitted to its 2 LPG plants located at Vaghodia (Gujarat) and Vijaipur (MP) and various customer terminals. 4. The appellant claimed deduction u/s 80-IA and 80HH on production of LPG and Lean Gas undertaken at LPG plants and various customer terminals by treating the same as separate and independent units. The deduction claimed is as under :- S. No. Particulars Amount 1. Deduction under section 80HH 92,61,48,000 2. Deduction under section 801 3,69,27,000 3. Deduction under section 80IA 114,26,46,000 Total Rs. 210,57,21,000 5. The aforesaid cla....
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....cessed Lean Gas shall be considered from the year of setting up of the LPG Plant and not the relevant customer terminal at which such processed Lean Gas is supplied to the customer. Extensive processing activities undertaken by the assessee at the customer terminals to make lean gas and natural gas marketable and fit for use, clearly constitute "manufacture ". The contention of the assessee is that the claim of deduction made by the assessee under section 80I/80IA/80HH are genuine as the similar claims have been allowed in the earlier years by the revenue. Deduction allowed in earlier years cannot be denied in subsequent years. Since deduction under section 80IA of the Act in respect to profit derived from eligible units has been allowed by Revenue till assessment year 1995-96, the same cannot be denied subsequently. The Ld. AR made reference to the decision of the CIT(A) in assessee's own case for the assessment year 1994-95. Therefore, the CIT(A) has not taken into account the revenue's stand in the earlier years and deviated from the same without any substantial reasons or evidence on record. Thus, the claim of deduction made by the assessee under section 801/801A/80HH are genui....
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...."19. We have heard both the parties and perused all the relevant material available on record. As regards to Misc. Income, the assessee has produced all the relevant evidence as regards to how the scrap sale is derived from the. industrial undertaking. As regards to interest on fixed deposits, various decisions of the Hon 'ble High Court categorically held that the deduction in respect of interest on fixed deposits under Section 80IA is allowable. The revenue has not pointed out as to why the same should be denied to the assessee. The case laws given by the Revenue in fact reiterate the stand of the assessee. Hence, it is pertinent to remand back the matter to the file of the Assessing Officer and we direct the Assessing Officer to allow deduction in respect of interest on fixed deposits under Section 80IA of the Act. So far as interest on employees' loans and advances is concerned, the interest on loan provided to employees in our opinion is inextricably linked to the business of the assessee and constitutes business income eligible for deduction. As regards to interest on customer outstanding is profit derived from eligible undertakings and entitled for deduction under Section 80....
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....to Rs. 18,13,13,311. It is the say of the counsel that the computation of Rs. 3,01,17,428/- which was alleged by the AO as reimbursement of cost is factually incorrect. The counsel once again stated that the actual reimbursement of Rs. 2,68,16,119/- had already been offered and nothing further remained to be taxed. Per contra Ld. DR strongly supported the findings of the AO but could not say anything about the error in the calculation made by the AO. 20. We have given a thoughtful consideration to the order of the authorities below. The Asset Transfer Agreement which is at page 548 of the paper book and on particular page 553 the total value of assets to be transferred is mentioned which is Rs. 18,13,13,311/-. We further find that on this total value appellant was issued shares of Rs. 10/- each at 18131331. We have carefully considered the computation of additional reimbursement computed by the AO at Rs. 3,01,17,428/-. We find that the AO has simply proceeded by erroneous figures without applying his mind. The actual reimbursement of cost of Rs. 2,68,16,119/- has already been offered therefore in our considered opinion nothing further remained to be added more particularly on er....
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....the year of waiver for asstt. Year 2007-08. The Counsel vehemently stated that so far as the year under consideration is concerned there was crystallized liability and therefore the claim of Rs. 13.07 crores as guarantee fee is allowable. Per contra the Ld. DR strongly supported the findings of the AO. 25. We have given a thoughtful consideration to the orders of the authorities below. It is not in dispute that the C&AG made adverse remark and pursuance to which the assessee created the liability. In our considered opinion the assessee has rightly created the liability as such liability was properly ascertainable. We are of the considered view that merely because the assessee was pursuing the matter with the Ministry of Petroleum and Natural Gas the same can not make the liability a contingent liability. Moreover this is not an estimated liability but the same is in line with the office Memorandum F-12 (1)-B/SB/92 dated 4.6.1993 by which the Central Government has instructed for levy of guarantee fee @ 1.2% per annum on the outstanding amount of loan. As per the said OM the guarantee fee was to be levied on the date of guarantee and thereafter on first day of April every year. C....
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....case and in law Ld. CIT(A) has erred in directing the Assessing Officer to allow the investment allowance after verifying only part aspects of the issue. 7.1. On the facts and circumstances of the case and in law Ld. CIT(A) has eerred in directing the Assessing Officer to allow the investment allowance after verifying amount of reserve only without appreciating that assessee's claim had been rejected on more than one ground,which have been ignored by him. 8. The appellant craves leave to add to, alter, amend or vary from the above grounds of appeal at or before the time of hearing. 27. The grievance raised vide ground No. 1 to 4 are identical to the grievance raised by the assessee vide ground No. 1 to 4 of its appeal. For our detailed discussion in ITA No. 4657/Del/2014 (supra) ground No. 1 to 4 are dismissed. 28. The facts relating to ground No. 5 are that during the year under consideration the assessee has incurred Horticulture expenses amounting to Rs. 10.10 crores which comprises of expenditure incurred on planting on trees ,maintenance of lawns and areas in the close vicinity of the offices / plants of the appellant in accordance with the mandate of t....
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....im in the first round of litigation. 35. When the matter travelled up to the Tribunal the Tribunal in principle agreed with the allowability of deduction u/s 32A on the enhanced cost of assets and set aside the issue holding as under :- 13. From the record, we found that the pipeline in respect of which enhanced claim of investment allowance was made was set up in the AY 1989-90. Even though the assessee has claimed investment allowance with respect to the original cost of plant & machinery, which was not declined, but due to inadequacy of profit, the assessee could not take the benefit of the same. During the AY 1997-98 under consideration. the claim of investment allowance was not in dispute, but the issue in dispute was only with respect to increase in claim of investment allowance due to additional bill raised by the supplier of pipeline and to which the assessee agreed to pay. 14. There is no dispute to the well settled legal proposition that any cost incurred towards plant & machinery including enhanced cost payable due to revision in cost or due to exchange fluctuation, is required to be considered while determining the actual cost and with reference to ....