TaxTMI 
TaxTMI 
2022 (2) TMI 376
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....ady been disallowed in the past under clause (c), (d) and (e) of section 43B, consistent with the Department's stand. 1.2 The CIT (A) ought to have held that in the event the Department's stand is accepted by the ITAT in earlier years, then deduction of amounts paid or written back amounting to Rs. 1,38,78,153/- should be allowed in the previous year. 2. Provision for bad and doubtful debts 2.1 The CIT (A) erred in upholding the action of the AO in disallowing amount of Rs. 1,20,11,696/- towards provision for bad and doubtful debts. 2.2 The CIT (A) failed to appreciate that the provisions of Sec. 36(1)(vii) are not applicable since the amount of provision made represents identified bad and doubtful debts and is not on estimate basis. 3. Disallowance of Club membership fees The CIT (A) erred in not allowing club membership fees of Rs. 16,21,025/- paid to Cricket Club of India as deduction. 4. Interest received from Income Tax Department: 4.1 The CIT (A) erred in upholding the action of the AO in taxing interest of Rs. 25,07,53,088/- allowed by the Department. 4.2 The CIT (A) failed to appreciate that no....
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....llowing deduction u/s. 80IA on gain arising on sale of machinery amounting to Rs. 4,34,17,852/-. 7.2 The CIT (A) erred in holding that the gain arising on sale of machinery is notional gain and is not actual profit directly originating from the main business of the appellant. 8. The appellant prays for the cost of this appeal in view of section 254 (2B) of the LT. Act." The appellant craves leave to add to, alter, amplify or delete any of the above ground(s) before or at the time of hearing. The appellant respectfully prays that relief prayed for in the abovementioned grounds be granted and that the appellate order of the learned CIT (A) be modified accordingly. 3. Assessee raised following additional ground in its appeal: - "1. On the facts and circumstances of the case and in law, the Appellant prays that the ("AO") be directed to i) Exclude from taxable profits, the sales tax exemption benefit of Rs. 69 crores, which is included in Sales and which is taxed in the assessment order as part of profits of the business; and ii) To treat the same as capital receipt not chargeable to tax. 4. Assessee further raised fo....
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....'s own case, copy of which was placed on record. We find that similar issue was considered by the Tribunal in A.Y. 2000-01 vide order dated 9-10-2013 wherein the ground taken by the assessee was dismissed as the same has become infructuous. It was found by Tribunal that it is an alternative plea which relates to A.Y. 1993-94 decided by the Tribunal in assessee's favour. The appeal filed by the Department has been dismissed by the Tribunal vide order dated 20-12-2001. As the facts and circumstances during the year under consideration are para materia wherein appeal of department in earlier year was dismissed by the Tribunal, therefore, ground taken by assessee for disallowance during the year has become infructuous. The view taken by the Tribunal in A.Y. 2000-01 is respectfully followed, ground of the assessee becomes otiose and is accordingly dismissed. 7. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 2000-01 is respectfully followed, ground raised by the assessee is accordingly dismissed. 8. With regard to Ground No. 2 which is in respect of Write off of Bad and Doubtful Debts, Ld. AR of the asses....
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....balance-sheet is shown as net of the provisions for impugned debt. However, what is being insisted upon by the Assessing Officer is that mere reduction of the amount of loans and advances or the debtors at the year-end would not suffice and, in the interest of transparency, it would be desirable for the assessee-Bank to close each and every individual account of loans and advances or debtors as a pre-condition for claiming deduction under Section 36(1)(vii) of 1961 Act. This view has been taken by the Assessing Officer because the Assessing Officer apprehended that the assessee-Bank might be taking the benefit of deduction under Section 36(1)(vii) of 1961 Act, twice over. [See Order of CIT (A) at Pages 66, 67 and 72 of the Paper Book, which refers to the apprehensions of the Assessing Officer]. In this context, it may be noted that there is no finding of the Assessing Officer that the assessee had unauthorisedly claimed the benefit of deduction under Section 36(1)(vii), twice over. The Order of the Assessing Officer is based on an apprehension that, if the assessee fails to close each and every individual account of it's debtor, it may result in assessee claiming deduction twic....
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....the Head Office Accounts. Lastly, in any event, Section 41(4) of 1961 Act, inter alia, lays down that, where a deduction has been allowed in respect of a bad debt or a part thereof under Section 36(1)(vii) of 1961 Act, then, if the amount subsequently recovered on any such debt is greater than the difference between the debt and the amount so allowed, the excess shall be deemed to be profits and gains of business and, accordingly, chargeable to income tax as the income of the previous year in which it is recovered. In the circumstances, we are of the view that the Assessing Officer is sufficiently empowered to tax such subsequent repayments under Section 41(4) of 1961 Act and, consequently, there is no merit in the contention that, if the assessee succeeds, then it would result in escapement of income from assessment." 10. Respectfully following the said decision, we notice that assesse has charged the unrecovered portion to the profit and loss account and reduced the amount in the debtors balances, therefore the facts are exactly similar to the facts in the above case, accordingly, we allow the claim of the assessee. We order accordingly. 11. With regard to Ground No. 3 whic....
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....in ITA No. 1523/Mum/1997 vide para 62 as under;- "We have heard the parties and considered the rival submissions. These refunds have been granted to the assessee in the year under consideration and therefore they would partake the character of income of the assessee. If however, any refund has been found to be not refundable to the assessee and consequently the interest granted is withdrawn the same would not partake the character of income. We accordingly direct the Assessing Officer to reduce from the taxability of the aforesaid interest granted to the assessee, the amount which has been withdrawn subsequently. We direct accordingly." 8. It was argued by the ld. A.R. that benefit of interest so allowed by the department was subsequently withdrawn as a result of the appellate orders should be given to the assessee and the interest subsequently withdrawn should not be taxed and for this, reliance was placed on the decision of the Tribunal in the case of Avada Trading Co. (P.) Ltd. vs. ACIT (2006) 100 ITD 131. 9. We have considered the rival contentions. As far as the taxability of interest amounting to Rs. 13,64,09,609/- is concerned, the same is assessab....
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....round has been raised by the assessee first time in view of the decision of the Hon'ble Supreme Court; therefore, it requires verification and examination at the level of the AO. Accordingly, we remit this issue to the record of the AO to consider and decide the same as per law after considering the contention of the assessee and after giving reasonable opportunity of being heard to the assessee. " 16. In view of the decision of honourable Supreme Court in case of ACG Associated Capsules reported in 67 DTR (SC) 205, the Explanation to section 80 HHC to be applied on net interest and not on gross interest. Accordingly, we direct the AO to apply clause (baa) in respect of interest receipt by following the decision of honourable Supreme Court (supra). We accordingly direct the A.O. to exclude the excess of interest income over interest expenditure from the eligible profit of the company while computing deduction u/s 80HHC of the Act." 19. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 2001-02 is respectfully followed, we order accordingly. 20. With regard to Ground No. 5.4 & 5.5 which are in r....
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....he view taken by the Tribunal in A.Y. 2001-02 is respectfully followed, we accordingly dismiss this ground. 26. With regard to Ground No. 6.1 and 6.2 which is in respect of Appropriation of HO expenses in computing deduction u/s. 80-O, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this ITAT. Ld. DR has fairly accepted the submissions of the Ld.AR. 27. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y.2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "25. The assessee has taken additional ground with regard to appropriation of HO expenses in computing deduction u/s 80-O of the Act amounting to Rs. 3,18,000/-. 26. The issue has been decided in favour of the assessee by the Tribunal for the assessment years 1996-97, 1997-98, 1994-95 & 1995-96. It was further brought to our notice that no appeal has been filed by the Department against the decision of the Tri....
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....ed opinion that there is no necessity for allocating the head office expenses to the units claiming deduction u/s. 8OHH, 801, 80M and 80-0. The order of the CIT(A) on this issue is accordingly set aside and the grounds raised by the assessee are allowed. 29.2 Respectfully following the aforesaid decision of the Tribunal, these grounds, namely 27 to 30 A, are allowed". Respectfully following the earlier order of the Tribunal, we decide this issue in favour of the assessee." 28. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 2001-02 is respectfully followed, we order accordingly. 29. With regard to Ground No. 6.3 which is in respect of HO expenses can only be certain percentage of the gross receipts eligible for deduction u/s.80-O and not of the total turnover of the division, Ld. AR of the assesse submitted that this is an alternate plea, since we already allowed the issue raised by the assesse in ground nos 6.1 and 6.2, this becomes infructuous, accordingly not dealt with and kept open. 30. With regard to Ground No. 7 which is in respect of deduction u/s. 80-IA on gain arising o....
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....ct and does not lay down any principle difference from CIT vs. Sterling Foods (1999) 153 CTR (SC) 439 : (1999) 237 ITR 579 (SC). In fact, in Pandian Chemicals Ltd. (supra) reliance has been placed on Cambay Electric Supply Industrial Co. Ltd. vs. CIT 1978 CTR (SC) 50 : (1978) 113 ITR 84 (SC) and the decision seems to suggest, as we have held above, that the expression 'derived from an industrial undertaking' is a step removed from the business of the industrial undertaking." 5. Having regard to the aforesaid judgments we are not inclined to entertain the above appeals, as there is no substantial question of law involved in both the appeals. In the result, both the appeals stand dismissed." 33. Since the issue is similar, respectfully following the above ratio we are inclined to allow the ground raised by the assesse. 34. Coming to additional grounds, Ld. AR submitted that additional grounds raised by the assessee are purely legal issues, the facts there off were already on record. Failure to raise these grounds originally was neither deliberate or contumacious. It is submitted that since these additional grounds were purely legal issues, placing reliance on t....
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....afresh after proper verification. It is needless to say that assessee may be given proper opportunity of being heard. 39. With regard to additional Ground No.2 which is in respect to Royalty and interest on royalty u/s. 43B of the Act, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this ITAT. Ld. DR has fairly accepted the submissions of the Ld.AR. 40. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y.2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "The next grievance relates to the disallowance of royalty and interest on royalty u/s 43B of the Act treating it as tax. The issue is now settled by various orders of the Tribunal in assessee's own case for assessment years 1995-96 to 2000-01. A similar issue was considered by the Tribunal in the assessee's own case in A.Y. 1999-2000 in ITA No. 5631/M/2002, wherein we find that the Tribunal has followed its earlier or....
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.... law, the CIT(A) erred in deleting the disallowance of Rs. 2,19,82,299/- made on account of exchange rate fluctuation loss, relying upon the orders of the CIT(A) in the assessee's own case for the AYrs. 1998-99, 1999-2000, 2000-01 & 2001-02 which have been contested by the department in further appeal before the ITAT." 6. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of Rs. 2,88,46,944/- being interest expenditure claimed u/s.36(1)(iii) relying upon the orders of the CIT(A) in the assessee's own case for the AYrs. 1995-96 to 2001-02 which have been contested by the department in further appeal before the ITAT." 7. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of deduction of Rs. 9,15,068/- on account of debenture issue expenses relying upon the CIT(A)'s orders in the assessee's own case for the AY'Rs. 1998-99, 2000-01 & 2001-02 which have been contested by the department in further appeal before the ITAT." 8. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow ....
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....ntention that the expenditure was not for the purpose of securing any assets or advantage of enduring nature but was for the purpose of removing difficulty in order to enable the assessee to carry on the business in a more beneficial manner and to get rid of a disadvantageous commercial relationship resulting from a large work force with low productivity without appreciating that the Andhra Pradesh High Court has, in the case of Vazir Sultan Tobacco Co. Ltd. (174 ITR 689), observed that 'where the object of incurring an expenditure is to effect a capital restructure as a result of which certain incidental advantage flows, the expenditure will be of capital nature'." 12. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of Rs. 2,03,13,851/-, being expenses incurred for making advertisement film, relying upon the order of the CIT(A) in the assessee's own case for the AYr. 2001-02 which has been contested by the department in further appeal before the ITAT." 13. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of professional fees of Rs. 91,85,500/- ....
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.... ITAT." 18. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the interest charged u/s.234D holding that at the time of passing order w/s.143(3) dtd. 16.2.2004, the Assessing Officer cannot legally charge interest from 23.5.2003 to 16.2.200. as on 16.2.2004 there was no existence of any refund and on 23.5.2003 (date of issue of refund section 234D was not in the statute and the same has been inserted w.e.f. 1.6.2003 ignoring the basic condition under the provision that once a regular assessment is completed on or after 1.6.2003, the provisions of section 234D become operative and interest becomes chargeable from the date of grant of refund u/s. 143(1) to the date of such regular assessment." 19. The appellant prays that the order of CIT(A) on the above grounds be set aside and that the Assessing Officer be restored. 20. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 43. At the time of hearing, Ld. AR submitted that all the grounds except ground Nos. 9 to 11 are covered and adjudicated by various courts and supported by the ITAT orders in assessee's own cases....
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..... 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "31. Ground No. 1 in Revenue's appeal relates to the disallowance u/s 43B of the Act which has been dealt with by the A.O. at para No. 9-9.5 of his order. The ld. CIT(A) dealt with this issue at page No. 2, para 5 of his order and deleted the disallowance by following the order of the Tribunal in earlier years. From the record, we found that the Tribunal has been consistently allowed the issue in favour of the assessee in assessment years 1990-91, 1993-94, 1994-95, 1996-97, 1997-98 & 1998-99. We further found that against the order of the Tribunal, the Department has not filed any appeal before the Hon'ble High Court in assessment years 1996-97, 1997-98, 1995- 96 & 1994-95. As the matter has been settled and the ld. CIT(A) deleted the disallowance by following the order of the Tribunal, we do not find any reason to interfere with the order of the Ld. CIT(A) deleting the disallowance made by the A.O. u/s 43-B of the Act." 49. Respectfully following the above decision, we sustain the order p....
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..... The order of the Tribunal for 2000-01 was not challenged by the Department before the Hon'ble High Court on this issue. Respectfully following the order of the Tribunal and Hon'ble High Court in assessee's own case, we do not find any reason to interfere with the order of the ld. CIT(A)." 53. Respectfully following the above decision, we sustain the order passed by the Ld.CIT(A) and dismiss the Ground No. 2 raised by the revenue. We order accordingly. 54. With regard to Ground No. 3, the brief facts are, during the relevant previous year, the Assessee received tax exempt dividend of Rs..9,58,17,268/-The investment in shares/securities, on which tax exempt dividend was received during the previous year, were made out of internal accruals and own funds. The Assessee always had sufficient capital and free reserves (non-interest bearing funds) for making investments, as under: Amount As on 31.03.2001 As on 31.03.2002 Share Capital 91.69 91.69 Reserve & Surplus 3,001.66 2,622.51 Deferred Tax Balance -- 640.50 Total 3,093.35 3,354.70 No borrowing was made, specific or general, for the purpose of making these inve....
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....lio, well dipping expenses, electrification of Gram Panchayat, distribution of material to children and rural sports, leprosy camp expenses, medical camps, balwadis, carpet weaving training, farmers training programme etc. The beneficiaries of these expenses include employees and their dependents, ex-employees and their dependents, people residing nearby plant area and other people directly and indirectly connected with the business. Such expenses help to carry out the business smoothly and secure benefit to the business. Details of such expenses was filed before the AO. During the assessment proceedings, Assessing Officer has disallowed these expenses of Rs..71,31,011/- following his own order for the A.Y.2001-02. Detailed discussion in the regard is in para 11 on page 8 of the assessment order. On appeal the Ld.CIT(A) deleted the disallowance made by the Assessing Officer following his own order for AY 1996-97 to AY 2001-02. The CIT(A) has discussed this issue in para 5.1 to 5.5 on page 3 & 4 of the order. Revenue preferred appeal against this order of the Ld.CIT(A). 59. Before us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has....
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....ussed this issue in para 6.1 to 6.4 on page 4 of the order. Revenue preferred appeal against this order of the Ld.CIT(A). 64. Before us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 65. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA. No. 4083/Mum/2003 dated 22.10.2014 held as under: - "39. Ground No. 7 pertains to exchange rate fluctuation loss on conversion of trading assets and liabilities amounting to Rs. 2,00,03,443/-. The A.O. has dealt with this issue at page 9-10, para 16-16.6and the ld. CIT(A) has dealt with this issue at page 5, para 12 of his order. The ld. CIT(A) has allowed the assessee's claim after having observed at para 12. We found that the issue has been decided by the Tribunal in assessee's own case in its favour in assessment years 1998-99 to 2000-01. Furthermore, the Department is....
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....ing the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "40. Ground No. 8 pertains to deleting of interest u/s 36(1)(iii) of the Act. The issue has been dealt with by the A.O. at page 10-11, para 18 of his order and the ld. CIT(A) deleted the same after having observed at page 5, para 13 of his order. From the record we found that the issue has been decided by the Tribunal consistently in favour of the assessee in assessment years 1993-94, 1994-95, 1996-97 to 1998-99 & 2000-01. We found that on this ground the Department is not in appeal before the Hon'ble High Court on this ground in assessment years 1996-97 to 1998-99. Respectfully following the order of the Tribunal, we do not find any reason to interfere with the order of the ld. CIT(A) deleting the disallowance of Rs. 1,45,77,507/- u/s 36(1)(iii) of the Act." 70. Respectfully following the above decision, we do not find any reason to interfere with the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly. 71. With regard to Ground No. 7, the brief facts are that the Assessee company issued 10.75% ....
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....s own case in assessment years 1986-87 to 1989-90, 1998-99, 1999-00 & 2000-01. Respectfully following the order of the Tribunal in assessee's own case, we do not find any infirmity in the order of the ld. CIT(A) deleting the debenture issue expenses." 75. Respectfully following the above decision, we do not find any reason to interfere with the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly. 76. With regard to Ground No. 8, the brief facts during the relevant previous year, the Assessee made payment of Rs. 47.86 lac towards PF and ESIS contribution after the normal due date but within the grace period allowed by the relevant Statute / Authorities. During the assessment proceedings Assessing Officer disallowed the delayed payment u/s 43B(b) of the Act on the ground that payment was made after due date. Discussion in this regard is in para 17 on page 11 of the assessment order. On appeal the CIT(A) deleted the disallowance and allowed the claim of the Assesse following the decision of Mumbai ITAT in the case of Fluid Air (India) Ltd. (63ITD 182). The CIT(A) has discussed this issue in para 10.1 to 10.4 on page 5 & 6 of the order. Reven....
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....;s contribution towards EPF, EFPF by treating the same as assessee's deemed income under section 2(24)(x) because the same should have been allowed as a deduction under section 36(1)(va) of the Act. 18. Before parting with the matter, we would like to record that a similar view has been taken by the Tribunal, Madras Bench, in the case of Madras Radiators & Pressings Ltd. (supra) where on the facts of that case it has been held that so long as the payments of PF and contribution to ESIS are made within the previous year, the same cannot be disallowed under section 43B and also cannot be considered as assessee's income under section 2(24)(x) read with section 36(1)(va). Further, in an unreported case the ITAT Calcutta Bench, in the case of Sudera Services (P.) Ltd. (supra), on which the ld. counsel relied on (copy is placed at page 65 of the paper-book), it has been held, on the facts of that case, that the provisions of section 43B should be construed in a liberal way keeping in view the Legislative intention so that absurdity and the interpretation which leads to injustice may be avoided. 19. In view of the decisions referred to in the foregoing paragraphs....
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....cturing facility located at Gwalior to two unrelated companies: (a) M/s Takshila Textiles Private Limited, 79 Mittal Chambers, Nariman Point, Mumbai (b) M/s Harshit Textile Private Limited, Swastik Chambers, Gandhi Nagar, Bhilwara 82. It was submitted before us that transaction for sale of the assets was approved by the Board of directors of the Assessee Company in their meeting held on 26.02.2002. The Assessee Company obtained necessary approvals for sale of the assets from shareholders, bankers, financial institutions. The assets were sold for Rs. 1 lakh and the amount of sale consideration has been appropriated to the sold assets in the proportion to the book value of the assets. As the sale was only sale of the assets and not sale of the undertaking as a whole, the sale has not been treated as slump sale. In view of the intense competition in the industry mentioned above the Assessee found it difficult to find buyers at a high price for the assets being sold out. In order to further facilitate the sale and to avoid any implication thereto from inter alia its workers, the assessee also agreed for making payment of Rs. 15 c....
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....as under: 1. The AO has not disputed that the financial position of the textile unit at Gwalior in the last three years were in bad shape as well as the projected position in the subsequent three years was also likely to be bad. 2. It is established that the Company is already incurring huge losses and is bound to incur heavy regular losses in coming years. 3. The assessee tried to float voluntary retirement scheme but the same did not get proper response from the employees and it failed. 4. The buyers of the assets actually floated the voluntary retirement scheme and paid Rs. 15.53 crore towards the same and therefore it is a fact that the amount of Rs. 15 crores was actually used for the purpose for which it was meant. 5. The observation of the AO in para no 18.11 of the assessment order is purely an assumption without any supporting evidence and is a hypothetical case. 6. The liability for the payment of Rs. 15 crore arose during the year and, therefore, the same is correctly allowable in the relevant year even though the same was not paid during the year. Reliance was placed on decision of the Supreme Court in the case of CI....
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....ts i.e. Bhiwani and Gwalior, and therefore the losses of the overall business were to a great extent set off or reduced, by the disposal of the huge liabilities of revenue nature incurring year after year. Therefore, the appellants claim of such payment u/s. 37(1) of the I.T. Act appears to be on a strong footing. 11.24 Moreover, as already mentioned by the Hon'ble Supreme Court in 247 ITR 178 in which it held that ten units run by the assessee constituted 'one single business. A few units were affected by the labor disputes and therefore the expenses incurred for reducing the number of units from ten to six were held to be revenue in nature. 11.25. Similar was the opinion of the Bombay High Court in 77 ITR 140. In which it was held that the expenditure incurred was for merely getting rid of a disadvantageous relationship for a smooth working of the companies business cannot be held to be an expenditure for acquiring any capital asset or for any enduring benefit. 11.26. These case laws and other relied on by the appellant are found to be squarely applicable to its own case and therefore it is held that the expenses incurred of Rs..15 crores is to be a....
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....nued business. These were disadvantages of a trading nature which made it impossible for the company to make any profits. The agreement to pay damages in the sum of Rs. 3 lakhs was, therefore, an expenditure to be made for terminating the disadvantageous relationship between the parties and to remove difficulties in the smooth carrying on of the business. Removal of the obstructions and disadvantages which were the consequences of the three agreements were removal of liabilities rather than procuration of any enduring benefits. The commission and interest payable under the agreements would have been recurrent liabilities to be discharged from circulating capital. The loans advanced under the agreements were also liabilities to be discharged from circulating capital. These liabilities were made short-lived by the compromise made between the parties. The benefit which accrued to the assessee company by termination of the agreements was not a capital asset and the payment of Rs. 3 lakhs agreed to be made in that connection would not be a capital expenditure. In each of the relevant assessment years Rs. 60,000 only have been paid towards the liability in respect of this amount and the ....
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....e us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 94. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "47. The issue in ground No. 13 with regard to deleting the disallowance of expenses incurred for making advertisement films has been dealt with by the A.O. at page 15-16, para 26. The ld. CIT(A) deleted the same after having observed at page 12-13, para 21 of his order. We found that the issue has already been settled by the Tribunal in assessee's own case in A.Y. 1976-77 and no ground was taken by the Department before the Hon'ble High Court. Similar issue has been decided by the Hon'ble Supreme Court in the case of Empire Jute Co. Ltd., 124 ITR 1 (SC). Accordingly, we do not find any infirmity in the order of the ld. CIT(A) ....
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....itions in respect of disallowance of software expenditure to the extent of Rs. 23,62,368/- as capital expenditure as software used for the first time will have to be considered as capital in nature? (b) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was right in deleting the additions made in respect of the scrap sales as while computing the eligible deduction u/s 80HHC of the Act , any receipt credited to the profit & loss account should either be included in the total turnover or 90% of the same should be reduced while computing profit of the business.?" 2. As regards the first question, ITAT relying upon on its order in the assessee's own case relating to Assessment year 2001-02 held that the software expenditure was a revenue expenditure. The appeal filed by the Revenue for the assessment year 2001 and 2002 has been dismissed for want of removal of office objections and thus the order passed by the ITAT for the Assessment year 2001-2002 has attained finality. Moreover, the Tribunal in its order relating the assessment year 2001-02 has allowed expenditure as revenue expenditure by recording thus: "7. When we app....
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....ussed this issue in Para 19B.1 to 19B.6 on page 20 & 21 of the order. The CIT(A) has dismissed both these claims of the assessee and upheld the order AO on this issue. Revenue is in appeal against this order of the Ld.CIT(A). 104. Before us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 105. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "51. Ground No. 16 pertains to the ld. CIT(A)'s action for excluding the amount of excise duty and sales tax from the total turnover for computing deduction u/s 80HHC of the Act. 52. This issue has been settled by the Hon'ble Supreme Court in the case of Lakshmi Machine Works, 290 ITR 667 (SC). Similar issue has been decided by the Tribunal in assessee's favour in assessment years 1986-87 to ....
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....t the order of the Tribunal. Respectfully following the order of the Tribunal, we do not find any reason to interfere with the order of ld. CIT(A) on this issue.." 110. Respectfully following the above decision, we do not find any reason to interfere with the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly. 111. With regard to ground No. 17, the brief facts are, the Assessee has setup an industrial undertaking at Salav near Alibagh in the State of Maharashtra for generation of electricity in FY 93-94. This unit is known as Vikram Power Unit. In AY 2002-03, the Assessee claimed deduction amounting to Rs. 7,05,42,999/- u/s 80IA in respect of profit of Vikram Power Unit as per the provisions of section 80IA. The Assessee has claimed 80IA benefit in respect of the profit of this Unit right from AY 1994-95 onwards. In the regular scrutiny assessment, the AO has allowed deduction under section 80 IA on the profits of this Unit for AY 1994-95 to 1997-98. First time in AY 1998-99, the AO disputed eligibility of 80LA benefit for this Unit. During the assessment proceedings Assessing Officer rejected the claim on the ground that in AY 1998-99 i....
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.... demand of Rs. 7.27 Cr was raised. The Assessing Officer levied interest u/s 234D of Rs. 40.06 lac. On appeal Ld.CIT(A) deleted the levy of interest. The CIT (A) discussed this issue in para 23B.1 to 23B.4 on page 24 of the order. Revenue is in appeal against this order of the Ld.CIT(A). 116. Before us, the Ld. AR of the assessee brought to our notice various decisions which are in favour of the assessee viz., Sardar Sarovar Narmada Nigam Ltd [93 TTJ 965 (AHD)], Glaxo Smithkline Asia (P.) Ltd., v. ACIT [97 TTJ 108 (Del), Glaxo Smithkline Asia (P.) Ltd. v. ACIT [6 SOT 113 (Del)], Jindal Steel & Power Ltd., v. ACIT [10 SOT 106 (Del)] and Ekta Promotors (P.) ltd., [113 ITD 719 (Del) and requested the same be adopted in the case of assessee also. 117. Ld. DR vehemently supported the order of the Assessing Officer. 118. Considered the submissions and material placed on record, we observe that this issue is considered by the Hon'ble jurisdictional high court and decided against the assesse. The relevant ratio of the decision is given below: - "27. In view of the above, we hold that the decision of the Tribunal in which has been followed in the impugned order by the Trib....