TaxTMI 
TaxTMI 
2008 (2) TMI 421
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....acts in deleting the disallowance of Rs. 18,18,429 being the debenture issue expenses, wherein the Commissioner of Income-tax (Appeals) had held that it is of a Capital nature Covered by section 35D ? Whether the Appellate Tribunal is right in law and on facts in allowing the weighted deduction regarding commission paid to Indian agents to the extent of export sales ? Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 6,37,885 made by way of adjustment entry in the municipal tax expenses account ? Whether the Appellate Tribunal is right in law and on facts in allowing deduction of legal expenses of Rs. 10,043 and Rs. 13,500 being expenses attributable to issue of debentures as revenue expend....
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.... of section 35D(2)(c)(iv) of the Act, once the expenses related to or were in connection with issue of debentures of the assessee-company, the amount was allowable only to the extent of one-tenth under section 35D of the Act and balance was not allowable in the year under consideration. The learned advocate for the respondent-assessee relied on the order of the Tribunal. 5. Section 35D of the Act stipulates under sub-section (1) of allowing only one-tenth of expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which extension of industrial undertaking is completed or new industrial unit commences production or operation. Sub....
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....e is no question of invoking the provisions of section 35D of the Act and, hence, it is not necessary to return the question unanswered. 6. In the facts and circumstances of the case, questions Nos.1 and 4 are answered in the affirmative, that is, in favour of the assessee and against the Revenue. 7. In so far as question No. 2 is concerned, the question itself indicates that commission was paid to Indian agents based on the extent of export sales. The Tribunal has merely relied upon the assessee's own case for the assessment year 1974-75. However, Mr. Bhatt invited attention to the apex court's decision in the case of CIT v. Stepwell Industries Ltd. [1997] 228 ITR 171 to point out that in similar circumstances commission paid to the ....
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.... of the Revenue and against the assessee. 10. In so far as question No. 3 is concerned, the facts recorded by the Tribunal show that deduction of Rs. 6,37,885 was claimed on the basis of the provision for municipal tax as per the bills for the assessment years 1974-75 to 1980-81. However, the assessee disputed the liability and filed various suits in the civil court. The suits came to be withdrawn and the matter was referred to arbitration subject to the condition that 65 per cent. of the outstanding liability be paid to the municipal corporation. In relation to the balance outstanding liability the provisions of section 41 of the Act were invoked by the Assessing Officer and confirmed by the Commissioner of Income-tax (Appeals). However....