TaxTMI 
TaxTMI 
2023 (4) TMI 1288
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....revised grounds in its appeal: - "On the facts and in the circumstances of the case and in law, the Ld. CIT(A), Mumbai has (a) Erred in allowing the expenditure on dies & Moulds of Rs.7,16,16,415/- as a revenue expenditure even though the expenditure on purchase the assets results in enduring benefit of the assessee and therefore constitutes expenditure of capital nature. (b) Erred in deleting the addition of Rs. 27,95,851/- representing penalty charges received from machinery suppliers despite the fact that these receipts fall within the definition of income u/s 2(24) of the Income Tax Act." (c) Erred in direction the A.O. to allow deduction of Rs. 2,36,37,738/- towards expenditure even though expenditure on purchase these assets results in enduring benefit of the assess and therefore constitution an expenditure of capital nature. (d) Erred in direction the A.O. to grand deductionu/s 80HH &801A on the profits derived from respective units without deducting depreciation of respective units which is contrary to the provisions of above section. (e) Erred in direction the A.O. to grand deduction u/s 80HH & 80IAby including duty dra....
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....een considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 5. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 6. Considered the rival submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee in the A.Y. 1995-96. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 3493/Mum/1999 dated 20.01.2021 held as under: - "55. Considered the rival submission and material placed on record. We notice from the records that the identical issue has already been decided by the Coordinate Bench of ITAT in assessee's own case for Assessment Year: 1990-91 to 1994-95 (ITA No. 6324 & 6325/Mum/2010 and 6963 & 6964/Mum/2014) on merits. For the sake of clarity, relevant portion of the said decision is reproduced below:- 5.1. We find that for the Assessment Year 1991, 1993- 94 & 1994-95, the only ground raised by the revenue is with regard to the direction of the Ld. CIT(A) in allowing the revenue expenditure in respect of replacement of jigs and fixtures and dies and mo....
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....& 1994-95 (ITA No. 2739, 3175, 3491 & 3492/Mum/1999) on merits. For the sake of clarity, relevant portion of the decision in assessee's own for Assessment Year 1993-94 (ITA No. 3491/Mum/1999) is reproduced below:- 3. The first issue in this appeal filed by the revenue is against the deletion of an addition 22,80,791/- representing penalty charges received from machinery suppliers. Both the parties agreed that the issue is covered by the decision of this Tribunal in assessee's own case for the assessment year 1989-90 to 1992-93 wherein the receipt in question has been held as a capital receipt. The Tribunal in the above referred orders (ITA 2468/Mum/98 & ITA No. 2643/Mum/99 for the assessment year 1992-93 - 'J' Bench order dated 16 th November, 2006, paragraph 15) has dealt with the issue in the following manner in rejecting the ground raised by the Revenue:- "15. Ground no. 8 relates to the addition of Rs. 24,14,323/- being the penalty charges received from the suppliers of machineries on account of some default. The learned CIT(A) has deleted the addition following his order for Assessment Years 1989-90 to 1991-92 as well as the decision of Hon'ble Andhra Pradesh....
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....appeal has been considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 14. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 15. 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. 1995-96. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 3493/Mum/1999 dated 20.01.2021 held as under: - "57. With regard to this ground, Ld. AR brought to our notice para 8-8.5 of assessment order and para 33 of CIT(A)'s order and submitted that the similar issue has already been decided by the Coordinate Bench of ITAT in assessee's own case for Assessment Year : 1990-91 to 1994-95 (ITA No. 6324 & 6325/Mum/2010 and 6963 & 6964/Mum/2014) on merits in favour of the assessee. 58. On the other hand, Ld. DR relied on the orders passed by revenue authorities, however he conceded that this ground is covered by the decision of ITAT. 59. Considered the rival submission and material placed on record. We notice from the records that ....
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.... together with the main plant and machinery was duly capitalised by the assessee at the time of first purchase for the purpose of Income Tax Act and depreciation claimed accordingly for the purpose of Income Tax Act. Later, whenever the said jigs and fixtures were replaced for the reasons stated supra, the assessee has been claiming the same as revenue expenditure for the purpose of Income Tax Act. We find that this argument was duly 'appreciated by the Id. CIT(A) and the Id. CIT(A) duly granted relief to the assessee in this regard by following the decision of his predecessor in assessee's own case for the A.Yrs 2002-03, 2005-06 and 2006-07. 60. Therefore, respectfully following the above decisions of Coordinate bench of ITAT in assessee's own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Accordingly, this ground raised by the revenue is dismissed." 16. Further, in assessee's own case for the A.Y. 1996-97 the Coordinate Bench in ITA.No. 2230/Mum/2000 dated 20.06.2022, held as under: - "16. The assessee has purchased Jigs and Fixtures to the tune of Rs.1,83,34,475/- to be used in produ....
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....T ITA No.7299/M/2017. It is also submitted that the assessee has never cited the above case before the lower authorities and has not made any reference of the above case. 4. Secondly, it is submitted that the case cited by assessee counsel, is dealing with section 10AA and not with sections 80HH and 80IA(9) involved in this case. Further, it is also submitted that the above cited case has drawn its reference from the case of Vijay Industries dated 01.03.2019 wherein the issue before the Apex Court relates to the interpretation of section 80HH relevant to AY 1979-80 and 1980-81. In the order of Vijay Industries, the Apex Court held as under "provisions of section 80AB, which is a deeming fiction to provide that for the purposes of deduction under Chapter VIA (heading C deduction in respect of certain income), only income as computed under the provisions of the Act shall be deemed to income eligible for deduction, are not clarificatory in nature and the provisions of section 80AB prospectively. are applicable Hence the same would not apply to AY 1979-80 and 1980-81. 5. As per the provision of section 80AB, for purpose of computing the deduction under this c....
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.... Accordingly, this ground raised by the revenue is allowed. 21. Further, the Coordinate Bench of the Tribunal in ITA.No. 2230/Mum/2000 dated 20.06.2022 for the A.Y. 1996-97 following the decision in assessee's own case for the A.Y. 1995-96, held as under: - "17. A perusal of the impugned order shows that the CIT(A) has directed the Assessing Officer to compute deduction u/s 80HH and 80IA without deducting depreciation from the profits of the eligible undertaking. The Revenue is in appeal against the said findings of the CIT(A). The Co-ordinate Bench in the appeal by Revenue for assessment year 1995-96 had accepted identical ground raised by the Revenue following the decision rendered in ITA No.3491/M/1999 for assessment year 1993-94 by the Tribunal in assessee's own case No contrary material has been placed before us by the Ld.Counsel for the assessee. We find no reason to take a different view. Consequently, the fining of the CIT(A) on this issue are reversed and Ground No.4 raised in the appeal by Revenue is allowed." 22. The decision relied on by the Ld. AR of the assessee in the case of Reliance Industries Limitedv. ACIT (supra) is distinguishable to the fact....
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....ial undertaking is that there should be a direct nexus between such profits and gains and the industrial undertaking or business. Such nexus cannot be only incidental. What is to be seen for the applicability of sections 80-IB and 80-IC is whether the profits and gains are derived from the business. So long as profits and gains emanate directly from the business itself, the fact that the immediate source of the subsidies is the Government would make no difference. The "profits and gains" spoken of by sections 80-IB and 80-IC have reference to net profit. And net profit can only be calculated by deducting from the sale price of an article all elements of cost which go into manufacturing or selling it. Thus understood, it is clear that profits and gains are derived from the business of the assessee, namely, profits arrived at after deducting manufacturing costs and selling costs reimbursed to the assessee by the Government concerned. Section 28(b) specifically states that income from cash assistance, by whatever name called, received or receivable by any person against exports under any scheme of the Government of India, will be income chargeable to income-tax under....
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....as been considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 28. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 29. 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. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 1781/Mum/2000 dated 20.06.2022 following the decision in assessee's own case for the A.Ys. 1995-96, relevant portion is reproduced below:- "5. The first issue raised by the assessee in appeal is against the exclusion of excise duty and sales tax from total turnover for the purpose of computing deduction u/s 80HHC of the Act. A perusal of the assessment order and the order of CIT(A) would show that perse assessee's eligibility to claim deduction u/s 80HHC is not disputed. It is only some of the components of total income from exports on which the assessee has claimed benefit of deduction u/s 80HHC of the Act that have been excluded by the Assessing Officer while computing the deduction. In ....
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....f the appeal is allowed." 30. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in assessee's own case for the A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the revenue is dismissed. 31. With regard to Ground No. (g) which is in respect of "Technical knowhow" charges, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 32. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 33. 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. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 2230/Mum/2000 dated 20.06.2022 held as under: - "We find that in assessment year 1995-96 the Assessing Officer had accepted assessee's claim of deduction u/s. 80HHC of the Act in respect of Technical Know- how Charges received from Maharastra Scooters Ltd., a St....
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....es, incidental or ancillary carried on by the assessee -company. Therefore, there is no force in arguing that the income that arose to the assessee out of deliberation of technical knowhow is not business income. 6. That apart another finding of the CIT is that the technical know-how feesreceived by the assessee falls under the category of commission interest, rent, charges or any other receipts of similar nature susceptible to exclusion to the extent of 90 per cent. This finding is also not legally valid. The technical know-how fees received by the assessee cannot be commission or interest or rent. The reminder is charges or any other receipts of similar nature. The work "charges" used in sub clause(i) of clause (baa) is found in the company of expressions like brokerage", "commission", "interest", "rent". If we apply the principle of "efusdem generis", the term "charges" has to be read in the company of the preceding words, such as brokerage, commission, interest, rent, etc. The brokerage or commission or interest or rent does not have any nexus with any manufacturing or processing of the core business activity that could be carried on by the assessee. Similarly, the wor....
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....ision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the revenue is dismissed. 35. With regard to Ground No. (h) which is in respect of disallowance of entertainment expenditure, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal and decided the issue in favour of the revenue and against the assessee. He submitted that the Ld CIT(A) has already decided the issue against the assessee and ground raised by the revenue is misconceived. 36. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 37. Considered the rival submissions and material placed on record. We observe that Ld CIT(A) has already decided the issue against the assessee and revenue has wrongly raised this ground of appeal. Therefore, the ground raised are not relevant and the issue is already decided against the assessee and the assessee also has not raised any ground in this regard. Therefore, this ground also dismissed as not maintainable. 38. With regard to Ground No. (i) which is in respect of allowing exp....
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..... However, the learned counsel submitted that this issue now stands covered by the decision of DCIT v SUN Pharmaceuticals Limited reported in 329 ITR 479, wherein it has been held that making of advance payment for acquiring land on lease for 19 years was allowable as revenue expenditure. Therefore, the decision of the earlier Tribunal order may not be followed. 7.1 On the other hand, the learned DR relied upon the findings given by the Ld. CIT(A) as well as the earlier orders of the ITAT. 8. After carefully considering the rival submissions, we find that the amount which has been amortized relates to the payment for lease hold of land and building. The Ld. CIT(A) has dismissed the assessee's ground on the reason that this issue has been decided against the assessee by the Ld. CIT(A) in the earlier year. The Tribunal also in the A.Y. 2000-01 in ITA No.3314/M/2005 has dismissed the assessee's appeal on the following reasoning:- "6. Ground 2 relates to CIT (A)'s decision in confirming the disallowance of the assessee's claim of Rs 2,97,015/- u/s 35D. 7. During the assessment proceedings before us, the Ld AR stated that the said expenditure was incurred in c....
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....xpenditure. In view of the aforesaid preposition laid down by the Hon'ble High Courts, we are persuaded to agree with the learned counsel that the earlier decision of the Tribunal cannot be held as a binding precedence on the facts of the case. Accordingly, the ground nos. 5 and 6 are allowed in favour of the assessee. 52. Therefore, respectfully following the above decision of Coordinate Bench of ITAT and also the decision of Hon'ble Supreme Court and Hon'ble High Courts, which are applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Accordingly, this ground raised by the revenue is dismissed. 41. Further, in assessee's own case for the A.Y. 1996-97 the Coordinate Bench of the Tribunal in ITA.No. 2230/Mum/2000 dated 20.06.2022 following the decision in assessee's own case for the A.Y. 1995-96, held as under: - "20. A perusal of the impugned order shows that the Assessing Officer following the assessment made in assessment year 1995-96 has disallowed assessee's claim of proportionate write off premium paid on leasehold land Rs.7.42.135/- In first FRITH appellate proceedings the CIT(A) following the order o....
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....rt decision in the case of AAC Ltd (supra). Section 40(a)(iia) prohibits deduction of "any sum paid on account of wealth-tax". However, Explanation to Section 40(a)(iia) provides as under: "Section 40(a)(iia): Explanation--For the purpose of this sub-clause, "wealth-tax" means wealth-tax chargeable under the WT Act, 1957 (27 of 1957), or any tax of a similar character chargeable under any law in force in any country outside India or any tax chargeable under such law with reference to the value of the assets of, or the capital employed in, a business or profession carried on by the assessee, whether or not the debts of the business or profession are allowed as deduction in computing the amount with reference to which such tax is charged, but does not include any tax chargeable with reference to the value of any particular asset of business or profession." In view of the Supreme Court decision in ACC Ltd. case (supra), last part of the Explanation i.e., "but does not include any tax chargeable with reference to the value of any particular asset of the business or profession" has to be read as in continuation of the beginning part of the Explanation i.e., "f....
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....nt year 1995-96. We find that the Revenue in assessment year 1995-96 has assailed the order of CIT(A) in allowing assessee's claim of deduction in respect of wealth tax. The Co-ordinate Bench following the order of Tribunal in the case of Punj Sons P. Ltd. vs. DCIT, 74 TTJ 596 (Del) upheld the findings of CIT(A) and dismissed the ground raised by Revenue in its appeal. No contrary material has been placed before us by the Revenue. Thus, ground No.9 raised by the Revenue inthis appeal is dismissed for parity of reasons." 47. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the revenue is dismissed. 48. With regard to Ground No. (k) which is in respect of allowing expenses on GDR issue as covered in section 35D, Ld. AR of the assessee submitted that Expenses amounting to Rs..11,71,99,600 incurred in connection with issue of GDR of USD 109,999,983 in the previous year relevant to A.Y.1995-96. Expenditure claimed u/s. 37(1) in AY 1995-96 disallowed relying on the decision of the Supreme Court in the case of Brooke Bond India Ltd. (225 ITR....
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.... expenditure of Rs.8.77 crores was less than 2.5 % of the cost of the project and capital employed and thus the assessee was entitled to deduction of Rs.87.7 lakhs as claimed u/s. 35D. The Assessing Officer was of the view that GDR issue was admittedly in connection with the extension of industrial undertaking and only the incremental capital employed which is attributable to the new project should be considered as capital employed. The increase in share capital and debenture between 31.3.1994 and 31.3.1995 was Rs.37.53 crores and thus 2.5% of such capital employed was Rs.93.82 lacs. Further it was stated that cost of Acetic Acid Expansion Project was Rs.188.31 crores whereas the net proceeds of GDR issue was Rs.182.95 crores (191.72 crores being gross proceeds - 8.77 crores being expenses). Further from the proceedings for A.Y. 2001-02 it was noticed that Rs.128.93 crores was invested in UTI Unit 65 scheme out of the GDR issue proceeds and since this investment was 70% of the GDR issue process, 70% of the expenses of Rs.87.73 lacs written off in that year by the assessee amounting to Rs.62 lacs was disallowed u/s. 14A as the dividend income in respect of UTI was exempt under the A....
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....erial placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1996-97. However, the Ld AR has brought to our notice that the assessee has not entered in any such transaction with Tata Chemical Ltd. Therefore, this ground raised by the revenue is not maintainable considering the fact that no such transactions are carried on by the assessee with the above company. Accordingly, ground raised by the revenue is dismissed. 56. With regard to Ground No. (j) which is in respect of holding that the lease agreement with JCT Ltd is genuine and the assessee company is entitled to depreciation on the assets leased to JCT Limited. Ld. AR of the assessee submitted that Lease agreement with JCT Limited dated 26 March 1996 - BAL purchased assorted items of equipments at the original cost of purchase, i.e.Rs..6,92,22,335/-- The assets were leased back to JCT. Further, he brought to our notice the decision of the Coordinate Bench in assessee's own case for the Assessment Year 1996-97 and by referring to Para No.24 he submitted that depreciation on such assets claimed and allowed by the order of the Tribunal in the earlier year by dismissi....
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....c) & (d) above, the CIT(A) answered the question in negative holding that the transaction of purchase of assets from HSEB and PSEB and leasing it back to the State Electricity Board is not a hire purchase agreement nor it is a loan transaction against security of the assets. We, concur with the detailed and reasoned findings of the CIT(A) on this issue, they are not reproduced for the sake of brevity. The Hon'ble Supreme Court of India in the case of CIT vs. K.Y.Pillah & Sons, 63 ITR 411 and Hon'ble Delhi High Court in the case of CIT vs. Global Vantedge P. Ltd., 354 ITR 21 held that where the Tribunal concur with the view of CIT(A), the findings of CIT(A) need not be reproduced. 25.4 We find that in the case of CIT vs. Punjab State Electricity Board, wherein after the sale of asset the same asset was leased back to the Punjab State Electricity Board and the Electricity Board claimed deduction in respect of lease rental, the Department allege that sale of asset to third party and the same asset being taken on lease for claiming deduction in respect of lease rental is a colorable device to reduce tax liability and have denied the same. The Tribunal decided the issue....
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....e payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5. The hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 173 FIR 479 and Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667. It: was further observed that the word "device" or "sham" could not be used to defeat the effect of a legal situation. 6. In view of the finding recorded by the Tribunal in the facts of this case, no substantial question of law arises. The appeal is dismissed." 25.5 Thus, the Hon'ble Court held that lease agreement where the asset is leased back to the vendor is not a ploy to reduce tax incidence and is an accepted arrangement. In view of our above findings, we see no merit in Ground No.11 raised by the Revenue, hence, the same is dismissed." 59. Respectfully following the above decision and following the principle of consistency, the view taken by the Tri....
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....e receipt. However, it is brought to our notice that the Assessing Officer himself treated the surplus of redemption of preference shares and preference shares as income chargeable to tax under the head "capital gain". Therefore, even Ld. CIT(A) has decided the issue as per the findings of the Assessing Officer. Therefore, it is not the case of the Assessing Officer that the above surplus should be considered for taxation under the head "under the term revenue receipt". Therefore, in our considered view the ground raised by the revenue is not maintainable as the fact suggest that the ground raised by the revenue is not connected with the findings of the Assessing Officer. The Ld.CIT(A) has sustained the findings of the Assessing Officer, therefore, there is no grievance to the revenue. Accordingly, ground raised by the revenue is dismissed. 65. With regard to Ground No. (l) of grounds of appeal, which is in respect of redemption of treasury bills, Ld. AR of the assessee brought to our notice the letter dated 10.03.2000. He submitted that Surplus on redemption was shown as short- term capital gains in the return of income out of abundant caution. Redemption results in total extin....
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....(47) of the Act so as subjected to short term capital gains. The CIT(A) following the ratio laid down in the case of Vania Silk Mills Pvt. Ltd. vs. CIT, 191 ITR 647(SC) held that in redemption, the asset in the form of treasury bills stood extinguished without transfer. Therefore, the surplus arising out of redemption of treasury bills cannot be subject to capital gains. The treasury bills being capital asset, the surplus arising out of its redemption can neither be taxed as revenue receipt. The learned Counsel for the assessee fairly admitted LA that this issue is decided against the assessee by the Tribunal in assessee's own case for assessment year 1995-96. We find that the Co-ordinate Bench in assessee's own case for assessment year 1995-96 in appeal by the Revenue after placing reliance on the decision of Hon'ble Supreme Court of India in the case of CIT vs. Grace Collis, 248 ITR 323 has decided the issue in favour of the Revenue. Thus, in view of uncontroverted findings of the Co-ordinate Bench in assessee's own case in the immediately preceding assessment year, ground No.8 in appeal by the Revenue is allowed." 69. Respectfully following the above ....
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....Income-tax (Appeals) erred in not appreciating the fact that the said fines and penalties had been incurred incidental to the carrying on of the business and not for deliberate infraction of law and accordingly ought to have been allowed as a deduction. IV. DIES AND MOULDS LEASED 4.1 On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax(Appeals) erred in rejecting the respondent's claim for deduction of Rs. 1,46,01,825/- as revenue expenses and thereby upholding the action of the Joint Commissioner of Income-tax to treat the same as a capital expenditure in respect of cost of Dies & Moulds leased to job workers 4.2 In doing so, the Commissioner of Income-tax (Appeals) erred in not appreciating the fact that though the dies and moulds were leased for administrative convenience, they represented a part of the respondent's plant and machinery and since the dies and moulds purchased in the past had been capitalized, the cost of new dies and moulds used during the year represented only replacements either on account of wear and tear of the dies or on account of change in the design of the press part for the produc....
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....issued to grant deduction in respect of the aforesaid amount in the year/s in which the corresponding debts have been written off against the provision for doubtful debts created in the above assessment year or in case of write back of the provision, to exclude the same from total income. 6. The appellant prays that in respect of provision of doubtful debts disallowed in the earlier years, directions may be issued to grant deduction in respect of bad debts written off during the year against the said provision for doubtful debts or in case of write back of the said provision during the year, to exclude the same from the total income in assessment year 1997-98." 73. Ld. Counsel for the assessee submitted that the above additional grounds of appeal are purely legal grounds and do not require any fresh examination of facts. Therefore, Ld. Counsel for the assessee prayed it may be admitted. 74. Ld. DR objected for admission of the additional grounds as they were never raised before lower authorities and therefore cannot be admitted. 75. Considered the rival submissions and material placed on record, we observe that as the said additional grounds are legal grounds, whe....
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....ons. 5. In additional ground No.1 of the appeal the assessee has assailed exclusion of scrap sales, miscellaneous scrap sales and sundry sales from total turnover for the purpose of calculating deduction u/s 80HHC of the Act. The Id. Counsel for the assessee has placed reliance on the decision of Tribunal in assessee's own case for Assessment Year 1995-96 to contend that the assessee is eligible to claim deduction u/s.800HHC on scrap sale, miscellaneous scrap sale and sundry sale. 5.2 A perusal of the impugned order shows that the Assessing Officer had included scrap sales generated out of raw material used in manufacturing Rs.43,92,32,708/, miscellaneous scrap sales consisting of packing material like empty barrels, steel covers, etc. amounting to Rs.4,82,77,276/- and sundry sales not covered in items above amounting to Rs.2,44,358/-. In the first appellate proceedings, the CIT(A) held that the sale of aforesaid items should be excluded from total turnover for the purpose of calculating deduction u/s 80HHC of the Act, as in Assessment Year 1995-96 these very items were excluded from total turnover while computing deduction u/s 80HHC of the Act. In assessment ....
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....r Explanation-(iii) to section 37(2) of the Act. It is reproduced for the sake of clarity- (iii) expenditure on provisions of hospitality of every kind by the assesses to any person, whether by "way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade, but does not include expenditure on food or beverages provided by the assesses to his employees in office, factory or other place of their work." We notice that the explanation clearly states that hospitality of every kind to any person by whatever manner. The only exception was expenditure on food or beverages provided to its employees in work places. Therefore, in our view, the decision relied by Ld. AR is distinguishable i.e. the seminars are not organized by assessee, but only sponsored the events hosted by others and the expenditure incurred by assessee is covered by the Explanation to section 37(2A) of the Act. Accordingly, this ground raised by the assessee is dismissed." We find that in Assessment Year 1995-96 similar arguments were raised by the Id. Counsel for the assessee and t....
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....d by the assessee is dismissed. 89. With regard to Ground No. 4 which is in respect of Dies and Moulds leased, this ground is not pressed by the Ld. AR of the assessee. Accordingly, the same is dismissed as not pressed. 90. With regard to Ground No. 5 which is in respect of taxability of surplus on redemption of securities, this ground is similar to ground raised by the revenue in Ground No. (d), accordingly, the decision taken therein shall apply mutatis-mutandis to this ground of appeal also. Accordingly, the ground raised by the assessee is dismissed. 91. Coming to the additional Ground No. 1, Ld. AR of the assessee submitted that while computing indirect cost attributable to export of trading goods for the purpose of computing deduction u/s. 80HHC, expenses attributable to other income and export incentive estimate at 10% thereof ought to be excluded. Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 92. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 93. Co....
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....l placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in the immediately preceding assessment year in ITA.No. 1781/Mum/2000 dated 20.06.2022 following the decision in assessee's own case for the A.Y. 1995-96, held as under: - "8. The learned Counsel for the assessee submitted that as only income "derived from" the undertaking is included for the purpose of computing deduction u/s 80HH and 801 of the Act, following the same analogy the expenditure which has no nexus with the undertaking ought not to be considered. The Id. Authorized Representative for the assessee painted that similar issue had come up before the Tribunal in assessee's own case in ITA No.3144/Mum/1999(supra). The Tribunal after considering the judgment rendered in the case of Zandu Pharmaceuticals Ltd. vs. CIT 350 ITR 356(Bom), CIT vs. Hindustan Unilever Ltd., 72 taxmann.com 325 (Bom) and CHT vs. Hindustan Lever Ltd., 42 taxmann.com 132(Mad) decided the issue in favour of the assessee. 8.1 The ld. Departmental Representative fairly conceded that the issue has b....
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....l of the assessment order shows that in computation of total income the Assessing Officer has added provision for bad and doubtful debts Rs.2,85,47,483/-. However, the Assessing Officer has not given any reasoning for adding provision for doubtful debts. In the first appellate proceedings the CIT(A) has directed the Assessing Officer to allow deduction of the aforesaid amount. Against this the Revenue is in appeal before the Tribunal. We find that in assessment year 1995-96 the Assessing Officer in identical manner had added provision for doubtful debts. The CIT(A) directed the Assessing Officer to delete the addition. The Revenue carried the issue in appeal before the Tribunal. The Tribunal following the decisionrendered in the case of Vijaya Bank vs. CIT, 323 ITR 166 (SC) upheld the findings of CIT(A) and dismissed the ground raised by the Revenue. In the impugned assessment year there is no change in the facts. Consequently, the ground No.6 raised in the appeal by the Revenue is dismissed." 103. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground rais....
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....judication in accordance with law. For the sake of clarity, relevant portion of the decision in assessee's own for Assessment Year 1994-95 reproduced below:- 28. In this assessment year also the assessee has raised two additional grounds. The first being the debts written off against the provision /provision of written back in the subsequent year have to be allowed. In other words that deduction should be allowed in respect of debts written off during the year against the provision or in case of write back of the said provision the same should be excluded from total income. With regard to the first additional ground in view of our decision at paragraph 16 above, we admit the additional ground and restore the issue back to the AO to decide the issue by following the direction given at para 16 of this order. The other additional ground is only academic before us as in our considered opinion, though we find force in the contention of the assesses that when a provision is writtenback in the subsequent year the same should not form part of the total income, it would not be proper forum to comment on a subsequent assessment. However, the assessee may well raise the issue bef....