TaxTMI 
TaxTMI 
2017 (5) TMI 1825
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....llowed 25% for accompanying staff members. We find that the ITAT Mumbai in the Assessee's own case in ITA No. 5728/Mum/2004 dated 17.8.2007 for the assessment year 1996-97 had been allowing 25% of the entertainment expenditure as allowable business expenditure as has been incurred for accompanying staff members. Respectfully following the earlier orders of the Tribunal, we dismiss this ground of the Assessee. 3.2 On the issue of entertainment expenses, being expenses at the time of Company's AGM, we find that the issue is covered in the favour of the Assessee and against the Revenue in the Assessee's own case for the assessment year 1996-97 in ITA No. 5728/Mum/2004 dated 17.8.2007, specifically at para 4.1 on page 2. Respectfully following the same, we hold that the expenses incurred at the time of Company's AGM are allowable expenses. 3.3. On the issue of sales promotion / entertainment expenses, the Ld. Counsel submitted that the Assessee sponsored dinner at All India Glass Manufacturers Conference. The Ld. Counsel submits that soda ash is the main product used in glass manufacturing industry and the glass manufacturers buy soda ash from the Assessee. This sponsor....
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....essee for the food served at the guest house. Coming to other expenses incurred on guest house i.e. salaries, repairs, society charges and maintenance expenses, the Tribunal following the decision of the Hon'ble Supreme Court in the case of Britannia India Industries Vs. CIT [278 ITR 546] decided in favour of the Revenue and against the Assessee. Respectfully following the said decision, we uphold these disallowances made by the Assessing Officer. This ground is partly allowed. 5. Ground No. 4 relates to disallowance of payment to Fort Medical Society. The issue is covered in favour of the Assessee by the order of the Tribunal in ITA No. 5728/Mum/2004 dated 17.8.2007 for the assessment year 1996-97 in Assessee's own case. Respectfully following the same, we allow this ground of the Assessee. 6. Ground No. 5 relates to disallowance made u/s 40A(9) of the Act regarding payment to Tata Sports Club. This issue is covered in favour of the Assessee by the order of this Tribunal for the assessment year 1996-97 at para 6, page 3, wherein, the said expenses were allowed by the Tribunal. Respectfully following the said decision of the Coordinate Bench in the Assessee's o....
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....se of TRF Ltd. Vs. CIT (supra), we allow the claim of the Assessee. This ground is allowed. 11. Ground No. 10 relates to the disallowance of payment to Tata Chemicals Society for Rural Development. The Ld. Counsel submitted that this ground is not pressed in view of the Assessing Officer passing 154 order granting relief to the Assessee. Thus, this ground is dismissed as not pressed. 12. Ground No. 11 relates to the disallowance of payment to foreign technicians. The Ld. Counsel for the Assessee submitted that the Assessing Officer allowed deduction u/s 35AB of the Act at 1/6th of the total expenses during this assessment year. He submits that the Assessee would be satisfied if a direction is given to the Assessing Officer to allow similar deduction in subsequent years. The Assessing Officer having allowed deduction at 1/6th of the total expenses during this assessment year, we see no reason for not allowing the said expenses in subsequent assessment years at 1/6th of the total expenses. Thus, we direct the Assessing Officer to allow these expenses at 1/6th in subsequent assessment years. The additional ground is admitted and allowed. 13. Ground No. 12 relat....
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.... mills was written off. The Ld. Counsel referring to the additional ground filed now before us submits that these wind mills were installed for increasing power supply to existing manufacturing facilities of the Assessee and it is not an expansion of new business and therefore the expenses should be allowed as revenue expenditure. The Ld. Counsel for the Assessee submits that the wind mills installed were for captive power consumption and was later the wind mills were abandoned due to technical reasons and therefore he submits that since these windmills were intended to install only for captive consumption and not for a new source of income and since the project was abandoned the expenses are to be allowed as revenue expenses. He strongly placed reliance on the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Idea Cellular Ltd [76 Taxman.com 77] for the above proposition. 15.3 We have heard the rival submission. The Assessee is engaged in manufacturing of salt in multiple salt pawns of about 120. The Ld. Counsel submitted that installation of wind mills project was abandoned by the Assessee due to various reasons and the cost of the project abandoned should be al....
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.... 16.1. Ground No. 14 relates to non admission of additional ground in respect of amount transferred to debenture redemption reserve while computing book profits u/s 115JA. The Ld. Counsel for the Assessee submits that this ground of appeal though raised before the Ld. CIT (Appeals) as additional ground, the Ld. CIT (Appeals) has not adjudicated this ground. He submits that this is purely a legal ground and therefore the Ld. CIT (Appeals) should have admitted and adjudicated upon. He further submits that in the case of Echjay Forgings [251 ITR 15], the Hon'ble Bombay High Court held that the amount transferred to debenture redemption reserve is an amount set aside to meet a known liability and as such the debenture redemption reserve cannot be considered to be a 'reserve' for the purpose of computing book profits u/s 115JA of the Act. 16.2 On hearing the Ld. Counsel, we are of the view that this issue should be addressed by the Ld. CIT (Appeals) by admitting the additional ground, hence, this ground is restored to the file of the Ld. CIT (Appeals) who shall admit the additional ground and decide the issue in accordance with law keeping in view the decision of the Jurisdict....
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....le of cement through ACC offered in earlier years and reversed in the current year. And regarding Rs. 12,81,299/- being short provision for book depreciation, Assessing Officer is directed to delete after verification of the facts. The Ld. CIT (Appeals) in his order has given the following reasons for deletion of the prior period expenses. "11.3.1 As regards amount of Rs. 1,78,08,396/- being excess share of profit on sale of cement through ACC offered in earlier years and reversed in the current year, it is seen that the A.O has not given any reasons before making the disallowance. The entire expenses of Rs. 2,45,23,501 debited under the head 'prior period expenses' have been disallowed without examining the nature of expenses. The income of Rs. 1,78,08,396/- was offered by the appellant in earlier years. During the year, after negotiation and finalisation of accounts, the share of profit receivable from ACC was reduced. The reduction in the amount receivable from ACC is eligible for deduction as write off of bad debt. It has been held by the Hon'ble Bombay High Court in the case of Byramjee Jeejeebhoy P. Ltd. 182 ITR 6 that the interest inc....
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....fficer. 21.1. Ground No. 5 relates to disallowance of expenses towards community development. The Assessing Officer while completing the assessment disallowed Rs. 96.2 lakhs spent by the Assessee on community development under drought relief on the ground that the said expenditure does not fulfil the requirements of section 37 of the Act. The Ld. CIT(Appeals) taking note of the fact that the monies spent by the Assessee on community development programmes such as running of primary schools, medical facilities, technical/industrial training, distribution of seed, distribution of fertilizer, distribution of cattle field, adult education and literacy programmes, supply of drinking water etc., held that all these expenses incurred cannot be regarded as being wholly outside the scope of Assesee's business. The Ld.CIT (Appeals) held that all these activities are done either in the name of TCL by the Company itself or through Tata Chemicals Society for rural development. Appreciating the submissions of the Assessee that this expenditure has been incurred in order to win over the good will of the employees and the nearby villagers, Ld. CIT (Appeals) held that the expenditure i....
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.... Section 14A. We find that an identical issue arose for the assessment year 2006-07 and the Coordinate Bench in ITA No. 6496/2004 dated 17.08.2007 upheld the order of the Ld. CIT (Appeals) in holding that entire borrowings was utilized for putting up new plant at Paprala and no part of the borrowings was utilized for the purpose of investment. In other words, it was held that there is no nexus between the income on investments and the interest paid on borrowings. It was also observed by the Coordinate Bench that contentions raised by the Revenue have been decided in favour of the Assessee and against the Revenue in Assessee's own case for the earlier assessment years i.e. 1992-93 to 1995-96. The Ld. CIT (Appeals) following the Coordinate Bench decision of this Tribunal for the assessment year 1994-95 deleted the disallowance made by the Assessing Officer. Therefore, we see no infirmity in the order passed by the Ld. CIT (Appeals) hence this ground is dismissed. 24.1. Ground No. 8 raised by the Revenue is in respect of the computation of book profits u/s 115JA of the Act. The Assessing Officer while completing the assessment added back provision for doubtful debts amoun....