TaxTMI 
TaxTMI 
2025 (8) TMI 1593
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....nd issues are common hence, we proceed to pass a common order. For brevity, we shall take up the appeal of the assessee in ITA No.2380/Chny/2018 for A.Y 2009-10 as lead case. The grounds of appeal raised by the assessee in ITA No.2380/Chny/2018 for A.Y 2009-10 are as under: "1. The order of The Commissioner of Income Tax (Appeals)-15, Chennai dated 29.05.2018 in I.T.A.No.448/2013-14/CIT(A)-15 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in confirming the grant of depreciation on electrical fittings @ 10% as against the claim of such depreciation at 15% by the Assessing Officer and consequently erred in sustaining the addition of the differential depreciation in the computation of taxable total income without assigning proper reasons and justification. 3. The CIT (Appeals) went wrong in recording the findings in this regard in para 5.3.1 of the impugned order without assigning proper reasons and justification. 4. The CIT (Appeals) erred in sustaining the allocation of loss Rs. 11,38,54,392/- suffered from foreign exchange fluctuation among all the units on the b....
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.... third question of law relates to the entitlement to depreciation on electrical installations. The question as to whether electrical installations would fall under the category of furniture and fittings or plant and machinery has been decided by a Division Bench of the Bombay High Court in Commissioner of Income Tax v. Hoechst Dyes and Chemicals P. Ltd. ((1999) 240 ITR 1). The Bench concludes that electrical installations, wiring for lighting, installation of call bell indicators/buzzers/door locks, etc., would qualify as furniture and fittings entitled to depreciation at the rate of 10%." Since the issue is covered against the assessee by the decision of Hon'ble Jurisdictional High Court, supra, these grounds of appeal are dismissed. 4. Grounds No.4 to 6 are relating to allocation of loss of Rs. 11.38 Crores suffered from foreign exchange fluctuation among all the units on the basis of turnover for the purpose of quantification of the claim of deduction u/s. 10B of the Act. 4.1 The assessee has claimed deduction u/s. 10B of the Act in respect of two units with EOU-1 and EOU-2 totaling to Rs.15,10,79,172/-. The assessee has allocated foreign exchange fluctuation loss amoun....
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....el has allocated on the basis of turnover therefore, remaining foreign exchange fluctuation loss at Rs. 11.39 Crores should also been allocated by the same formula. 4.4 We have heard the rival submissions, and perused the materials available on record. The assessee has claimed foreign exchange fluctuation loss of Rs. 11.39 Cores on the basis of actual loss unit wise. However, the A.O has allocated this loss on the basis of turnover and made the disallowance of Section 10B of the Act. The Ld. AR has given reason for allocating corporate level foreign exchange fluctuation loss on the basis of turnover and submitted that Forex loss of Rs 11.9 crores have been allocated on the basis of actual as these are directly identifiable to each vertical unit and are in nature of sales, purchase and other identifiable expenses. The A.O/Ld CIT(A) have reallocated these losses on the basis of turnover only for the reason that the assessee itself has allocated forex loss of 44.8 crores at corporate level on basis of turn over. We agree with the argument of Ld. AR that there is no question of estimating by allocating the forex loss on the basis of turnover, if the same are identifiable and claimed....
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....at there has been amendment in Section 40(a)(i) r.w.s 200(1) of the Act which is to be applied retrospectively as it is curative in nature in view of the several decisions on this issue. 5.3 The Ld. DR has relied on the order of A.O and argued that the assessee has not deposited the TDS made in the case of non-resident by 30.04.2006, but has paid on 06.06.2006, which is beyond the due date therefore, disallowance u/s. 40(a)(i) of the Act is to be made. 5.4 On the other hand, the Ld. AR has supported the order of Ld. CIT(A) and reiterated that the assessee has deposited the tax within due date of filing the return u/s. 139(1) of the Act and therefore, as in Section 40(a)(ia) of the Act in the case of resident, no disallowances is called for. The Ld. AR further submitted that as per DTAA with Indo- Japanese Article 22, the payment made to a person in Japan should be treated on par with the payments made to residents in India and therefore, the same treatment of TDS is to be made in the case of payment to Non-resident. The Ld. AR also submitted that Finance Act, 2014 has rationalized to Section 40(a)(i) of the Act by extending the payment of TDS before due date specified in sect....
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....xpenditure in the ratio of turnover. 6.2 On the other hand, the Ld. AR has submitted that R & D expenses incurred by the assessee relates to scientific research for development of new pharmaceuticals products and is not linked to the current commercial operation. Further, the expenses incurred towards R & D may even result as some cost without giving any benefit to the company. The Ld. AR also submitted that the assessee maintains separate books of account with respect to the R & D unit. The Ld. AR relied on the decision of Hon'ble Jurisdictional High court in the case of Bush Boake Allen (India) Ltd. vs. ACIT [2005] 273 ITR 152 (Mad.) and the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Work Ltd. vs. CIT 31 taxmann.com 191 (Bom.). 6.3 We have heard the rival submissions, and perused the materials available on record. The assessee has claimed scientific research expenditure amounting to Rs.14,03,32,595/-. The A.O while computing deduction u/s. 10B of the Act has allocated R & D expenditure to EOU units in the ratio of turnover. The Ld. CIT(A) has deleted the addition holding that the assessee has apportioned the common head office expenses among ....
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....n respect of sales promotion expenses paid to M/s. Nages Co. Ltd., Japan on which tax deducted, but not remitted within the stipulated time. The Ld CIT(A) has deleted the addition. We have already adjudicated this issue on Ground No.1 of the Revenue's appeal for A.Y 2009-10, and the same reasoning applies in the present case as well. The ground is accordingly dismissed. 8.1 Ground No.2 is regarding allocation of R & D expenses for quantifying the deduction u/s. 10B of the Act. We have already adjudicated this issue on Ground No.2 of the Revenue's appeal for A.Y 2009-10, and the same reasoning applies in the present case as well. In light of the above, the appeal of Revenue for A.Y 2010-11 is dismissed. Assessee's Appeal in ITA No.769/Chny/2019 for A.Y 2011-12: 9. Grounds No.2 & 3 are relating to allowing depreciation on electrical fittings @ 10%, as against deprecation @ 15% claimed by the assessee. We have already adjudicated this issue on Grounds No.2 & 3 of the assessee's appeal for A.Y 2009-10, and the same reasoning applies in the present case as well. Accordingly grounds of appeal are dismissed. 9.1 Grounds No.4 to 6 are relating to allocation R & D expenses for q....