TaxTMI 
TaxTMI 
2025 (2) TMI 1246
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....mmon order. Assessment Year 2005-2006 2. At the request of both the sides, we would first take up cross-appeal for Assessment Year 2005-2006 arising from order dated, 30/11/2009, passed by the Commissioner of Income Tax (Appeals)-24, Mumbai [hereinafter referred to as the 'CIT(A)'] whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 12/12/2007, passed under Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as 'the Act']. 3. The relevant facts in brief are that the Assessee is a public limited company engaged in the business of manufacture and sale of two wheelers and three wheelers under the popular brand name of 'Bajaj'. For the Assessment Year 2005-06 the Assessee filed return of income disclosing total income of INR.923,69,30,530/-. The Assessing Officer completed the assessment at total income of INR.979,95,45,330/- after making certain additions/disallowances. 3.1. Being aggrieved, the Assessee preferred appeal against the Assessment Order, dated 12/12/2007, before the CIT(A) which was disposed off vide order, dated 30/11/2009, as partly allowed. 3.2. Not being satisfied with the relief grant....
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.... (Appeals) for Assessment Years 1991-92 onwards in support of the aforesaid contention. However, the Assessing Officer disallowed the deduction claimed by the Assessee in respect of lease premium written off during the relevant previous year under Section 37(1) of the Act holding the same to be in the nature of capital expenditure. 5.2. In appeal before the CIT(A), it was contended on behalf of the Assessee that the lease was for a period of 99 years; and the Assessee was required to pay to Maharashtra Industrial Development Corporation (MIDC) a high upfornt lease premium along with a nominal annual lease rent. The upfront lease premium paid by the Assessee was in the nature of advance rent only. However, the CIT(A) was not convinced. Agreeing with the Assessing Officer, the CIT(A) dismissed the ground raised by the Assessee in this regard by placing reliance on the decision of Special Bench of the Tribunal in case of JCIT vs. Mukund Ltd. reported in 291 ITR (AT) 249. The CIT(A) concluded that no deduction in respect of leasehold premium could be allowed as the same constituted capital expenditure. The CIT(A) also placed reliance upon the judgment in the case of CIT Vs. Project ....
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....that in assessment year 1995-96 the Coordinate Bench has upheld the finding of the CIT(A) by placing reliance on various decisions viz: i. DCIT vs. Sun Pharmaceutical Industries Ltd., 329 ITR 479 (Guj); ii. United Phosphorous Ltd. vs. ACIT, 230 Taxman 590(Guj); and iii. Lupin Ltd. vs. JCIT in ITA No. 5088/Mum/2005 for A.Y. 1994-95 decided on 02/11/212. The Revenue has not been able to controvert the findings of Co-ordinate Bench on this issue in assessee's own case for assessment Year 1995-96. Following the decision of Coordinate Bench, we uphold the finding of CIT(A) on this issue and dismiss ground No. 7 raised in appeal by the Revenue." 5.7. The aforesaid decision of the Tribunal has since been followed by the Tribunal while deciding identical issue in favour of the Assessee in appeals [listed in paragraph 4.4 above] pertaining to the Assessment Years 1997-98 to 2000-2001. There is no change in facts and circumstances of the case. In effect, the Tribunal has accepted the contention of the Assessee that the lease premium is on the nature of advance rent and therefore, proportionate lease premium written off was held to be revenue in nature. ....
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....y raised by the Assessing Officer in this regard during the assessment proceedings, the Assessee made detailed submissions explaining that the investments yielding tax free income had been sourced from the Assessee's own non-interest bearing funds. However, the Assessing Officer was not convinced. The Assessing Officer rejected the aforesaid contentions of the Assessee holding as under: (a) investments in shares of domestic companies and earning dividend income was a divisible activity from the other activities carried out by the Assessee; (b) the Assessee had utilised funds from a common pool of funds for all its activities and accordingly, the Assessee's contention that investment yielding tax-free income has been sourced out of its own net worth was without any basis, (c) the Assessee had not furnished any details or evidence that investments yielding tax free income were made out of interest free funds, 6.4. The Assessing Officer noted the average cost of borrowed funds was 0.05% p.a. and therefore, the Assessing Officer made disallowance of interest of INR.15,79,260/- being 0.05% of INR.289.21/- Crores [percentage of borrowed funds to total fu....
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....vestments and therefore, no disallowance of interest was warranted in the facts and circumstances of the present case. 6.8. Per contra the Learned Departmental Representative placed reliance on the order passed by the Assessing Officer. 6.9. We have perused the material on record and considered the rival submission on this issue. 6.10. It is settled legal position that provisions of Rule 8D of the IT Rules were not applicable for assessment years prior to assessment year 2007-2008 [Godrej & Boyce Mfg Co. Ltd. Vs. DCIT [2010] 328 ITR 81 (Bombay) & Maxopp Investments Vs. CIT [2018] 402 ITR 640 (SC)]. 6.11. Further, on perusal of Assessment Order we find that the Assessing Officer has concluded that interest of INR.15,79,260/- was incurred in relation to investment made in tax free investments aggregating to INR.1296.70 Crores. A perusal of financial statements of the Assessee for the relevant previous year shows that Own Funds (Share Capital and Reserves & Surplus) of the Assessee as on 31/03/2005 stood at INR.4,134.35 Crores which was much more than the investments of INR.1296.70 Crores considered by the Assessing Officer for the purpose of computing the amount of disall....
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.... 2008 prescribed method for determining amount of expenditure in relation to income not includible in total income. Accordingly, respectfully following the decision of the Special Bench of Mumbai Tribunal in case of Daga Capital Management Private Limited 312 ITR 1 (AT), I remit the matter back to the Assessing Officer with a direction to recalculate the disallowance as per rule 8D, as held in this case on page 59 para 88 wherein it has been held that: "As we have held that sub-sections (2) and (3) of Section 14A are retrospective in nature and the resultant rule 8D would also fall on the same to the disallowance under section 14A is required to be computed with reference to the mandate of these provisions. We, therefore, set aside the impugned orders in all the cases before us and remit the matter to the file of the Assessing Officers for computing the disallowance in terms of Section 14A read with rule 8D" 7.3. Being aggrieved, the Assessee has carried the issue in appeal before the Tribunal seeking further relief. 7.4. During the course of hearing it was submitted on behalf of the Assessee that the provisions of Rule 8D of the IT Rules were applicable only from As....
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....ent Year 2004-2005 as the CIT(A) had directed the Assessing Officer to compute the disallowance in the following manner vide order, dated 21/08/2008, passed by the CIT(A) for the Assessment Year 2004-05: "10.4 I have considered the submissions made by the AR. I do not agree with the AR that no administrative expenditure is attributable to earn exempt income. In my opinion, expenses not connected at all with earning of exempt income ought not to be attributed. Accordingly, power and fuel, repairs, rates and taxes and insurance should not be considered for earning exempt income. However, it cannot be ruled out that no expenditure would have been incurred by the appellant for earning exempt income. Accordingly, I direct the AO to apportion 10% of employee emoluments and miscellaneous expenses towards earning exempt income. Further, for apportioning the said expenses, the ratios of exempt income of Rs. 106,54,33,610 to the total income credited to the Profit and Loss Account amounting to Rs. 5933,58,10,011/- should be taken." 7.9. The contention of the Assessee is that even for the Assessment Year 2005-2006 same method can be adopted to quantify the administrative expenses ....
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....restricted the disallowance to 2% by placing reliance upon the decision of the Hon'ble Bombay High Court in the case of M/s Godrej Agronet Ltd. (supra) cited on behalf of the Assessee. 7.11. We are also alive to the fact while adjudicating identical issue for the Assessment Year 2003-2004, the Tribunal has [vide order, dated 09/09/2024, passed in ITA No. 1496 & 1420/Mum/2007] accepted the computation method adopted by the CIT(A) similar to the one adopted for the Assessment Year 2005-06. However, we note that the decision of the Co-ordinate Bench of the Tribunal on this issue for the Assessment Year 2002-2003 [passed in ITA No. 3043 & 2899/Mum/2010, dated 24/06/2024] has skipped the attention of the Tribunal even though reference to the aforesaid decision for the Assessment Year 2002-2003 was made in paragraph 96 of the aforesaid order, dated 09/09/2024, passed by the Tribunal in appeal for the Assessment Year 2003-2004, while adjudicating ground raised by the Assessee relating to disallowance of interest expenses under Section 14A of the Act. Further, we are of the view that method adopted by the CIT(A) was also not reasonable. The CIT(A) had after excluding Power & Fuel Expens....
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.... was capitalized in the books of accounts and depreciation of INR.33,89,043/- was claimed in respect of the same. However, during the assessment proceedings the Assessee claimed that deduction of INR.3,75,05,700/- should be allowed in respect of the aforesaid New Software Expenses as the same are revenue in nature. It was contended on behalf of the Assessee that the Assessee had merely acquired right to use the software (and not the ownership). Further, the aforesaid expenditure did not bring into existence any asset of enduring nature. However, the Assessing Officer was not convinced. The Assessing Officer, rejecting the aforesaid submissions made on behalf of the Assessee, concluded that expenditure amounting to INR.3,75,05,700/- for New Software Purchases was capital in nature and therefore, deduction for the same could not be allowed. However, the Assessing Officer allowed the Assessee to claim depreciation under Section 32 of the Act @ 60%. Thus, a net disallowance of INR. 63,32,318/- was made by the Assessing Officer. 9.2. In appeal preferred by the Assessee on this issue, the CIT(A) declined to grant any relief and rejected the ground raised by the Assessee by placing rel....
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....ation to software expenses incurred by the Assessee for the dealers forming part of New Software Purchase expenses. For the balance amount of expenditure incurred on New Software Purchase amounting to INR.1,11,47,525/- [INR.3,75,05,700/- Less INR.2,00,34,850/- Less INR.63,23,325/-], the Assessee claimed depreciation in the return of income. However, in the notes to computation of income, the Assessee made a claim that the aforesaid expenditure of INR.1,11,47,525/- be allowed as a deduction under Section 37 of the Act. It is the contention of the Assessee that expenditure incurred on New Software Purchase is revenue in nature and in this regard, reliance was placed upon the details of 'New Software Purchases' (placed at Page 74 of the factual Paper Book). On perusal of the aforesaid details we find that it gives the break-up of New Software Purchases made from different vendors alongwith brief discription. However, the grouping of aforesaid vendor-wise expenses into expenditure on 'Research & Development', expenditure 'For Dealers' and expenditure for 'Own Use' is not available on record. Therefore, we deemed it appropriate to remand this issue back to the file of Assessing Officer ....
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....d to the Profit & Loss Account as income for the relevant previous year. However, the CIT(A) granted relief to the Assessee by holding that the loss arising in the current year on account lower realisation as compared to the value booked in earlier years ought to be allowed as a deduction. Thus, the CIT(A) accepted Assessee's claim for deduction/set off of loss of Rs. 2,90,10,587/-. 10.4. Not being satisfied the Assessee has carried the issue in appeal before the Tribunal. 10.5. We have given thoughtful consideration to the rival submissions. It emerges that identical issue had come up for consideration before the Tribunal in Assessee's own case for the Assessment Year 2002-2003 [ITA No. 3043/Mum/2010 & ITA No. 2899/Mum/2010, dated 24/06/2024], wherein both the sides had agreed that issues raised were to be decided afresh after considering the facts and circumstances of the case as per the judgment of Hon'ble Supreme Court in the case of Excel Industries Ltd. (2013) 358 ITR 295 (SC). The relevant extract of the aforesaid decision of the Tribunal reads as under: "53. Heard both the sides and perused the material on record. The facts and findings on the issue of ta....
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....18,538/- was incurred between 22/09/2004 to 31/03/2005. 11.2. Under Section 35(2AB) of the Act the notified industries were entitled to claim weighted deduction of 150% in respect of expenditure incurred on research and development. As per Notification No. S.O. 1021(E), dated 21/09/2004, automobile including automobile components became notified industry falling within the ambit of Section 35(2AB). In the return of income, the Assessee claimed weighted deduction of INR.48,39,27,807/- in respect of expenditure incurred after 21/09/2004 [i.e. on INR.32,26,18,538/-]. No weighted deduction was claimed by the Assessee on the balance amount of INR.22,32,70,367/- [i.e. expenditure incurred on research and development prior to 21/09/2004]. However, by way of Note 13 to Computation of Income enclosed along with the said return, the Assessee made a claim for weighted deduction for research and development expenditure of INR.22,32,70,367/- incurred prior to 21/09/2004. 11.3. The Assessing Officer rejected the aforesaid claim of the Assessee by holding that since the notification for including the automobile and automobile components within the ambit of section 35(2AB) of the Act was sil....
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....Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby notifies automobiles, including automobile components, as article or thing for the purposes of the said clause." 11.10. It is the contention of the Assessee that weighted deduction under Section 35(2AB) of the Act would be available for expenditure on research incurred during the relevant previous year 2004-05 (relevant to Assessment Year 2005-06) while the stand taken by the Revenue is that such weighted deduction would be available only in respect of expenditure incurred after the date of notification (i.e. 21/09/2004) and before the end of the relevant previous year. 11.11. On conjoint reading of Section 35(2AB) and Notification No. 245 of 2004 [S.O.1021(E)], dated 21/09/2004, it can be concluded that with effect from 21/09/2004, weighted deduction was available in respect of expenditure incurred by an assessee engaged in manufacture or production of automobiles (including automobile components). The notification did not provide for exclusion of expenditure incurred prior to the date of notification. 11.12. It is settled legal position that in income tax matters, the law to be applied is that in force in t....
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.... or things'. In our view, use of term 'hereby' refers to the factum of issuance of the notification and has not reference to the time of incurring of expenditure on research. 11.14. In view of the above, Ground No. 7 raised by the Assessee is allowed. Ground No. 8 12. Ground No. 8 raised by the Assessee, which pertains to computation of deduction under Section 80-IA of the Act, reads as under: "8. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer that, the term "initial year" ought to taken as the first year in which the appellant exercises its option of claiming deduction under said section 80-IA and not the first year in which it starts generating power." 12.1. The relevant facts in brief are that the Assessee has installed wind farms in six phases, each qualifying for exemption as power generating units as per the provisions of Section 80-IA(4)(iv) of the Act. The Assessee opted to claim deduction in respect of the Phase I of Wind farm for the first time in Assessment Year 2005- 06 being the sixth year of operation Phase I of Wind farm. In the return o....
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.... (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing, or (ii) operating and maintaining, or (iii)developing, operating and maintaining a new infrastructure facility ; (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st April, 1995. (5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made." (Emphasis Supplied) 12.2. In appeal preferred by the Assessee, the CIT(A) declined to grant any relief on this issue and rejected the ....
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....als with quantum of deduction for an eligible business. The words "initial assessment year" are used in sub-section (5) and the same is not defined under the provisions. It is to be noted that "initial assessment year" employed in sub-section (5) is different from the words "beginning from the year" referred to in sub-section (2). The important factors are to be noted in sub-section (5) and they are as under : "(1) It starts with a non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored ; (2) It is for the purpose of determining the quantum of deduction ; (3) For the assessment year immediately succeeding the initial assessment year ; (4) It is a deeming provision ; (5) Fiction created that the eligible business is the only source of income ; and (6) During the previous year relevant to the initial assessment year and every subsequent assessment year." 18. From a reading of the above, it is clear that the eligible business were the only source of income, during the previous year relevant to the initial assessment year and every subsequent assessment years. When the assessee exercises the option, the only losses of t....
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....the carry forward of unabsorbed depreciation or depreciation allowance from previous year did not simply arise and on the finding of fact noticed by the Commissioner of Income-tax (Appeals), which has not been disturbed by the Tribunal and challenged before us, there was no error much less any error apparent on the face of the record which could be rectified. That question would have been germane only if there would have been carry forward of unabsorbed depreciation and unabsorbed development rebate or any other unabsorbed losses of the previous year arising out of the priority industry and whether it was required to be set off against the income of the current year. It is not at all required that losses or other deductions which have already been set off against the income of the previous year should be reopened again for computation of current income under section 80-I for the purpose of computing admissible deductions thereunder. In view thereof, we are of the opinion that the Tribunal has not erred in holding that there was no rectification possible under section 80-I in the present case, albeit, for reasons somewhat different from those which prevailed with the Tribunal. There....
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.... of Income Tax -LTU [ITA No. 4223/Mum/2012, Assessment Year 2008-09, dated 24/06/2021] cited on behalf of the Assessee. 12.8. Keeping in view the judicial precedents cited in behalf of the Assessee, we set aside the order passed by the CIT(A) and directed the Assessing Officer to recomputed the deduction under Section 80IA of the Act as per the judgment of the Hon'ble Madras High Court in the case of M/s Velayudhaswamy Spinning Mills (P) Ltd. (supra) wherein it was held that the unabsorbed depreciation/loss pertaining to assessment years preceding the initial assessment year to the extent already absorbed against the profit of other business of the Assessee cannot be notionally brought forward and set off against the profits of the eligible business for the purpose of the computing deduction under Section 80IA of the Act as no such mandate has been provided by Section 80IA(5) of the Act. The Assessing Officer is directed accordingly. In terms of the aforesaid directions, Ground No. 8 raised by the Assessee is allowed. Appeal by Revenue: A.Y. 2005-06: ITA No. 535/Mum/2010 13. We would now take up the grounds raised by the Revenue in the cross-appeal for the Assessment Year ....
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....at following the above decision of the Tribunal for the Assessment Year 1997-98 [ITA No. 5030/Mum/2001, dated 14/03/2023], the Hon'ble Tribunal has consistently upheld/allowed Assessee's claim for deduction under Section 35D of the Act in respect of 1/10th of the GDR issue expenses. 14.4. We note that the Tribunal has dismissed identical ground raised by the Revenue in appeals preferred for Assessment Years 1998-1999 to 2002-2003: (a) AY 2002-03 (ITA No.2899/Mum/2010, dated 24/06/2024) (b) AY 2001-02 (ITA No.4372/Mum/2005, dated 23/02/2024) (c) AY 2000-01 (ITA No.2655/Mum/2005, dated 28/11/2023) (d) AY 1999-00 (ITA No.1933/Mum/2005, dated 28/11/2023) (e) AY 1998-99 (ITA No.8952/Mum/2004, dated 22/08/2023) (f) AY 1997-98 (ITA No. 5030/Mum/2001, dated 13/04/2023) 14.5. There is nothing on record to persuade us to depart from the view taken by the Tribunal in appeals for the preceding assessment years. Accordingly, respectfully following the above decisions of the Tribunal, we decline to interfere with the order passed by the CIT(A) on this issue. Thus, Ground No. 1 raised by the Revenue is dismissed. Ground No. 2 1....
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....ssee with JCT Limited to be a genuine transaction by following the order passed by the first appellate authority for Assessment Years 1997-98 to 2001-02, and accept the claim as made by the Assessee in relation to the same. 15.4. Being aggrieved, the Revenue has carried the issue in appeal before the Tribunal. 15.5. We have considered the rival submissions and have perused the material on record. 15.6. On perusal of the order impugned, we find that the CIT(A) has granted relief to the Assessee by holding the transaction between the Assessee and JCT Ltd. to be genuine. We note that while holding so the CIT(A) had placed reliance upon the order passed by the first appellate authority for the preceding assessment years which have since been confirmed by the Tribunal. During the course of hearing reliance was placed on behalf of the Assessee on the following decision of the Tribunal: (a) AY 2002-03 (ITA No.2899/Mum/2010, dated 24/06/2024) (b) AY 2001-02 (ITA No.4372/Mum/2005, dated 23/02/2024) (c) AY 2000-01 (ITA No.2655/Mum/2005, dated 28/11/2023) (d) AY 1999-00 (ITA No.1933/Mum/2005, dated 28/11/2023) (e) AY 1998-99 (ITA No.8952/M....
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.... of the Tribunal in ITA. No. 2230/Mum/2000 dated 20.06.2022 following various judicial pronouncements dismissed the ground raised by the revenue. The Relevant portion is extracted below: - "25.3 We have heard the submissions made by rival sides and have examined the orders of authorities below. In the light of findings given by Assessing Officer to reject assessee's claim following points were considered by the CIT(A). "(a) Whether the assessee can be said to have acquired ownership of the assets in question from the Electricity Boards for purpose of claiming depreciation. (b) Whether the transactions entered into with the Electricity Boards were genuine lease transactions. (c) Whether the transactions can be characterized as loan transactions against security of the assets in question. (d) Whether the transactions can be treated as hire-purchase agreements" The CIT(A) after considering the facts of the case and lease agreement threadbare answered the first two issues in affirmative holding that the assessee had acquired the ownership of the assets purchased from Electricity Board and hence, eligible to claim depreciation on....
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.... continued to be with the assessee in spite of sale. The fact remains that the sale consideration was received by the assessee and lease rental was paid by the assessee. Merely because tax liability was reduced could not be conclusive of arrangement being sham or a device. As regards the observations of the-hon'ble Supreme Court in McDowell [1985] 154 ITR 148, the matter has. been explained in subsequent judgments including in Union of India v. AzadiBachaoAitdokn [2003] 263 ITR 706 (SC); AIR 2004 SC 107. Reiterating the view that the assessee was entitled to arrange his affairs to reduce his tax liability, without violating the law, it was observed in AzadiBachaoAndolan [2003] 263 ITR 706 (SQ; AIR 2004 SC 107 that the principle laid down in IRC v. Duke of Westminster [1936) AC 1 was still valid. 4. It was further observed that the above principle had been approved in India in the Judgment of the hon'ble Supreme Court in CZT v, A. Roman and Co. [1968] 67 ITR 11 (Mad) and the observations of Chinnappa Reddy J. in McDowell could not be treated as the ratio of the Judgment in view of opinions of majority to the effect (head note of 154 TR 148): Tax planning ma....
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....fere with the same. Ground No. 2 raised by the Revenue is, therefore, dismissed. Ground No. 3 16. Ground No. 3 raised by the Revenue, which pertains to allowability of expenditure on dies and moulds amounting to INR.24,79,56,477/- written off during the relevant previous year, reads as under: "3. On the facts and circumstances of the case and in law, the Learned CIT(A). erred in directing the A.O. to treat expenditure on dies and moulds amounting to Rs. 24,79,56,477/- as revenue expenditure." 16.1. The relevant fact in brief are that the Assessee had claimed deduction for INR.24,79,56,477/- as revenue expenditure being expenditure incurred for purchase of dies and moulds during the relevant previous year. The Assessee accounted for the aforesaid expenses as capital expenses in the books of accounts. However, in the notes to the computation of income it was stated that the dies and moulds are used in the press to produce press parts used in the manufacture of automobiles. Since the dies and moulds represent a part of the plant and machinery, the expenditure on purchase of the same originally was capitalized along with plant and machinery cost. However, the cost of ....
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....12. With regard to Ground No. 3 which is in respect of allowing deduction in respect of expenditure incurred on dies and moulds as revenue 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 in assessee's own case and decided the issue in favour of the assessee and against the department. 13. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 14. 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. 1997-98. While deciding the issue, the Coordinate Bench of the Tribunal in ITA. No. 5030/Mum/2001 dated 13.04.2023 held as under: "4. At the outset, with regard to Ground No. (a), which is in respect of allowing the expenditure on dies &moulds of Rs..7,16,16,415/- as a revenue 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 in assessee's own case and decided the issue in favour of the assessee and against the department. 5. On the other han....
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.... disallowance of expenses incurred on Dies and Moulds amounting to Rs. 30.47 crores. The assessee treated the above said expenses as Capital in nature in the books of account, but claimed the same as revenue expenditure for income tax purposes. This is a recurring issue. The co-ordinate bench has decided this issue in favour of the assessee by confirming the decision rendered by Ld CIT(A) in holding that the expenditure incurred in purchase of dies and moulds are allowable as revenue expenditure in AY 1990-91. The said decision is being followed year after year. In AY 1997-98 also in ITA No. 5030/Mum/2001 dated 13.04.2023, the Tribunal has upheld the identical decision taken by Ld CIT(A). Consistent with the view taken by the co-ordinate benches year after year, we confirm the order passed by Ld CIT(A) in holding that the expenditure incurred on Dies and Moulds is allowable as deduction." 16.7. Thus, this is a recurring issue. Identical explanation offered by the Assessee in the preceding assessment years has been accepted by the Co-Ordinate Benches of the Tribunal to hold that expenditure on replacement of mould and dies is in the nature of replacement cost allowable as deducti....
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....8/11/2023) (e) AY 1998-99 (ITA No.8952/Mum/2004, dated 22/08/2023) (f) AY 1997-98 (ITA No.5030/Mum/2001, dated 13/04/2023) (g) AY 1994-95 (ITA No.6964/Mum/2014, dated 28/08/2020) (h) AY 1993-94 (ITA No.6963/Mum/2014, dated 28/08/2020) 17.5. We have perused the decision of the Tribunal in appeal preferred by the Revenue for the AY 2001-2002 (ITA No. 4372/Mum/2005, dated 23/02/2024) and the relevant extract of the same reads as under: "16. With regard to Ground No. 4 which is in respect of allowing penalty charges recovered from suppliers of capital goods as capital receipts, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Coordinate Bench of this tribunal and decided the issue in favour of the assessee and against the revenue. 17. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 18. 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. 1997-98. While deciding the issue, the Coordinate Bench ITA. No. 5030/Mum/2001 dated 13.04.2023 held as under....
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.... "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 High Court in the case of Barium and Chemicals Ltd 168 ITR164. After hearing both the parties, we find that this issue is covered in favour of the assessee by the decisions of the Tribunal in assessee's own case pertaining to Assessment Years 1988-89 and 1991-92. Therefore following the same, the order of the learned CIT(A) is upheld and the ground o the Revenue is dismissed. We do not have a reason deviate from this consistent view of the Tribunal on the issue. Accordingly, this ground of the revenue is rejected. 37. 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." 11. Further, in assessee's own case in ITA. No. 223....
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....in respect of expenditure incurred on replacement of Jigs and Fixtures debited to the Profit & Loss Account. The Assessing Officer denied deduction for the same on the ground that the same resulted in enduring benefit to the Assessee and were capital in nature. In appeal preferred by the Assessee, the CIT(A) deleted the disallowance. Hence, the Revenue is in appeal before the Tribunal on this issue. 18.2. We have heard both the sides and have perused the material on record. 18.3. We find that this is a recurring issue. The Assessee had consistently claimed that Jigs and Fixtures were tooling aids required in the production process. Fixtures were required to hold in a fixed place, the raw material to be worked on. While, Jigs are tools used to guide the working tools. The jigs and fixtures purchased along with the machinery were capitalised in the books of accounts whereas the expenditure incurred to replace the same was charged off in the Profit & Loss Account. The expenditure does not result in installation or increase in the existing capacity and the same is incurred to maintain operational efficiency. The aforesaid explanation has been accepted by the Tribunal while decidi....
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....es, 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 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:- 3.1. We have heard rival submissions and perused the materials available on record. We find 'that the assessee company had incurred expenditure on jigs and fixtures amounting to Rs. 1,06,11,0647- including capital work in progress amounting to Rs. 11,18,955/- during the Financial Year 1989-90 relevant to A.Y. 1990-91. Assessee submitted that these are nothing but replacement of jigs and fixtures in the main plant and machinery and would be eligible for deduction as revenue expenditure. During the course of assessment proceedings, the assessee requested the Id. AO to allow the sum of Rs. 94,92,103/- as deduction in A.Y. 1990-91 and the balance sum of Rs. 11,18,955/- in A.Y. 1991-92 since the said amou....
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....96-97 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 production process. The assessee revenue. claimed the said expenditure as against the claim of assessee the Assessing Officer treated the expenditure as capital in nature and allowed depreciation on the same. In the first appellate proceedings, the CIT(A) reversed the findings of Assessing Officer and held the expenditure to be on revenue account. We find that in immediate preceding assessment year, the Tribunal following its earlier order in assessee's own case for assessment years 1990- 91 to 1994 revenue. held the expenditure on Jigs and Fixtures as We find no infirmity in the findings of the CIT(A) on this issue. Ergo, ground No 3 raised in the appeal by Revenue is dismissed." 17. 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." 23. Respectfully following the above decision and following the principle ....
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....been claimed crystallized during the relevant previous year, and the directions to the Assessing Officer to decide the issue after taking the same into consideration. All the rights and contentions of the Assessee are left open. The Assessee would be granted reasonable opportunity of being heard as per law. In terms of the aforesaid, Ground No 6 raised by the Revenue is allowed for statistical purposes. Ground No. 7 20. Ground No. 7 raised by the Revenue, which pertains to allowability of expenditure paid outside India in respect of research & development without deduction of tax written off during the relevant previous year, reads as under: "7. On the facts and circumstances of the case and in law, the Learned CIT(A), erred in directing the A.O. to allow expenditure paid outside India in respect of research & development without deduction of tax" 20.1. During the relevant previous year, the Assessee had incurred expenditure towards Research and Development amounting to INR.97,782 in foreign currency without deducting tax at source on the ground that the payments were made for purchase of materials for research and development purpose and the non-resident payee di....
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....) (b) AY 2001-2002 (ITA No.4372/Mum/2005, 23/02/2024) (c) AY 2000-2001 (ITA No.3055/Mum/2005, 28/11/2023) 20.5. We have perused the decision of the Co-Ordinate Bench of the Tribunal in appeal preferred by the Revenue for the AY 2001-2002 (ITA No. 4372/Mum/2005, dated 23/02/2024) and the relevant extract of the same reads as under: "36. With regard to Ground No. 9 which is in respect of allowing of deduction under section 40(a)(i) in respect of expenditure incurred in foreign currency, 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. 37. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 38. 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. 2000-01. While deciding the issue, the Coordinate Bench in ITA. No. 3055/Mum/2005 dated 28.11.2023 held as under: "109. During the year under consideration the assessee has incurred ....
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....against the Assessment Order, dated 26/12/2008, passed under Section 143(3) of the Act. Appeal By Assessee: AY 2006-07 : ITA No. 5299/Mum/2010 Ground No. 1 23. Ground No. 1 raised by the Assessee, reads as under: "1. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer in not allowing deduction in respect of fines and penalties amounting to Rs 1000/-." 23.1. Ground No. 1 raised by the Assessee pertains to disallowance of INR.1,000/- made by the Assessing Officer in respect of payment towards fines and penalties which were confirmed by the CIT(A). During the course of hearing the Learned Authorized Representative for the Assessee, under instruction, stated that the Assessee does not wish to press this ground on account of the smallness of the amount involve. Accordingly, Ground No. 1 raised by the Assessee is dismissed as not pressed. Ground No. 2 24. Ground No. 2 raised by the Assessee in the present appeal is identical to Ground No. 2 raised by the Assessee in appeal for the Assessment Year 2005-2006 and the same read as: "2. On the facts and....
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.... accordance with provisions of rule 8D." 26.1. Both sides agreed that there is no change in the facts and circumstances. Accordingly, keeping in view our finding and adjudication pertaining to Ground No. 3(b) raised in appeal preferred by the Assessee for the Assessment Year 2005-2006 contained in paragraph 7 to 7.12 above, we do not find any reason to depart from the view taken by the Co-ordinate Bench of the Tribunal in appeal for the Assessment Year 2002-2003 [ITA No. 3043 & 2899/Mum/2010, dated 24/06/2024]. Accordingly, as per the judgment of the Hon'ble Bombay High Court in the case of M/s Godrej Agronet Ltd. (supra), we direct the Assessing Officer to restrict the disallowance of administrative expenses to the extent of 2% of the total exempt income. Thus, Ground No. 3(b) raised by the Assessee is partly allowed. Ground No. 3(c) 27. Ground No. 3(c) raised by the Assessee in the present appeal is identical to Ground No. 3(c) raised by the Assessee in appeal for the Assessment Year 2005-2006 and the same reads as under: " 3(c). The Commissioner of Income-tax (Appeals) further erred in holding that since sub-section (2) and (3) of section 14A have retrospective....
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....1,33,52,800/- incurred on software was capital in nature. However, the Assessing Officer allowed the Assessee to claim depreciation under Section 32 of the Act @ 60%. 29.2. In appeal preferred by the Assessee on this issue, the CIT(A) declined to grant any relief and rejected the ground raised by the Assessee by placing reliance upon the decision of Special Bench of the Tribunal in the case of Amway India Enterprises reported in 111 ITD 112. 29.3. Being aggrieved the Assessee has carried the issue before the Tribunal. 29.4. During the course of appellate proceedings both the sides adopted the arguments made in relation to Ground No. 5 raised by the Assessee in appeal pertaining to Assessment Year 2005-2006. 29.5. We have given thoughtful consideration to the rival submissions and have perused the material on record. In our view there is no material change in the facts and circumstances. Accordingly, keeping in view our finding and adjudication pertaining to Ground No. 5 raised in appeal preferred by the Assessee for the Assessment Year 2005-2006 contained in paragraph 9 to 9.8 above, we deemed it appropriate to remand this issue back to the file of Assessing Officer wit....
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.... by Section 80IA(5) of the Act. The Assessing Officer is directed accordingly. In terms of the aforesaid directions, Ground No. 6 raised by the Assessee is allowed. Ground No. 7 31. Ground No. 7 raised by the Assessee in the present appeal is identical to Ground No. 6 raised by the Assessee in appeal for the Assessment Year 2005-2006 and the same read as: "7. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in holding that the entire Duty Entitlement Pass Book Benefit ('DEPB') credited to the profit and loss account amounting to Rs. 83,19,35,416/- ought to be taxed without appreciating the fact that as per section 28(iiid) only profit on transfer of DEPB is chargeable to tax and not the entire amount credited to the profit and loss account." 31.1. Both sides agreed that there is no change in the facts and circumstances. Accordingly, keeping in view our finding and adjudication pertaining to Ground No. 6 raised in appeal preferred by the Assessee for the Assessment Year 2005-2006 contained in paragraph 10 to 10.7. above, we overturn the decision of CIT(A). In view of the aforesaid, the issues raised by way....
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....e in the present appeal is identical to Ground No. 4 raised by the Revenue in appeal for the Assessment Year 2005-2006 and the same read as under: "3 On the facts and circumstances of the case and in law, the Ld CIT(A), erred in directing the A.O to allow the penalty charges recovered on capital goods and to reduce the total income by Rs 22,01,465/- without reducing the aforesaid amount while computing the depreciation." 34.1. Both sides agreed that there is no change in the facts and circumstances. Accordingly, keeping in view our finding and adjudication pertaining to Ground No.4 raised in appeal for the Assessment Year 2005-2006 preferred by the Revenue contained in paragraph 17 to 17.6. above, we do not find any infirmity in the order passed by the CIT(A) directing the Assessing Officer to treat penalty charges of INR.22,01,465/- recovered on capital goods as capital receipts and also not to deduct the same from the cost of assets for computing depreciation. Accordingly, Ground No. 3 raised by the Revenue is dismissed. Ground No. 4 35. Ground No. 4 raised by the Revenue in the present appeal is identical to Ground No. 5 raised by the Revenue in appeal for the ....
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....against the order, dated 29/08/2008, passed by the CIT(A) whereby the CIT(A) had partly-allowed the appeal of the Assessee against the Assessment Order, dated 28/12/2006, passed under Section 143(3) of the Act. Appeal By Assessee: AY 2004-05: ITA No. 6838/Mum/2008 Ground No. 1 39. Ground No. 1 raised by the Assessee pertains to disallowance of INR.1,32,000/- made by the Assessing Officer in respect of payment towards fines and penalties which were confirmed by the CIT(A). During the course of hearing the Learned Authorized Representative for the Assessee, under instruction, stated that the Assessee does not wish to press this ground. Accordingly, Ground No. 1 raised by the Assessee is dismissed as not pressed. Ground No. 2 40. Ground No .2 raised by the Assessee in the present appeal is identical to Ground No. 2 raised by the Assessee in appeal for the Assessment Year 2005-2006 and the same read as: "2. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer in not allowing deduction in respect of proportionate premium on lease hold land written off amountin....
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.... the appellant to allow deduction under section 80-O for royalty received under a technical knowhow agreement from M/s. Auto Techica, Columbia amounting to INR.73,578/- @ 20% of INR.3,67,890/-" 43.1. The relevant facts in brief are that the Assessee entered into a Technical Assistance Agreement, dated 14/06/2004, with Autotecnica, Colombiana S.A. for manufacture of vehicles in Colombiana. The Assessee had claimed deduction of INR.73,578/- under Section 80-O of the Act computed at the rate of 20% in respect of royalty of INR.3,67,890/- received from the aforesaid Colombian company. The Assessing Officer rejected the said claim concluding as under: "13. The assessee has claimed deduction u/s. 80-O of Rs. 73,578/-. This is claimed on account of royalty and technical know-how fees received from Colombia. The agreement filed only talks about import of CKD kits and 'Boxer' and 'Caliber' models into Colombia. Further the amended provisions of section 80-O only provide for deduction u/s. 80-O in respect of the drawing, design, investion, patent and trade mark outside India, In the circumstances it would appear clear that the amount received is not for any of these purposes. The....
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....per clause 4 of the agreement, assessee shall supply completely knocked down packs of products in primered condition consisting of standard configuration of the production in the production at Bajaj plants (referred as 'CKD Packs'). As per clause 5 of the agreement, the LICENSEE can request the assessee to delete any part from CKD pack, meaning thereby the LICENSEE shall manufacture those parts by itself. In that case, the assessee shall provide the LICENSEE a set of drawings for such parts/components and characteristics of materials to be use in the manufacture of such parts/components. For supplying the drawings, the assessee has collected technical knowhow fee from the above said licensee, on which the deduction u/s 80-O has been claimed. 10.3 The case of tax authorities is that the payment so received by the assessee was not in respect of the drawing, design, invention, patent and trade mark outside India. However, we notice that the Agreement entered between both the parties clearly provides that the technical knowhow fee is received for supplying the drawings. The relevant clause 5 reads as under:- "5. It is further agreed that should the LICENSEE request BA....
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.... in law or on facts. Therefore, respectfully following the same, we overturn the decision of Assessing Officer and CIT(A) on this issue and direct the Assessing Officer to allow deduction of INR.73,578/- as claimed by the Assessee under Section 80-O of the Act. 44. Ground No. 6 Ground No. 6 raised by the Assessee in the present appeal is identical to Ground No. 5 raised by the Assessee in appeal for the Assessment Year 2005-2006 and the same read as: "6. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in holding the action of the Assessing Officer in treating expenses incurred in relation to purchase and upgradation of software amounting to Rs. 22,61,830/- as capital expenditure." 44.1. On perusal of record it emerges that during the relevant previous year the Assessee had incurred expenditure amounting to INR.1,39,65,565/- on software out of which deduction for expenditure aggregating to INR.1,17,03,735/- was claimed by the Assessee under Section 35 of the Act and for the balance amount of INR.22,61,830/- deduction was claimed in the original return of income under Section 37(1) of the Act as revenue ex....
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....6,38,00,661/- as part of total turnover for the purpose of computing deduction under section 80HHC." 45.1. The Assessee is aggrieved by the action of Assessing Officer whereby the Assessing Officer had included amount of INR.26,38,00,661/- pertaining to the wind power generated captively as part of Total Turnover while computing deduction under Section 80HHC of the Act. Since the aforesaid action of the Assessing Officer was upheld by the CIT(A), the Assessee has carried the issue in appeal before the Tribunal. 45.2. We have head both the sides on this issue, and have perused the material on record (including judicial precedents cited during the course of hearing). 45.3. It emerged that identical issue had come up for consideration before the Tribunal in case the case of the Assessee in appeal preferred by the Assessee for the Assessment Year 2002-2003 [in ITA No. 2899/Mum/2010, dated 24/06/2024]. On perusal of the aforesaid decision we find that the Tribunal had held that the internal consumption of power will not form part of the Total Turnover for the purpose of computing the relief under Section 80HHC of the Act. The relevant extract of the aforesaid decision of the Tr....
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....tainless Steel Industries, has held that sale proceeds of scrap cannot be included as part of the Total Turnover for the purpose of section 80HHC. The Hon'ble Supreme Court has discussed this exclusion of the scrap sales from the turnover in a very detail manner. Thus, respectfully following the aforesaid judgment of the Hon'ble Supreme Court, we set aside the impugned order passed by the learned Commissioner (Appeals) and direct the Assessing Officer to exclude the scrap sale from the Total Turnover while computing the deduction under section 80HHC. Thus, ground no. 18 is treated as allowed." Following the decision of ITAT as referred supra we find that decision of ld. CIT(A) in sustaining of disallowance is not justified, therefore, after following the decision of ITAT this ground of appeal of the assessee is allowed." 45.4. The Revenue has failed to bring on record any material to differentiate the above decision of the Co-ordinate Benches of the Tribunal either in law or on facts. Therefore, respectfully following the same, we overturn the decision of Assessing Officer and CIT(A) on this issue and direct the Assessing Officer to compute deduction to be allow....
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.... "9. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer in including interest, depreciation as per Income-tax and the majority of other expenses as detailed in 'Schedule 12' instead of Rs. 16,07,27,493/- as considered by the appellant while computing 'indirect expenses' attributable to the export of traded goods for the purpose of computing deduction under Section 80HHC." 46.1. Ground No. 9 raised by the Assessee pertains to including interest, depreciation as per Income-tax and the majority of other expenses instead of Rs. 16,07,27,493/- as considered by the Assessee while computing 'indirect expenses' attributable to the export of traded goods for the purpose of computing deduction under Section 80HHC made by the Assessing Officer which were confirmed by the CIT(A). During the course of hearing the Learned Authorized Representative for the Assessee, under instruction, stated that the Assessee does not wish to press this ground. Accordingly, Ground No. 9 raised by the Assessee is dismissed as not pressed. Ground No. 10 47. Ground No. 10 raised by the Assessee, reads ....
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.... No. 2 raised by the Revenue in appeal for the Assessment Year 2005-06 in paragraph 16.1 to 16.9 above, we find no infirmity in the order passed by the CIT(A) allowing depreciation of INR.20,21,264/- claimed by the Assessee in respect of the assets given on lease. Accordingly, Ground No. 2 raised by the Revenue is dismissed. Ground No. 3 51. Ground No. 3 raised by the Revenue in the present appeal is similar to Ground No. 3 raised by the Revenue in appeal for the Assessment Year 2005-2006. Ground No. 3 raised in the present appeal reads as under: "3. On the facts and circumstances of the case and in law, the Learned CIT(A), erred allowing expenditure on dies and moulds amounting to Rs. 15,57,90,405/- as revenue expenditure." 51.1. Both sides agreed that there is no change in the facts and circumstances. Accordingly, keeping in view our finding and adjudication pertaining to Ground No. 3 raised in appeal for the Assessment Year 2005-2006 preferred by the Revenue contained in paragraph 16.1 to 16.7 above, we do not find any infirmity in the order passed by the CIT(A) directing the Assessing Officer to allow expenditure on dies and moulds amounting to INR.15,57,90,40....
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.... income amounting to Rs. 22,57,111/- disallowed u/s. 14A. 7. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing part of administrative expenditure attributable to earning exempt income amounting to Rs. 2,84,93,042/- and confirming only the said part of administrative expenditure for computation of profit u/s 115JB." 54.1. Issues raised in Ground No. 6 and 7 raised by the Revenue are identical to the issues raised in Ground No. 3(a) and Ground No. 3(b) raised by the Assessee in appeal for the Assessment Year 2005-06, respectively. In paragraph 6 to 6.11 above, while disposing off the Ground 3(a) hereinabove, we have deleted the disallowance made under Section 14A of the Act in respect of interest expenses. On the other hand, while disposing off Ground No. 3(b) in paragraph 7 to 7.12 hereinabove, we have restricted the disallowance on account of administrative expenses to 2% of the exempt income. 54.2. On perusal of the record we find that there is no change in primary facts as regards the financial position of the Assessee-company is concerned. Therefore, we do not find any reason to depart from the aforesaid view taken ....
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....- incurred in foreign currency disallowance made u/s. 40(a)(i)." 56.1. Both sides agreed that there is no change in the facts and circumstances. Accordingly, keeping in view our finding and adjudication pertaining to Ground No .7 raised in appeal for the Assessment Year 2005-2006 preferred by the Revenue contained in paragraph 20 to 20.6 above and consistent with the view taken by the Co-Ordinate Benches of the Tribunal in the case of the Assessee, we decline to interfered with the order passed by the CIT(A) on this issue. Accordingly, the Ground No. 9 raised by the Revenue is dismissed. Ground No. 10 57. Ground No. 10 raised by the Revenue reads as under: "10. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing Rs. 3,30,000/-in respect of charges paid to MEDA [implementing agency for nonconventional energy development] for the purpose of Sales tax loan." 57.1. During the relevant previous year the Assessee had made payment of INR.3,30,000/- as Maharashtra Energy Development Agency (MEDA) as processing charges for the purpose of obtaining eligibility certificate. The deduction claimed by the Assessee for the afores....
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....n the following appeals: (a) AY 2003-04 (ITANo. 1496&1420/Mum/2007, dated 09/09/2024) (b) AY 2000-01 (ITA No. 2655/Mum/2005, dated 28/11/2023 (c) AY 1997-98 (ITA No. 5030/Mum/2001, dated 13/04/2023) (d) AY 1996-97 (ITA No. 2230/Mum/2000, dated 20/06/2022) (d) AY 1995-96 (ITA No.3493/Mum/1999, dated 20/01/2021) 58.4. In view of the above, we do not find any infirmity in the order passed by the CIT(A). Accordingly, Ground No. 11 raised by the Revenue is dismissed. Ground No. 12 59. Ground No. 12 raised by the Revenue reads as under: "12. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that miscellaneous receipts, scrap sales, sundry sales, etc.) amounting to Rs. 301,41,79,718/- do not form part of "Total Turnover". 59.1. The Revenue is aggrieved by the order passed by the CIT(A) excluding miscellaneous receipts, scrap sales, sundry sales, etc. aggregating to INR.301,41,79,718/- from Total Turnover for the purpose of computing deduction under Section 80HHC of the Act. 59.2. We note that in the case of Commissioner of Income Tax-VII Vs. Punjab Stainless Steel Industrie....
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....r 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 year 1995-96, the assessee carried the issue in appeal before the Tribunal in ITA No. 3144/Mum/1999 (supra). The Co-ordinate Bench after placing reliance on the decision rendered by Hon'ble Supreme Court of India in the case of CIT vs Punjab Stainless Steel Industries Ltd. 364 ITR 144 decided the issue in favour of assessee. Since, in the impugned assessment year there is no distinguishing feature, we see no reason to take a different view. Consequently, additional ground No. 1 of the appeal is allowed." Following the dec....
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.... need not be excluded while computing 'profits of business' as these receipts do not fall under the category of 'brokerage, commission, interest, rent, charges or any other receipt of similar nature' mentioned in the definition of 'profits of business' given in clause (baa) of Explanation to sec. 80HHC of the Act." 60.2. The Revenue has failed to bring on record any material to differentiate the above decision of the Co-ordinate Bench of the Tribunal either in law or on facts. Therefore, respectfully following the same, we decline to interfere with the order passed by the CIT(A) on this issue. Accordingly, Ground No. 13 raised by the Revenue is dismissed. Ground No. 14 61. Ground No. 14 raised by the Revenue, reads as under: "14. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the A.O. to reduce 10% of other income and export incentives while computing the indirect costs and thereafter to compute trading profit for deduction u/s. 80HHC." 61.1. The Revenue is aggrieved by the directions given by the CIT(A) to the Assessing Officer to reduce 10% of other income and export incentives while computing the indirect ....
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....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: - "5.3 In additional ground No. 2 of the appeal the assessee has assailed exclusion of certain expenses i.e. "indirect cost" attributable to export of trading goods for the purpose of deduction u/s 80HHC of the Act. In first appellate proceedings the CIT(A) directed the Assessing Officer to exclude expenses attributable to other Income and export incentive, estimated at 10%. We find that similar issue had come up before the Coordinate Bench in assessee's own case for the Assessment Year 1995-96 (supra). The Tribunal after examining the issue placed reliance on the decision of Hon'ble Supreme Court of India in the case of Hero Exports vs. CIT 295 ITR 454 and the decision of Special Bench of the Tribunal in the case of Surendra Engineering Corporation vs. ACIT, 86 ITD 121 and decided the issue in favour of assessee. For the sake of brevity the findings of the Co-ordinate Bench are not reproduced hereunder. The Revenue could....
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....8/- was actually paid during the year and balance amount of Rs. 11,56,26,154/- was provided by the appellant for 507 workers in respect of which cases are pending at various labour forums on the issue of reinstatement with back wages etc. under the MRTU & PULP Act, 1971. 20.9. Thus the issue to be decided is whether provision for labour dispute made by appellant is of contingent in nature or it represents provision for liability which has crystallized during the previous year so as to be eligible for deduction while computing profits and gains of business or profession. 20.10 It is evident from the submission reproduced on para 22.2 of the Assessment Order that the appellant during the year was in receipt of two Supreme Court Orders in connection with labour disputes filed under Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971. 20.11 Based on the order of Supreme Court the appellant made provision for Rs. 11,56,26,154/- for 507 workers in respect of which cases are pending at various labour forums on the issue of reinstatement with back wages etc. under the MRTU & PULP Act, 1971. 20.12 In earlier year the....
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....ur Practices Act, 1971 [for short 'MRTU & PULP Act, 1971'] pertaining to Akurdi Unit and Waluj Unit of the Assessee. In respect of Akurdi Unit, the Company was directed to pay each workmen terminated in 1997- 98 a lump-sum amount calculated at 65 days salary, inclusive of all allowances, for the number of years each workman has actually worked irrespective of the days a workman may have put in a year. Accordingly, Compensation was paid to the 301 workmen, amounting to INR.58,750,000. Since, similar disputes pertaining to 15 employees of Akurdi Unit were pending before various Courts/Tribunal, provision of INR.54,48,718/- was created keeping in view compensation payable to the workmen as per the aforesaid judgment of the Hon'ble Supreme Court. In respect of Waluj unit, the Company had offer compensation to 1197 temporary workmen on a similar basis as that of Akurdi unit. In response to the same, 1012 temporary workmen came forward to accept the compensation and accordingly, an amount of INR.192,566,400 was paid to these 1012 workmen during the financial year 2003-2004. However, as per the judgment of Hon'ble Supreme Court the Company was required to pay compensation by adopting chan....
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.... assessment proceedings the Assessee provide explanation in relation to the loss arising on conversion of investments and claimed a Long Term Capital Loss amounting to INR.2,58,65,934/- after indexation in respect of (a)extinguishment of 20% of equity shares of Mukand Ltd. and (b)loss amounting to INR.1,07,10,987/- on redemption of units of MIP-99. The Assessing Officer rejected the aforesaid claim of the Assessee holding that there was no transfer in terms of Section 2(47) of the Act. 63.3. Being aggrieved the Assessee carried the issue in appeal before CIT(A). After examining both the transactions, the CIT(A) accepted Assessee's claim holding as under: "21. The twentieth ground of appeal is not considering loss on conversion of investments aggregating to Rs 2.53,25,577/- while computing capital gains 21.1 The AR submitted that during the previous yea, relevant to Assessment Year 2004-05 the loss arising on conversion of investments aggregating to Rs. 2,53,25.577/- was debited to the Profit and Loss Account. The said less comprised of the following: On Mukand Limited Shares 1,46,14,590 On UTI MIP Bonds 1,07,10,987 Total 2,53,25,577 2....
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....070/-should be allowed as a deduction since there was a transfer of capital asset. 21.12 Further in this connection the AR placed reliance on the following decisions: a. Kartikey Sarabhai vs. CIT (SC) (228 ITR 163) b. CIT vs. Grace Collis and Others (SC) (248 ITR 323) 21.13 The AR vehemently argued that additional shares/units were allotted to the appellant without making any payment and accordingly as per provisions of Section 55(aa) (i) and (iii) the cost of acquisition for original financial assets should be the amount actually paid by the appellant for acquiring the original financial assets and in relation to the financial asset allotted without any payment and on the basis of holding of any ether financial asset, the cost of acquisition shall be taken to be nil. 21.14 I have gone through the facts of the case and submission made by AR. 21.15 The issue to be decided is whether there is transfer of capital assets within the meaning as given in section 2(47), if yes, what should be the cost of acquisition for such assets. 21.16 According to me said issue is squarely covered by the decision of the Supreme Court in case of Kartikeya V. ....