TaxTMI 
TaxTMI 
2026 (5) TMI 1127
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....ew Delhi dated 31.01.2018 for AY 2012-13 against the order of assessment passed u/s 143(2) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 30.09.2008 for AY 2008- 09, u/s 143(3) dated 19.12.2011 for AY 2009-10, dated 31.03.2014 for AY 2010-11, u/s 144C r.w.s. 143(3) dated 27.03.2018 for AY 2011-12 and dated 28.0.2016 for AY 2012-13 by the Assessing Officer (hereinafter referred to as 'ld. AO'). Identical issues are involved in these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. ITA No. 3768/Del/2015 - Asst Year 2008-09- Revenue Appeal 2. The ground No. 3 raised by the Assessee raised by the revenue is general in nature and does not require any specific adjudication. 3. The ground No. 1 raised by the Assessee is challenging the deletion of disallowance made under section 14A of the Act by the Learned CITA. 3.1. We have heard the rival submissions and perused the materials available on record. During the year under consideration, the Assessee earned dividend income of Rs. 2,93,052 and claimed exemption under Section 10(34) of the Act. The Assessee pleaded that no expenditure was incu....
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.... 177,17,35,770. The revised return of income was filed on 4-2-2010 declaring total income of Rs 176,31,56,520. The return filed was duly processed under section 143(1) of the Act and the case was selected for scrutiny. 4.2. The Assessee is having its manufacturing facilities at Raj Gangapur in the state of Orissa for manufacturing various types of cement and refractory. In addition, it is also having mines at Langeberna. The Assessee is having the state of art technology for manufacturing cement in its plant where lot of plant and equipments are used on continuous basis. The plant was established way back in 1949. There has been requirement to maintain the plant so that it may run efficiently and continuously without compromising on the quality of the finished product. In order to maintain efficiency of the plant and equipment, the Assessee has to maintain various spare parts in its stores so that in case of any necessity, they can be immediately changed so that the production is not affected. Over the period, the Assessee purchased various spare parts as per the requirement from time to time. The total spare parts maintained in its stores runs into thousands of numbers which ar....
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....hich have not moved for a long time or slow moving was submitted before the learned AO during the course of hearing. Accordingly, Senior General Manager (Engineering) formed a committee comprising Deputy Chief Manager (Mechanical), Manager (Electrical) and Senior Manager (C&I) vide his note dated 4-03-2008. This note was also submitted before the learned AO during the course of hearing. 4.4. The above said committee physically examined each item and based upon the physical examination came to the conclusion and mentioned the present condition thereof against each item. They also indicated the residual value of each item depending upon the physical condition and life of the items. Note dated 6-03-2008 prepared by the above said committee together with the approval of the Executive Director for write off of the slow moving / non-moving items was submitted before the learned AO during the course of hearing. Complete list of items identified as slow moving and non-moving based upon the life and physical condition of each item showing thereon, the name of item, their unit of measurement, the last date of their receipt by the Assessee, the value of each item as appearing in the books ....
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....d CITA. Further we find that the decision taken by the Assessee Company to write off the slow moving and non moving inventory was in accordance with AS-2 issued by ICAI which is mandatory for the Assessee Company to follow as per the provisions of Companies Act, 1956. The write off of inventory is duly backed by supporting documentary evidences after duly identifying each and every item of non moving and slow moving spares and after considering its utility value backed by technical report. Hence we do not find any infirmity in the action of the learned CITA deleting the addition. Accordingly, the ground number 2 raised by the revenue is dismissed. 5. In the result, the appeal of the revenue for assessment year 2008-09 is dismissed. ITA No. 4069/Del/2015 - Asst Year 2008-09- Assessee Appeal 6. Ground No. 1 raised by the assessee is challenging the confirmation of addition made on account of unsecured loans in the sum of Rs. 65,41,000/-. 6.1 We have heard the rival submissions and perused the material available on record. The assessee had received deposits from general public pursuant to the newspaper advertisement given. The assessee as per the provisions of Companies Ac....
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....he deposits received during the year in the sum of Rs. 65,41,000/- as unexplained cash credit u/s 68 of the Act without resorting to make any independent enquiry despite the fact that the address of the depositors were indeed given. Even confirmations were placed on record before the ld AO. This action was upheld by the ld CIT(A). 6.6 We find that assessee is entitled to received public deposits from general public as per the provisions of Companies Act, 1956. The assessee had received the said deposits pursuant to newspaper advertisement given which is in accordance with provisions of Companies Act, 1956. All the deposits were received only through regular banking channels. The interest is duly paid to the depositors. The assessee had bifurcated the list of deposits into 3 categories detailed supra. Wherever PAN of the depositors are not available, the assessee had indeed obtained Form No. 60. However, the name and address of the depositors, confirmation of the depositors and deposit application form were duly obtained and submitted before the ld AO. When these documents are placed on record by the assessee, the primary onus stands discharged from the side of the assessee. Ther....
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....ia Pvt. Ltd for carrying out Environment Impact Assessment (EIA) study and to prepare environment management plan for proposed modernization cum expansion of existing cement plant. This payment was claimed as revenue expenditure. The ld AO disallowed the said expenditure by holding that the environment study was prerequisite for bringing into existence the expanded and modernized plant, which in turn would result into enduring benefit to the assessee and therefore capital in nature. This action of the ld AO was upheld by the ld CIT(A). 8.2 We find that this issue is covered in favour of the assessee by the order of this Tribunal for AYs 2005-06 and 2006-07 in ITA Nos. 3202 and 3203/Del/2011 respectively dated 29.06.2015 in its own case. Further, it is also covered by the decision of this Tribunal for AY 2007-08 in ITA No. 4068/Del/2015 dated 23.09.2025 in its own case. The ld AR also submitted that from AY 2010-11 onwards, the very same issue had been decided in favour of the assessee by the ld CIT(A) by relying on the order of the Tribunal and the revenue had not preferred any appeal to this Tribunal from AY 2010-11 onwards on the impugned issue. 8.3 In the result, the Groun....
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....o Rs. 12.85,76,254/- being revenue in nature, on account of staff costs, rent, rates and taxes, insurance and other miscellaneous expenses u/s 37(1) of the Act as revenue expenditure. 2.0 That on the facts and in the circumstances of the case, necessary directions may be given to A.O. to allow additional depreciation u/s 32(1)(ia) amounting to R 20.81,98,275/-in terms of Sec. 32(1)(iia) on assets acquired on and after 01-04-2005 but before 01-04-2007. 3.0 That on the facts and in the circumstances of the case, and without prejudice to Ground No. 2.0 taken here-in-above, necessary directions may be given to A.D. to allow balance 10% of the additional depreciation amounting to Rs. 91,86,277/- in terms of Sec. 32(1)(iia) in the current assessment year on the assets which were put to use in the preceding assessment year for less than 180 days 4.0 That on the facts and circumstances of the case, necessary directions may be given to A.O. to allow Profit on sale of Fixed Assets and Investments amounting to Rs. 9,67,60,487/-, as capital receipts while computing Book Profit u/s 115JB of the Act. 5.0 That on the facts and circumstances of the case, necessa....
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....ingly, additional ground No. 1 raised by the assessee is allowed for statistical purposes. 13. Claim of additional depreciation in second and subsequent years u/s 32(1)(iia) of the Act for assets acquired after 01.04.2005 but before 01.04.2007- Rs. 20,81,98,275/-. We have heard the rival submissions and perused the material available on record. The assessee is entitled to claim additional depreciation @20% on all eligible new asset required on or after 01.04.2005 but before 01.04.2007. It is not in dispute that the assessee had duly fulfilled all the conditions prescribed in Section 32(1)(iia) of the Act. This issue, in our considered opinion, requires verification by the ld AO with regard to the computation of figures and hence we deem it fit and appropriate, to restore this issue to the file of the ld AO for de novo adjudication in accordance with law. Accordingly, the additional ground No. 2 raised by the assessee is allowed for statistical purposes. 14. Claim of balance additional depreciation on assets put to use for less than 180 years in the preceding financial year -91,86,277/- This issue is only consequential to additional ground No. 2 raised by the assessee wh....
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....l submission and perused the material available on record. During the year under consideration, the assessee made provision for doubtful debts by debiting the same in the profit and loss account and reducing the said provision from the total value of sundry debtors in the balance sheet. The same was voluntarily added back in the computation of income under normal provisions of the Act by the assessee. Now the assessee seeks to withdraw the said voluntary disallowance and claim the deduction on account of provision for doubtful debts by placing reliance on the decision of the Hon'ble Supreme Court in the case of Vijaya Bank Vs. CIT reported in 323 ITR 166 and based on coordinate bench decision of Delhi Tribunal in the case of Religare Finvest Ltd Vs DCIT in ITA No. 4796/Del/2017 dated 13.07.2023. 20.2 It is a fact that assessee while making the provision for doubtful debts had not credited the concerned debtor's account. This fact is evident from the disclosure made in the balance sheet for the year ended 31.03.2009 under Schedule 8 wherein, the gross value of sundry debtors have been reflected and the provision for doubtful debts were merely reduced thereon and the net debtors h....
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....akhs in respect of expenditure on account of payment to retired Director. 23.1 We have heard the rival submissions and perused the material available on record. During the year under consideration, the assessee paid Rs. 25 lakhs to one retired Director as retrial reward as per the policy of the assessee and the same was also approved by the Board of Directors. This payment was claimed as revenue expenditure. The ld AO disallowed the said payment on the alleged ground that the assessee had rewarded an employee by making payment absolutely independent of the gratuity and without any restriction regarding the monetary limit. The case of the revenue is that the said expenditure is not wholly and exclusively incurred for the purpose of business of the assessee. This action of the ld AO was upheld by the ld CIT(A). 23.2. The ld AR before us relied on the decision of Hon'ble Madras High Court in the case of CIT Vs. Chandrie and Co Private Limited reported in 212 ITR 63 (Mad). This was a case wherein gratuity was paid to ex working Director being ex gratia payment based on the policy of the company supported by resolution passed by the Board of Directors. The Hon'ble High Court uphel....
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.... not be treated as road transport vehicle within the meaning section 33(1) of the Act. The ld AR also placed reliance on the decision of the Hon'ble Madras High Court in the case of CIT Vs. Bajrang Enterprises reported in 258 ITR 448 (Mad). For the sake of convenience, the said order is reproduced below:- "The question referred to us at the instance of the Revenue is: "Whether, the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee is entitled to allowance under section 32A in respect of dumpers used in the business of mining operation on contract?" The assessment 1980-81. 2. The assessee which owned dumpers was, during the relevant assessment year, using the terms of a contract for the purpose of mining, the contract being with the owner of the mine, Dalmia Magnesite Corporation Ltd. The claim for investment allowance on those dumpers by the assessee was negatived by the Assessing Officer, but was allowed by the Commissioner and the Commissioner's order was upheld by the Tribunal. The Commissioner, in the course of his order, has referred to a circular issued by the Central Board ....
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....r allowing the claim of expenditure on account of provision for leave encashment in the sum of Rs. 26,14,499/-. This matter requires factual verification by the ld AO and hence we deem it fit and appropriate to restore this to the file of the ld AO for de novo adjudication in accordance with law. The ld AO shall consider the provision of Section 43B(f) of the Act and also the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Exide Industries ltd reported in 315 CTR 62 (SC) while deciding the issue. 29. In the result, the appeal of the assessee is partly allowed for statistical purposes. ITANo. 3877/Del/2017 for AY 2011-12- Assessee appeal ITA NO 3877/Del/2017 Corresponding to AY 2010-11 of Assessee Appeal Ground No. 1 Ground No. 1 Ground No. 2 Ground No. 11 Ground No. 3 Ground No. 8 Ground No. 4 Ground No. 12 Ground No. 5 Ground No. 13 Ground No. 6 Ground No. 10 Ground No. 9 Ground No. 15 30. Ground No. 7 raised by the assessee for AY 2011-12 is identical to additional ground No. 3 raised for AY 2009-10 supra. The decision rendered by us hereinabove for additional Ground No. 3 in AY 2009-10 shall app....
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....etermined the ALP of corporate guarantee @0.5% per annum and granted partial relief to the assessee. 35.2. We find that the ld CIT(A) had followed the decision of Hon'ble Bombay High court in the case of CIT Vs. Everest Canto Cylinder Ltd referred supra wherein the ALP of corporate guarantee had been determined at 0.5% of value of guarantee and hence, we do not find any infirmity in the said order. However, the other arguments of the assessee that furnishing of corporate guarantee per se is not an international transaction and is merely only a shareholder's activity not warranting any recovery of fees from the AEs had to be decided against the assessee as it is impliedly an international transaction and need to be benchmarked separately. It is well settled that as per the jurisprudence of the Chapter X of the Income Tax Act, the assessee would not have extended the corporate guarantee to a third party in similar circumstances. Hence, issuance of corporate guarantee had to be construed as a separate international transaction within the meaning of Section 92B of the Act and need to be benchmarked separately by determining the Arm's Length Price thereon. Hence, the contentions of t....
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....except drawing an adverse inference by placing reliance on the report of the Investigation Wing which is also not provided to the assessee for rebuttal. Hence, we are constrained to follow the decision of various Tribunals referred supra wherein it was held that weighted deduction u/s 35(1)(ii) of the Act would be admissible to the donor on contributions made to Herbicure Healthcare Bio Herbal Research Foundation. Respectfully following the same, the ground Nos. 7 and 8 raised by the assessee are allowed. 37. Ground No. 9 raised by the assessee is challenging the confirmation of disallowance of provision for doubtful debts amounting to Rs. 74,28,835/- while computing book profit u/s 115JB of the Act. 37.1 We have heard the rival submissions and perused the material available on record. The assessee claimed deduction on account of provision for bad and doubtful debts both under the normal provision as well as in the computation of book profits u/s 115JB of the Act. However, with regard to allowability of same while computing the book profit u/s 115JB of the Act, we find that the said item squarely falls in Explanation 1(i) of Section 115JB(2) of the Act wherein, the subject me....