TaxTMI 
TaxTMI 
2026 (8) TMI 1025
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.... the expenditure is incurred wholly and exclusively for its business and that the expenditure resulted in promotion of its business. 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A)'s erred in treating the expenditure of Rs. 206,57,00,000 /- incurred on enabling facility as Revenue Expenditure which otherwise is rightfully treated by AO as Capital Expenditure as being incurred on assets of enduring nature." 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A)'s erred in considering the Revenue receipts of Rs. 2,65,94,778/- culled out by AO, from Capital W.I.P. as Capital receipts ignoring the fact that which are in the nature of recoveries from supplier/contractor." 5. (a). "On the facts and in the circumstances of the case and in law, the Ld. CIT(A)'s erred in deleting the addition of Rs. 7,788/- made by AO on account of depreciation on vehicles without appreciating the facts that the vehicles are being used by the assessee company for the purpose of its business and not for running the same on hire." (b). "On the facts and in the circumstances of the case and in law, the Ld. CIT(A)'s e....
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....5,27,660/- under the normal provisions and Rs. 27,124,57,58,046/- u/s. 115JB, with a revised refund claim of Rs. 27,87,10,520/-. 2.1. Thereafter, the Assistant Director of Income-tax, CPC issued a notice dated 29/05/2020 u/s. 143(1)(a), proposing an adjustment of Rs. 1,855,39,15,035/- on account of (i) inconsistent reporting of ICDS adjustment amounting to Rs. 555,92,64,363/-, and (ii) inconsistent reporting of exempt income of Rs. 1,299,46,50,672/- in the return of income. The assessee filed an online response objecting to the proposed adjustments and furnished explanations in support of its claim. 2.2. However, while processing the return, the CPC issued an intimation dated 23/06/2020 u/s. 143(1), without considering the assessee's response, making the proposed adjustments and consequently raising a demand of Rs. 650,34,73,660/-. Aggrieved by the order passed by Ld.AO, the assessee preferred an appeal before the Ld.CIT(A). 2.3. Before the Ld.CIT(A), the assessee inter alia challenged the adjustments made by CPC u/s. 143(1) on account of alleged inconsistency in reporting ICDS adjustments of Rs. 5,55,92,64,363/- and exempt dividend income of Rs. 1,299,46,50,672/-, bes....
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....f the employees concerned and to efficiently continue its business. Therefore, in our considered view the amount paid towards education of employee's children which is for the welfare of the employees ought to be allowed as deduction under section 37(1) of the Act. In our considered opinion such expenditure is incurred wholly and exclusively for the purpose of business. It would be pertinent to refer to the decision of the Hon'ble Supreme Court in the case of Sri Venkata Satyanarayana Rice Mill Contractors Co.,[223 ITR 101] wherein the Hon'ble Supreme Court held that as long as the expenditure is made for the purpose of the business and the payment made is not by way of penalty for infraction of any law, the same would be allowable as a deduction. In the same judgement the Hon'ble Supreme Court further held that any contribution made by the assessee public welfare fund which is directly connected or related with the carrying on of the assessee's business or which results in the benefit to the assessee's business has to be regarded as an allowable deduction. In our considered view section 40A(9) of the Act was introduced to avoid tax evasion in the guise....
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.... the Ld.CIT(A). Relevant portion of the Tribunal's order reads as under:- "64. We have given thoughtful consideration to the rival submissions. The impugned dispute has now been settled by the Hon'ble Supreme Court in the case of United Glass Mfg., Co., Ltd., [28 Taxman.com 429] wherein the Hon'ble Supreme Court inter alia was seized with the following question for determination: "i) Whether club membership fee for employees incurred by the assessee is a business expense and liable to be deducted under section 37(1) of the Income-tax Act, 1961" 65. And the Hon'ble Supreme Court inter alia held that "as far as Question No. 2 is concerned, we find that a series of judgments have been passed by High Courts holding that club membership fees for employees incurred by the assessee is business expense under section 37 of the Income Tax Act, 1961. We also find that none of the decisions have been challenged in this court. Even otherwise, we are of the view that it is a pure business expense, "Respectfully following the decision of the Hon'ble Supreme Court, we decline to interfere with the findings of the Ld. CIT(A). Ground No. 2 is dismissed." ....
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....nature of expenditure incurred for setting up KVA line at Viramgam, construction of costal road at Paradeep Port Trust and supply of transmission line at Paradeep colony. The Hon'ble Supreme Court in the case of CIT v. Madras Auto services Ltd. [233 ITR 468] has considered the case where the assessee had taken a premise on lease for 39 years and demolished the said premises and constructed new building at its own expenses. The Hon'ble Supreme Court held that "Right from inception, the building was of the ownership of the lessor. Therefore, by spending this money, the assessee did not acquire any capital asset. The only advantage which the assessee derived by spending the money was that it got the lease of a new building at a low rent. From the business point of view, therefore, the assessee got the benefit of reduced rent. The expenditure is, therefore, to be treated as revenue expenditure." Considering the nature of expenditure in the light of the decision of the Hon'ble Supreme Court we do not find reason to interfere with the findings of the Ld. CIT(A). Ground No. 6 is dismissed." We have perused the submissions advanced by both sides in light of the record placed....
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....t-term deposit of surplus funds acquired in public issue of shares should be assessed as business income or income from other. sources. Thus, the facts of the cases relied upon by the Assessing Officer are totally different from the facts of the case in hand. Considering the facts of the case in totality, we are of the considered view that the total income mentioned elsewhere at 7.35,42,57,639/- are capital receipts and have been rightly reduced from the Work-in-Progress. Ground No. 8 is accordingly allowed." We have perused the submissions advanced by both sides in light of the record placed before us. 6.2. We find that the issue relating to the characterisation of receipts reduced from Capital Work-in-Progress is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case for AY 2011-12, the relevant findings whereof have been reproduced supra. The Ld.AR relied on the ground-wise compilation and the written submissions in support of the order of the Ld.CIT(A). No distinguishing feature, either on facts or in law, has been pointed out by the Revenue warranting a departure from the view consistently taken by coordinate bench of th....
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....e claim before the Ld.CIT(A) was confined only to the grant of consequential depreciation, being the differential depreciation of Rs. 604,06,29,894/- as against Rs. 378,12,00,959/- allowed by the Ld.AO, arising on account of the disallowance of additional depreciation in the immediately preceding assessment year. Thus, the grievance articulated in the memorandum of appeal does not correctly reflect either the issue adjudicated by the Ld.CIT(A) or the relief granted by him. 8.2. In these circumstances, we find no infirmity in the observations of the Ld. CIT(A). Since the Revenue itself has acknowledged that the ground is founded on an incorrect factual premise, the same does not survive for adjudication. Accordingly, Ground No. 6 raised by the Revenue is dismissed as misconceived and rendered infructuous. 9. Ground No.7: Bad Debts, Bad Advances and Bad Claims Written Off The Revenue has challenged the action of the Ld.CIT(A) in deleting the addition of Rs. 10,48,37,422/- made by the Ld.AO in respect of bad debts, bad advances and bad claims written off. 9.1. The Ld.AR invited our attention to paragraphs 14, 32 of the assessment order and paragraph 2.1.9 of the impugned o....
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....s or in law has been pointed out by the Revenue, nor has it been demonstrated that the aforesaid decision has been reversed, modified or stayed by any higher judicial forum. Respectfully following the binding decision of the Co-ordinate Bench in the assessee's own case, we uphold the order of the Ld.CIT(A). Accordingly, Ground No.7 raised by the Revenue is dismissed. 10. Ground No.8: Amortisation of Premium on Forward Contracts The Revenue challenged the action of the Ld.CIT(A) in allowing the assessee's claim for amortisation of premium on forward contracts amounting to Rs. 57,37,00,000/-. 10.1. The Ld.AR invited our attention to paragraphs 16 & 40 of the assessment order and paragraph 3.1 of the impugned order. It was submitted that the Ld.AO had disallowed the claim on the ground that under the mercantile system of accounting, only liabilities which have crystallised during the relevant previous year are allowable as deduction. The Ld.AR submitted that the premium paid on forward contracts represented an ascertained liability arising under legally binding contracts and was rightly allowed by the Ld.CIT(A). 10.2. Referring to the ground-wise compilation ....
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....icer hedging loss is speculative in nature. For the reasons discussed herein above, we reiterate that there is a legally binding enforceable contract for purchase of foreign currency on a future date at the pre-determined rates. Therefore, commodity loss is also cannot be treated as speculative in nature and the same has to be allowed and rightly done so by the Ld. CIT (A) and no interference is called for. Ground Nos. 12 and 13 are also dismissed." We have perused the submissions advanced by both sides in light of the record placed before us. 10.3. We find that the issue arising in the present ground is no longer res integra and stands squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case for AY 2011-12, the relevant findings whereof have been reproduced hereinabove. The Ld.AR has demonstrated, from the ground-wise compilation and the written submissions, that the facts and circumstances obtaining during the year under consideration are identical to those considered by the Co-ordinate Bench. No distinguishing feature on facts or in law has been pointed out by the Revenue, nor has it been shown that the aforesaid decision ha....
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....f the Tribunal read as under: "38. Section 42 of the Act which contains special provisions for deduction in the case of business for prospecting, extraction or production of mineral oils. It has been provided that there shall be made in lieu or in addition to the allowances admissible under the Act and such allowances are specified in the Production Sharing Contract. Reading the provisions of Section 42 of the Act with Para No. 17.2.1 (Supra) we are of the considered view that the deduction @100% is allowable for both capital and revenue expenditure incurred in respect of exploration and drilling expenses. Therefore, the claim of survey expenditure of Rs. 333,43,69,242/- is to be allowed. We direct accordingly. Ground No. 9 is allowed." 11.4. We have perused the submissions advanced by both sides in light of the record placed before us. We find that the issue arising in the present ground is no longer res integra and stands squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee's own case for AY 2011-12, the relevant findings whereof have been reproduced hereinabove. The Co-ordinate Bench, after considering the scope of section 42....