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2014 (6) TMI 945 - AT - Income TaxDisallowance being rural development expenditure - Held that:- Respectfully following the decision of the Tribunal in assessee’s own case for 2000-01 and 2001-02 and for A.Yrs. 1998-99 and 1999-2000, we direct the AO to allow the expenditure incurred on Rural Development. - Decided in favour of assessee Addition of MODVAT (CENVAT) to be made in closing stock - Held that:- No addition of MODVAT (CENVAT) to be made in closing stock in AY 2001-02 as held by CIT(A). However if it is held that closing stock for AY 2001-02 to be increased by CENVAT of ₹ 4,83,99,629 as held by AO, then opening stock in AY 2002-03 shall also be increase by CENVAT of ₹ 4,83,99,629. The AO may be directed accordingly. Deduction claimed u/s 36(1)(iii) for interest on loans taken for new projects/ expansion / modernization - Held that:- We find that in the earlier years the claim of interest has been allowed making this grievance of the assessee infructuous. Allowance of marketing and technical knowhow expenses - assessee claimed that if the said expenditure is not allowed as Revenue expenditure, then the same may be considered for the purpose of depreciation - Held that:- We find that the said expenditure has been allowed as Revenue expenditure in A.Y. 2000-01 thereby making this grievance of the assessee becomes infructuous and it is dismissed accordingly. Premium on early redemption of debentures - Held that:- We find that the entire expenditure has been allowed in assessment year 2000-01, therefore there remains nothing to be allowed during the year under consideration. Addition u/s 43B(f) being provision made for leave salary - Held that:- In order to apply the provisions of Sec. 43B not only should be the liability to pay the tax or duty be incurred in the accounting year but also should be statutorily payable in the accounting year. In our considered opinion, the provision for leave salary is not a statutory liability but only a contractual liability which is payable only if the employees resigns or retired from the services. We also find that the Hon’ble Calcutta High Court in the case of Exide Industries Ltd. (2007 (6) TMI 175 - CALCUTTA High Court ) has struck down Sec. 43B(f) being arbitrary, unconscionable and dehors the Apex Court decision in the case of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME Court] . Respectfully following the afore discussed decisions, we direct the AO to allow the claim of provisions for leave salary - Decided in favour of assessee Payment made for restructuring of 161h & 17th series debentures - Held that:- The Hon’ble Supreme Court in the case of Associated Cement Co. Ltd. [1988 (5) TMI 2 - SUPREME Court] has laid down that whereby incurring expenditure, no capital asset is created but the expenditure enable the assessee to avoid a recurring revenue expenditure in future, the same would be revenue expenditure. Further, if an expenditure is of the nature described in any of the specified Sec. i.e. Sec. 30 to 36, the same cannot be fall within Sec. 37(1) of the Act. We find that the facts and issues are entirely covered by the decision of the Hon’ble Gujarat High Court in the case of Mohit Marketing Vs CIT [2005 (4) TMI 546 - GUJARAT HIGH COURT ] thus we direct the AO to allow the entire claim - Decided in favour of assessee Depreciation on goodwill - Held that:- Respectfully following the decision of the Co ordinate Bench in assessee’s own case for A.Y. 2000-01., we direct the AO to allow the claim of depreciation on Goodwill. - Decided in favour of assessee MAT computation - Held that:- Not to reduce the claim of deduction u/s. 80IB of the Act by allocating Head Office expenses to profits derived from eligible units. Enhancement and withdrawing the exemption u/s lOB on the ground that undertaking is not approved by the Board particularly appointed u/s 14 of the Industrial (Development and Regulation) Act - Held that:- If the claim of deduction/exemption is allowed in earlier years, the same cannot be withdrawn in subsequent years unless deductions allowed in the initial year is withdrawn. We find that there is no change in the facts which were in existence during the year vis-à-vis the claim of exemption u/s. 10B of the Act. We also find that this is not the first year of claim therefore the department cannot deny the benefit of Sec. 10B without withdrawing the claim allowed in the initial assessment year. Recompute the deduction u/s. 80HHC under MAT provisions as per law and keeping in view the decision in the case of Bharati Information Tech. Pvt. Ltd. [2011 (10) TMI 19 - Supreme Court of India ]. Disallowance u/s 14A - Held that:- We find that the major investment of the assessee is in its group companies. After considering this facts, the Ld. CIT(A) has restricted the disallowance to ₹ 1.87 lakhs. We do not find any reason to interfere with the findings of the Ld. CIT(A).
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