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2012 (6) TMI 482 - ITAT JODHPURDisallowance in respect of compounding fee under the sales-tax Act, debited to the account head 'sales tax' - the assessee's contention that the compounding fee was not penal in nature, but only to avoid litigation - Held that:- As decided in Haji Aziz & Abdul Shakoor Bros v. CIT [1960 (11) TMI 15 (SC)]that only those disbursements as made for the purpose of business, i.e., that enable a person to carry on the business and to earn profit in that business would form a permissible deduction. An amount paid for infraction of law is not allowable, being not a normal incident of business.If a person carries on his business activity in a manner that renders him liable to penalty, it cannot be said to be a commercial loss, which could be claimed as a deductible expense - The finding/s by the ld. CIT(A), is, again, without any basis either in law or in fact/s - the composition fee being paid in addition to the amount of tax and interest thereon, is not understood as to how he holds that there is no difference in the amount that the assessee would have been liable to pay in any case, i.e., even if the impugned transactions were disclosed as inter-state sales in the first place, instead of, and as against, inter-branch transfers - assessee has not clarified this aspect providing for payment of fee at an amount equal to the amount of tax sought to be evaded, and to which his attention was specifically adverted to during hearing - in favour of revenue. Disallowance of freight on raw material - AO disallowed the same as being not verifiable - Held that:- CIT(A)considered the expenditure incurred represented unloading expenses on raw material as the entire amount had been paid to labour, and for which proper vouchers, though self- made, are available - against revenue. Deletion of disallowance of the assessee's claim for additional depreciation - AO contested non-furnishing of the eligibility certificate from the Chartered Accountant - Held that:- The assessee had filed eligibility certificate along with the return of income during the course of the assessment proceedings - the entire depreciation, including additional depreciation u/s. 32(1)(iia), is to be deducted in computing the 'written down value' of the relevant block of assets u/s. 43(6) the CIT(A), after admitting the assessee's claim has rightly restored the matter back to the file of the AO for the consideration of the same on merits - against revenue.
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