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2012 (6) TMI 513 - ITAT MUMBAIValuation of Closing Stock - adjustment of excise duty and VAT - addition - assessee contended aforesaid inclusion to be revenue-neutral - Held that:- It is not appropriate to include the closing Modvat in the figure of closing stock without modifying the figures of purchases, sales and opening stock. Hence, keeping in view that the assessee is following consistent method of accounting and Tribunal in assessee’s own case for AY 2005-06 and 2006-07 has decided in favor of assessee. Hence, CIT(A) was fully justified in deleting the addition. Deduction u/s 80IB - dis-allowance in respect of interest income on ground that same cannot be said to have been derived from industrial undertaking - interest income assessed under the head 'income from other sources' - Held that:- Since the interest income has been assessed under the head income from other sources, therefore, the assessee is entitled to the deductions u/ 57(iii). Software expenses, Website expenses - Revenue or Capital expenditure - Held that:- Expenditure incurred on software and website are allowable as revenue expenditure. Loss incurred on discontinuation of assignment for installation of software system - business loss or capital loss - Held that:- Since aforesaid expenditure has been incurred for installation of software system (ERP) which was discontinued due to commercial expediency as going on ahead with such system may not be in line with the company’s requirement, therefore, the loss incurred by the assessee is allowable as a business loss. Export incentives - Revenue contended the same to be shown as separate income rather reducing it from cost of purchases of materials - Held that:- CIT(A) has rightly observed that consumption of raw material and packing has been increased by the provisions of export incentives of Rs.(13,142,053). Thus, deduction u/s 80IB stands reduced accordingly and AO has erred in treating the aforesaid expenses as income. In absence of any contrary finding, order of CIT(A) is upheld. Foreign exchange rate difference loss on account of conversion of CC limit to FCNRB (DL) working capital loan - business loss or capital loss - Held that:- Foreign currency exchange loss relates to the working capital loan and thus, allowable as business loss. Dis-allowance deleted.
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