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2012 (10) TMI 127 - ITAT MUMBAIUnutilized Modvat credit in respect of closing stock - addition to income - Held that:- As decided in assessee's own case for AY 2001-02 he same was restored by the Tribunal to the file of the AO with a direction to decide the same afresh after verifying the recast accounts to be prepared and furnished by the assessee in terms of sec.145A of the Act after including tax, duty, cess or fees as provided in the said section - thus following the precedent this appeal decided in favour of assessee for statistical purposes. Deduction u/s.80HHC - foreign exchange gain in the profits of business - Held that:- What is liable to be excluded from the profits of business for the purpose of computing the deduction u/s.80HHC is the income which is unrelated to the export activity of the assessee. Since the foreign exchange gain earned by the assessee for the year under consideration in respect of realization of export proceeds is directly relatable to its export activity, the same cannot be excluded from the profits of business for the purpose of computing the deduction u/s.80HHC keeping in view the ratio of Hon’ble Bombay High Court in assessee’s own case for the AY 2002-03 - in favour of assessee. Repairs and maintenance expenses - Held that:- It is not clear from the documents filed by the assessee as to whether the expenditure in question incurred by the assessee on repairs and maintenance is of revenue nature inasmuch as it is very difficult to come to a conclusion that the expenses incurred by the assessee on repairs and maintenance were on purchase of spare parts of plant and machinery and miscellaneous work done to the building and there was no new capital asset acquired by the assessee as a result of incurring of the said expenses. Thus the expenses in question incurred by the assessee were rightly treated by the AO as capital expenditure - against assessee. TP adjustments - CIT (A) deleted the addition made by AO - Held that:- As decided in assessee's own case in AY 2006-07 that when assessee is dealing with an AE, at least there are no commercial risks, no marketing costs and there could be several other factors as well justifying a normal discount as the assessee could indeed go to many important customers. It hardly needs to be emphasized that even in independent business situations granting discount is a normal occurrence, and unless the Assessing Officer demonstrates that the discount so allowed would not have been allowed in an arm’s length situation, ALP adjustment cannot be made in respect of the same - against revenue. Non deduction of TDS - Disallowance of development expenses - CIT (A) deleted the addition made by AO - Held that:- The amount in question paid by the assessee to Dresser Rand Company, USA toward development expenses is not chargeable to tax in India in the hands of the said non-resident, & the assessee has deducted the tax at source from development charges paid to Dresser Rand Company, USA in the next financial year and the tax so deducted having been paid before the due date of filing return, the disallowance u/s.40(a)(i) is not sustainable on this ground also as per the amendment made in the relevant provisions which has been held to be retrospective - against revenue.
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