Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 600 - AT - Income TaxDisallowance of deduction u/s 10B of the Act - Sale of hoops and wrappers – Held that:- The contention of the Assessee accepted to the extent that Hoops & Wrappers are the packing materials like other Store Bardana - The income from the sale of the said packing material has consistently been allowed to the assessee in the earlier years - The revenue could not bring any point to the effect that sales from Hoops & Wrappers is different from the sales of Store Bardana Sales – thus, the income derived from the sale of Hoops & Wrappers Sales is directed to be allowed. Discount/Bonus on Store Items – Held that:- In the earlier years also, the issue has already been restored back to the file of the A.O., so it will be just and proper for this year also to direct the A.O. to decide the same as per the directions given by the co-ordinate bench of this Tribunal for the earlier years relating to the same issue – the matter remitted back to the AO. Staff Agreement Deposit Forfeited – Held that:- The decision in Century Textiles & Industries Ltd. Versus Asstt. Commissioner of Income Tax [2013 (10) TMI 549 - ITAT MUMBAI] followed – the amount did not qualify for exemption under section 10B as these are not held to be the receipts derived from the industrial undertaking – Decided against Assessee. Unclaimed Salary Forfeited – Held that:- The receipts on this account are in the nature of the receipts credited in ‘staff agreement deposited forfeited’ as well as ‘notice period salary received from staff’ – assessee could not bring as to why these receipts should not be disallowed, especially when the receipts of this nature have already been disallowed in the earlier years - the disallowance under this head is upheld. Treatment of capital receipt as revenue receipt – Reduction in claim of mining lease expenses - Treating business Income as ‘Income from house property – Disallowance of interest paid on income tax – Disallowance of Interest paid to SSI units on delayed payments –Disallowance of provision in respect of difference of electricity duty on colony consumption payable to CSEB and provison for reimbursement to consignment agent on account of entry tax - Held that:- The decision in Century Textiles & Industries Ltd. Versus Asstt. Commissioner of Income Tax [2013 (10) TMI 549 - ITAT MUMBAI] followed - The CIT(A) confirmed the action of the AO of treating capital receipt being security deposit forfeited, as revenue receipt as against capital receipt treated by the appellant – the deduction has not been made by the appellant, there would not be any effect on the total income – the decision of the CIT(A) upheld. Disallowance of amounts paid to various authorities - Disallowance of leasehold amount written off - Held that:- In the earlier years aslo, the issue has already been restored back to the file of the A.O., so it will be just and proper for this year also to direct the A.O. to decide the same as per the directions given by the co-ordinate bench of this Tribunal for the earlier years relating to the same issue – thus, the matter is remitted back to the AO. Disallowance of foreign travelling expenses – Held that:- As decided in assessee’s own case, the expenditure on foreign travel expenses of Director’s wife may be allowed, depending on the status of the parties, nature or character of the trade or venture, the purpose for which the expenses were incurred and the object sought to be achieved by incurring such expenses. In the present case, the ITAT after considering all facts on record has allowed the claim –Decided in favour of Assessee. Disallowance of deduction u/s 80HHC of the Act – Computation of book profit u/s 115JB of the Act - Held that:- The decision in Century Textiles & Industries Ltd. Versus Asstt. Commissioner of Income Tax [2013 (10) TMI 549 - ITAT MUMBAI] followed - The deduction u/s 80HHC in the case of MAT assessment, is to be worked out on the basis of adjusted book profit and not on the basis of profit computed under the regular provisions of law applicable to the computation of 'profit and gains of business or profession' – Decided in favour of Assessee. Addition of sales tax to the total turnover for the purpose of Section 80HHC of the Act – Held that:- The decision in Commissioner of Income-Tax Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME Court] followed – amendments to section 80HHC(3) indicate exclusion of book profits -sales tax and excise duty also do not have any element of "turnover" which is the position even in the case of rent, commission, interest etc. - It is important to bear in mind that excise duty and sales tax are indirect taxes - They are recovered by the assessee on behalf of the Government - if they are made relatable to exports, the formula under section 80HHC would become unworkable – Decided against Revenue. Claim for DEPB incentive as per section 80HHC of the Act – Held that:- Relying upon Topman Exports Vs. CIT [2012 (2) TMI 100 - SUPREME COURT OF INDIA] - DEPB is chargeable to income tax under the head ‘Profits and Gains of Business or Profession’ even before it is transferred by the taxpayer - Under Section 28(iiid) of the Act, any profit on transfer of DEPB is chargeable to income tax under the head ‘Profits and Gains of Business or Profession’ as an item separate from cash assistance under Section 28(iiib) of the Act - The face value of the DEPB will fall under Section 28(iiib) of the Act, the difference between the sale value and the face value of the DEPB will fall under Section 28(iiid) of the Act - The cost of acquiring DEPB is not nil because the person acquires it by paying customs duty on the import content of the export product and the DEPB which accrues to a person against exports has a cost element in it – thus, the AO is directed to compute the income of the assessee. Deletion made for arrears of depreciation – Computation of Book profits u/s 115JB of the Act – Held that:- The decision in Apollo Tyres Ltd. vs. CIT [2002 (5) TMI 5 - SUPREME Court] followed – the AO has limited powers of making increases and reductions as provided for in the Explanation to the said section - the AO does not have the jurisdiction to go beyond the net profits shown in the P&L a/c, except to the extent provided in the Explanation to s.115J of the IT Act – Decided against Revenue. Deduction in computation of profit u/s 115JB of the Act - Tax on profit distributed as dividend u/s 115O of the Act – Held that:- The decision in Asstt. CIT vs Balarampur Chini Mills Ltd [2007 (3) TMI 295 - ITAT CALCUTTA-A] followed - tax on profit distributed as dividend u/s. 115-O is allowable as deduction in computation of book profits for the purpose of section 115JB of the Act – thus, tax on profit distributed as dividend u/s. 115-O is required to be reduced while computing the book profits u/s. 115JB of IT Act – there was no infirmity in the finding of the CIT(A) on the issue.
|