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2014 (4) TMI 348 - AT - Income TaxRectification of mistake u/s 254 of the Act – Typographical error - Disallowance of expenses u/s 37(2) of the Act – Held that:- A typographical error has occurred which needs to be rectified – the AO is directed - to allow the business meeting expenses and expenses on AGM which expenses cannot come under the category of entertainment expenses - We direct the AO to add only Rs. 2,00,000/- out of total canteen expenses and lunch expenses on employees during the course of outdoor duty – Decided partly in favour of Assessee. Allowance of proportionate amount - Premium paid on non-convertible debentures – Held that:- As decided in assessee’s own case for the previous year, it has been held that the decision in Madras Industrial Investment Corporation Limited Versus Commissioner of Income-Tax [1997 (4) TMI 5 - SUPREME Court] followed - the Tribunal allowed proportionate claim of the premium payable on the debentures to be spread over to the period of debenture -the AO is directed to allow proportionate claim of the premium payable – Decided in favour of Assessee. Disallowance of depreciation on WDV – Foreign visitor’s expenses disallowed as capital expenses – Held that:- As decided in assessee’s own case for the previous year, it has been held that the expenditure incurred on foreign visitors form part of the cost of the project therefore would be eligible for depreciation as per Sec. 32 of the Act – thus, the AO is directed to allow the claim of depreciation – Decided in favour of Assessee. Disallowance of VRS expenses – Held that:- :- As decided in assessee’s own case for the previous year, it has been held that the liability is well supported by the actuary valuation and the agreements between the company and the employees were not examined by the AO - The Tribunal’s direction relates to the verification of the liability of VRS, being supported by actuary valuation certificate, viz-a-viz agreements with the company and the employees – Decided partly in favour of Assessee. Disallowance of provision of expenses at year end – Held that:- There is no error in the finding of the Tribunal which needs rectification - In so far as an excess provision is concerned, the assessee has rightly reversed the excesses in subsequent years under respective head of expenditure - In so far as shortfall in provisions is concerned, considering the method of accounting which is mercantile, it is the duty of the assessee to make proper provisions and if the assessee has fallen short on certain heads of expenditures the same cannot be allowed – Decided against Assessee. Depreciation in respect of Kantla plant – Held that:- There is an apparent mistake in the directions of the Tribuna - The AO is directed to verify whether the plant was actually in use in earlier years and if satisfied, the depreciation will be allowed – Decided in favour of Assessee.
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