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2015 (5) TMI 306 - AT - Income TaxDisallowance of interest on application money for tax free bonds - Held that:- As decided in assessee own case in respect of the immediate preceding year [2014 (6) TMI 146 - ITAT MUMBAI] wherein following the case of CIT vs. Bharat Heavy Electricals Ltd.[2012 (9) TMI 515 - DELHI HIGH COURT] held interest for the brief period between the date of application and allotment of bonds could not be taxed – Revenue could not bring any contrary fact or case law – Decided in favour of Assessee. Deduction u/s. 32AB - amount deposited by the assessee in Industrial Development Bank of India (IDBI) - this amount was disallowed by the AO on the ground that all receipts were deposited in the cash credit account with the bank from which overdraft was taken by the assessee from time to time for the purpose of business - CIT(A) allowed claim - Held that:- The assessee is having cash profit of ₹ 51.65 crores and only for the reason that deposit of IDBI is made from cash credit account, which was showing overdraft is not sufficient to disallow the allowability of deduction u/s. 32AB, particularly in view of the fact that the assessee is having cash profit of ₹ 51.65 crores, which is not contradicted by the revenue. So far as it relates to allowability or otherwise of deduction u/s. 32AB on the income of earlier years, town income and rental income from employees, learned CIT(A) has allowed the claim of the assessee for the reason that these form part of the business income. It is observed from the order passed by the learned CIT(A) that he has not given reasons for the same. Similarly, according to the assessee the dividend and interest income also could not be excluded as per the decisions relied upon by the learned AR. While deciding this issue also the learned CIT(A) has not considered any of the judicial pronouncements. Therefore, keeping in view the interest of justice, we are of the opinion that the issue requires to be restored back to the file of the CIT(A) with a direction to readjudicate the same in the light of the decisions relied upon by the AR after bringing all the facts on record. - Decided in favour of revenue for statistical purposes. Disallowance of convertible bonds/debentures - Held that:- Decided in favour of the assessee in assessee’s own case for A.Y. 1992-93. Disallowance of Bhanwad Prospecting and survey expenses - Held that:- Tribunal in the assessee’s own case for A.Y. 1987-88 [2014 (6) TMI 146 - ITAT MUMBAI] while dealing with the issue in question in para 14 of the said decision has observed that since the assessee had been allowed deduction under section 35(E) of the Income Tax Act (hereinafter referred to as the Act), hence the grievance of the assessee became otiose and the Tribunal therefore dismissed the ground of appeal relating to this issue. Disallowance of foreign exchange fluctuation loss as expenditure - Held that:- The Tribunal in the assessee’s own case for A.Y. 1987-88 [2014 (6) TMI 146 - ITAT MUMBAI] has given its finding and has followed the decision of the Tribunal in assessee's own case for A.Y. 1984-85 and directed the AO to allow the investment allowance on exchange loss treated as capital expenditure. Facts being identical, respectfully following the decision of the Tribunal (supra), we accordingly direct the AO to allow the investment exchange loss treated as capital expenditure .Thus this issue is restored to the AO to decide the same in view of the above observations of the Tribunal for this year also. Disallowance being addition of interest on account of interest free advances to Senegal Investment & Trading Co. Ltd. - Held that:- The Tribunal in the assessee’s own case for A.Y. 1987-88 [2014 (6) TMI 146 - ITAT MUMBAI] the Tribunal, while dealing with the issue, has allowed this ground following the decision of the Jurisdictional High Court in the case of ‘Reliance Utilities’ [2009 (1) TMI 4 - HIGH COURT BOMBAY ]. The facts for this year being identical in nature, the AO is directed to decide this issue in the light of the earlier year’s decisions in the own case of the assessee Disallowance of foreign travel expenses - Held that:- Restore this issue to the file of the AO with a direction to verify the contentions of the assessee. If the foreign travel expenses are incurred in respect of already existing business, the same should be allowed. For the rest of the disallowance amounting to ₹ 3,16,976 the order of the CIT(A) is upheld as the same is not being pressed. - Decided partly in favour of assessee. Family planning expenses - Held that:- Disallowance of similar expense in the assessee’s own case for A Y 1987-88 was restricted to 50%. Thus we direct the AO to restrict the disallowance to 50% of the expenditure incurred. Disallowance of expenses on fist and prawn culture - Held that:- Tribunal in assessee's own case for A.Y. 1985-86 followed the decision of the Tribunal in assesee’s own cae for A.Yrs. 1981-82 and allowed the claim. - Decided in favour of assessee. Disallowance under section 43B - royalty of limestone - Held that:- Royalty on limestone is restored to the file of the AO for verification of the payments as per the provisions of Sec. 43B and if it is found correct, then AO is directed to allow the deduction - Decided in favour of assessee for statistical purposes. Disallowance of expense incurred on new projects - This is for survey and market study of LAB a chemical agent used to be mixed with soda ash for making detergent powder/washing powder - assessee contented for balance amount of ₹ 24,000 which is incurred in respect of existing business - Held that:- Restore the issue to the file of the AO with a direction to verify the contention of the assessee that it was incurred for the existing business. On verification, if it is found that these expenses are incurred for existing business then the same should be allowed. - Decided partly in favour of assessee for statistical purposes.
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