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2015 (11) TMI 747 - ITAT COCHINDisallowance of part of interest expenditure on the ground that the assessee has diverted interest bearing funds to its subsidiary companies - Held that:- As the sources of funds that were given to each of the subsidiary companies during the relevant years under consideration requires to be examined in order to find out about the diversion of interest bearing funds. Hence, in our view, this issue requires fresh examination at the end by the Assessing Officer Disallowance of licence fee paid - Held that:- This issue is covered by the decision of the co- ordinate Benches rendered in the assessee's own case in the earlier years [2012 (9) TMI 510 - ITAT, COCHIN] wherein the co-ordinate Bench of the Tribunal has examined this payment and has taken the view that this expenditure is allowable and it was so held by the Tribunal in more than one year. Hence, we are inclined to follow the view consistently taken by the Tribunal. - Decided in favour of assessee. Disallowance of employees' provident fund, labour welfare fund and employees' State insurance on account of delayed remittance, i.e., beyond the date prescribed in the respective enactments - Held that:- Assessing Officer has not given the details of date of payment of the employees' provident fund/employees' State Insurance, etc., in the assessment order. The learned Commissioner of Income-tax (Appeals) has also not examined the same.Since the details of dates of payment are not available on record, we are of the view that this issue requires fresh examination in all the years. If the payments have been made before the due date prescribed under section 139(1) of the Act for filing return of income, no disallowance is required to be made. Otherwise, the disallowance should be made in respect of the amounts paid after the due date prescribed under section 139(1) of the Act. Accordingly, we set aside the order of the learned Commissioner of Income-tax (Appeals) on this issue in all the years referred to above and direct the Assessing Officer to examine the same Addition of the amount realised on sale of old and unyielding rubber trees - applicability of rule 7A of the Income-tax Rules - CIT(A) deleted the addition - Held that:- Commissioner of Income-tax (Appeals) has taken the view with regard to the application of rule 7A, which is identical with the view expressed by us in the earlier paragraph, i.e., it applies only to a person who carries on the combined activity of growing rubber trees and also manufacturing or processing of field latex or coagulum obtained from rubber plants. The dominant purpose of growing rubber trees is to obtain liquid latex from them. The rubber trees are not used as it is for the purpose of manufacturing or processing, but only the latex obtained from them. Hence, the sale value of old rubber trees cannot be considered as salvage value obtained from the exhausted stock. Since the rubber trees continue to be the capital asset. Accordingly, the examples of sale of old gunny bags or old bottles quoted by the Assessing Officer are not applicable to the case of rubber trees. Hence, the decision of the Supreme Court in the case of Kalpetta Estates Ltd. v. CIT [1996 (7) TMI 4 - SUPREME Court] in holding that the rubber trees constitute capital assets shall hold good even after the introduction of rule 7A in the Income-tax Rules. In view of the above, we agree with the views expressed by learned Commissioner of Income-tax (Appeals) on this issue. Assessment of sale of Grevillea trees under the head "capital gains tax" - Held that:- This issue has also been decided in favour of the assessee by the learned Commissioner of Income-tax (Appeals) by following the decision rendered by the Tribunal in the assessee's own case in the assessment year 2006-07 as noticed that the Assessing Officer was taking consistent stand in the earlier years that no capital gain or capital loss can be computed on sale of Grevelia trees, as the cost of acquisition could not be ascertained in a reason able manner. Provision of gratuity cannot be added for computing book profit under section 115JA/JB of the Act. Provision for doubtful debts/advances - Held that:- As Commissioner of Income-tax (Appeals) has deleted this disallowance without discussing anything about the same we restore this issue to the file of the Commissioner of Income-tax (Appeals) with the direction to examine the issue afresh in accordance with law and after affording reasonable opportunity of being heard to the assessee.
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