Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 385 - AT - Income TaxAdjustment u/s 145A - impact on the taxable profit while including excise duty, MODVAT credit and sales tax in the valuation of stock, purchases and sales as per the provisions of section 145A - Held that:- As the provisions of section 145A have been inserted w.e.f. 01.04.1999 that section 145A is applicable for and from AY 1999-2000. As held in Cartini India Ltd. v. ACIT (2007 (2) TMI 192 - BOMBAY High Court), as per the new provisions of section 145A, the unutilized Modvat Credit had to be included in the closing stock of raw material and Work-In-Progress, whereas the excise duty paid on unsold finished goods had to be included in the inventory of finished goods. We direct the AO to allow the above claim of the assessee as per the above decisions after examining that adjustment should be made in such a manner that no double deduction is claimed for the same expenditure. Thus the 1st ground of appeal is allowed. Disallowance being the commission paid - Held that:- Without knowing the exact nature of the services rendered by those parties, it is not possible for us to decide the commission payable by the assesses company was legitimate expenditure permitted by law, and therefore, to be allowed. If such details are not coming such payments made in respect of contracts awarded by Public Sector Companies we have to be held as expenses were incurred against public policy, and therefore, not entitled to be deducted in the light of the proviso to Section 37 - Decided against assessee Rejection of claim for deduction of provision made in the books of account towards liability on account of arrears wages payable to workmen under the wage settlement agreement - Held that:- The assessee file a chart submitting that the said deduction has been allowed in subsequent year. Therefore, there is merit in the order of the AO disallowing which has been subsequently confirmed by the Ld. CIT(A). Upholding the said order, we dismiss the 3rd ground of appeal. Disallowance of provision made to meet expenditure in connection with Y2K compliance - Held that:- In the instant case, the assessee has made a provision of ₹ 2,00,00,000/- in connection with Y2K compliance which would arise not in the financial year 1998-99 but in the financial year 1999-00. Thus following the ratio laid down in Indian Molasses Co. (Pr.) Ltd. (1959 (5) TMI 5 - SUPREME Court), we uphold the disallowance made by the AO. Thus the 6th ground of appeal is dismissed. Expenditure incurred by the assessee on computer software is revenue in nature. Addition u/s 14A - Held that:- Since the total own funds in the instant case is more than investment in tax-free bonds and shares and mutual funds, thus addition to be deleted.
|