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 691 - ITAT MUMBAINon granting depreciation and expenses on insurance pertaining to the Kavesar unit - Held that:- As decided in assessee's own case for AY 2003-04 disallowance sustained by the Ld. CIT(Appeals) on account of depreciation and other expenses of Kavesar Factory was deleted by the Tribunal accepting the alternative contention of the assessee that the expenses incurred to protect the business assets should be allowed as deduction as held by Hon’ble Bombay High Court in the case of Hindustan Chemical Works Ltd.[1979 (2) TMI 16 - BOMBAY High Court] - also held by the Tribunal that the assets of Kavesar Unit having already entered the block of assets of the assessee, depreciation thereon could not be disallowed on the ground of non-user as the use of block of assets was to be considered and not the use of individual assets. - Decided in favour of assessee Disallowing the expenditure on purchase of application software - revenue or capital expenditure - Held that:- the expenditure incurred by the assessee towards the purchase of application software is revenue in nature. See Amway India Enterprises case [2011 (11) TMI 4 - DELHI HIGH COURT]. Non grating deduction claimed u/s 35D - Held that:- As decided in assessee's own case for AY 2003-04 direct the AO to allow the deduction claimed by the assessee under section 35D for the year under consideration keeping in view the expenses eligible for such deduction as quantified by him in assessment year 1999-2000. Disallowance u/s 14A - allocating other expenditure and depreciation on H.O. assets to the exempt income - Held that:- we direct the AO to restrict the disallowance u/s 14A to 2% of the total exempt income of the assessee, in place of the disallowance made by the AO and the enhancement done by the Ld. CIT(A). - Decided partly in favour of assessee Additions for unutilised Modvat Credit to the closing stock - Held that:- There is no dispute that the purchases made by the assessee are accounted for net of MODVAT credit. In M/s Diamond Dye Chem Ltd. [2017 (7) TMI 616 - BOMBAY HIGH COURT] held the income was not generated to the extent of Modvat credit or unconsumed raw-material. Merely because the Modvat credit was irreversible credit offered to manufacturers upon purchase of duty paid raw-materials, that would not amount to income which was liable to be taxed under the Act. It is also held that whichever method of accounting is adopted, the net result would be the same. - Decided in favour of assessee Disallowing lease rentals not debited to Profit & Loss Account - Held that:- We have heard the rival submissions and perused the relevant materials on record. It is found that the assessee is not the owner of the leased cars. It has not claimed depreciation u/s 32 in respect of the said cars. In the facts of the case, there is merit in the contentions of the Ld. counsel that the principal amount of lease rentals be allowed as a deduction u/s 37(1) of the Act.- Decided in favour of assessee Disallowing professional fees by treating it as capital expenditure - Held that:- We find that the aforesaid expenses do not create any new fixed asset or enhance the production capacity of the business. These expenses are for repairs and renovation of existing assets, hence should be allowed as deduction. Disallowance to be deleted - Decided in favour of assessee Computing deduction u/s 80HHC - AO held that for computing the deduction u/s 80HHC, the total turnover should include sales tax, excise duty and sale of raw materials - Held that:- For the purposes of working out the formula and in order to avoid distortion of arriving export profits clause (baa) stood inserted to say that although incentive profits and "independent incomes" constituted part of gross total income, they had to be excluded from gross total income because such receipts had no nexus with the export turnover. Therefore, in the above formula, we have to read all the four variables. On reading all the variables it becomes clear that every receipt may not constitute sale proceeds from exports. That, every receipt is not income under the Income-tax Act and every income may not be attributable to exports. This was the reason for this Court to hold that indirect taxes like excise duty which are recovered by the taxpayers for and on behalf of the Government, shall not be included in the total turnover in the above formula - See CIT v. Ravindranathan Nair [2007 (11) TMI 10 - Supreme Court of India] Disallowance on account of bad debts - Held that:- As decided in TRF Ltd [2010 (2) TMI 211 - SUPREME COURT ] after 01.04.1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. However, in the present case, the Assessing Officer has not examined whether the debt has, in fact, been written off in accounts of the assessee. When bad debt occurs, the bad debts account is debited and the customer’s account is credited, thus, closing the account of the customer. In the case of companies, the provision is deducted from sundry debtors. - Disallowance to be deleted - Decided in favour of assessee
|