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2018 (11) TMI 285 - ITAT PUNEDisallowance u/s.14A r.w. Rule 8D(2) - non recording of satisfaction - Held that:- AO failed to record the sustainable satisfaction before invoking the provisions of section 14A of the Act. Therefore, the disallowance made by the AO is unsustainable technically. Accordingly, this part of the argument of Ground No.1 is allowed. Disallowance of foreign travel expenses of employees - allowable busniss expenses - Held that:- On the issue of capitalization of the expenditure, in view of the assessee’s submission that the expenses incurred for the purpose other than the purchase of machinery, needs to be verified by the AO, we find this issue needs to be remitted back to the file of AO for verification of correctness of the facts relating to this claim. AO is directed to verify the expenses in this regard after granting reasonable opportunity of being heard to the assessee. Assessee is directed to produce relevant documents to substantiate his claim. Classification of items of fixed assets - rate of depreciation - AO made addition being difference in depreciation @10% and 15% on some items under block of Plant and Machinery treating the same as Furniture - Held that:- We find this issue is settled one in favour of the assessee by virtue of the orders of Tribunal in the A.Yrs. 2006-07 to 2009-10. Considering the same and following the rule of consistency, we allow the ground No.3 raised by the assessee. Disallowance on account of Product Development expenses - Held that:- The assessment year specific approach is the decided issue legally and not the date specific approach. We find the facts are somewhat identical to the facts of the present case. Considering the above, we allow the Ground No.5 (a) and (b) needs to be remanded to the file of AO for fresh adjudication on the matters. Addition u/s.48 on account of demat charges which was claimed as expenditure incurred for earning income from capital gains to be deleted Addition made on account of rent paid for the property at Bungalow No.70, Koregaon Park and depreciation - Held that:- As decided in assessee's own case there is no clarity with reference to the capitalised items of assets credited to the Serum Institute of India Ltd. in the said house premises occupied by Mr. Z.S. Poonawalla, applicable rate of depreciation and the use of the asset etc. As discussed in the open court, we are of the opinion that this limb of the ground should be remanded to the file of AO for fresh adjudication after granting reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice. Allowability of depreciation @80% on the cost and Electrical and Civil Works - Held that:- Considering the binding precedents on this limited issue of allowing higher depreciation on the civil works linked to the foundation work of the windmill, we are of the opinion that the assessee is entitled to claim higher depreciation @80% on the civil structures of the windmill which is part and parcel of the windmill and which cannot be separated. Therefore, the order of CIT(A) holding that the higher depreciation is applicable in windmill and also expenses incurred on civil structure, is fair and reasonable and it does not call for any interference. Accordingly, the ground raised by the Revenue is dismissed. Disallowance of Selling and Distribution Expenses - allowable business expense - discounts on purchase of vaccines given to doctors - Held that:- The scope of the CBDT Circular cannot be extended to the pharmaceutical companies without having any enabling Notification or Circular for Medical Council of India. Consequently, the present assessee being a pharmaceutical company is outside the scope of the said circulars of MCI and the CBDT. Considering the above, we are of the opinion that the Ground No.10/Modified Ground No.10 raised by the assessee should be allowed in favour of the assessee. MAT - Allowability of deduction to the Wealth Tax paid by the assessee for the purpose of computing book profits u/s.115JB - AO denied the said payment of tax as not an allowable deduction - Held that:- The wealth tax paid by the assessee, being an ascertained liability is an allowable deduction for the purpose of section 115JA of the Act. Accordingly, Ground by the assessee is allowed.
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