Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 406 - ITAT DELHIAddition u/s 41(1) for write back of provision and sundry balances - made by earlier by National Delhi Development Board(NDDB) was exempt from income tax - HELD THAT:- Referring to Section 41 (1) the amount is added to the income of the assessee only when an allowance or deduction has been made in the assessment for any year. As mentioned elsewhere the income of NDDB was not liable to tax as income tax Act was not applicable to NDDB. In our considered opinion when no allowance or deduction has been allowed to the predecessor there is no question of adding the same when the amounts are written back by the assessee. Addition of income tax borne on interest on supply credit from foreign suppliers - allowable business expenses - HELD THAT:- There is no dispute that the assessee has paid tax on behalf of its foreign suppliers being an income tax liability. By any stretch of imagination the same cannot be allowed as expenditure u/s. 37. The reliance was placed on the decision of DASHMESH TRANSPORT COMPANY PVT. LIMITED VERSUS CIT [1973 (10) TMI 1 - PUNJAB AND HARYANA HIGH COURT] is misplaced in as much as in that case the assessee company took over the assets and liabilities of another company and while discharging the liabilities of that company certain expenditure were incurred which were claimed as legitimate business expenditure.Facts of the case in hand are totally different, therefore, the addition of ₹ 114834/- is sustained. Disallowance u/s.14A - HELD THAT:- There is no dispute that during the year the assessee has earned an exempt income on account of interest on tax free bonds. It is also not in dispute that all the investments are coming from NDDB. The only expenditure which has been incurred by the assessee is towards the board meeting fees. In our considered opinion 100% of such board meeting fee expense need to be disallowed. We accordingly direct the AO to disallow the entire expenditure incurred on board meeting fees towards earning of exempt income. In addition further disallowances of ₹ 1,00,000/- towards the administrative expenses should meet the ends of justice. We direct accordingly. Nature of expenditure - purchase of software - revenue or capital expenditure - HELD THAT:- Looking to the nature of software we are of the considered opinion that these are routine software which need up gradation year after year and, therefore, it can be safely concluded that no enduring benefit is derived by the assessee. The Hon’ble High Court of Delhi in the case of Amway India [2011 (11) TMI 4 - DELHI HIGH COURT] has held that the issue with regard to the expenditure on software application was to be held in favour of the assessee. Disallowance of expenditure on account of shifting of machines - capital or revenue expenditure - HELD THAT:- There is no dispute that plant and machinery at OPS Chalthan were shifted to OPS Palanpur. These plant and machineries had to be dismantled and transported and again installed at Palanpur. In our considered opinion such expenditure do not given enduring benefit to the assessee on the contrary such expenditure are incurred to facilitate the business of the assessee and have to be allowed as revenue expenditure. We accordingly direct the AO to delete the disallowance and withdraw the depreciation allowed. Ground No.6 is allowed. Addition on account of lease rent - HELD THAT:- A perusal of the assessment order show that the AO himself has followed the assessment order for A. Y.2002-03 and since in that year the Tribunal has deleted the additions. We do not find any reason to interfere with the finding of the CIT(A). Ground No.2 is dismissed. Club membership fee on behalf of its employees of BOHO Club, Anand - HELD THAT:- We find that the AO is disallowed the expenditure on the ground that such expenditure is not connected at all and nothing to do with the business of assessee company. In our considered view such observations of the AO do not have any force. The expenditure has been incurred as several employees of the assessee who are members of the BOHO Club which has been established for the re-creation and welfare of the employees. In our considered view such expenditure is eligible for deduction u/s. 37(1). For this proposition of law we draw support the decision of the Hon’ble High Court of Gujarat in the case of Gujarat State Export Corporation [1993 (9) TMI 52 - GUJARAT HIGH COURT] . We decline to interfere with the findings of the CIT(A). Disallowing research and development expenses - HELD THAT:- As decided in own case according to the Revenue the actual research expenses have been incurred by the Mother Dairy Fruits and Vegetables Ltd. whose subsidiary is the present Assessee. The Assessee apparently reimbursed the expenses incurred on scientific research for Mother Dairy Fruits and Vegetables Ltd. The Assessee has been assessed in Gujarat prior to the AY in question and for an earlier AY 2002- 03 where again in reassessment proceedings such expenses were sought to be disallowed, the High Court of Gujarat decided the issue in favour of the Assessee by its order [2012 (7) TMI 593 - GUJARAT HIGH COURT]
|