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2021 (6) TMI 66 - AT - Income TaxTDS u/s 194H - Disallowance u/s 40(a)(ia) on account of non-deduction of TDS on ‘Bank Guarantee Expenses’ - HELD THAT:- Assessee has paid guarantee commission charges of state bank of India for giving guarantee in favour of the seller of coal to the assessee. It is one of the banking services provided by the state bank of India to the assessee. It cannot be said to be a “commission” as intended to u/s 194H of the but it is in the nature of Bank charges charged by the bank for provision of services to the assessee. Honourable Bombay High Court in case of CIT – TDS (1), Bombay versus Larsen and Toubro Ltd [2018 (12) TMI 991 - BOMBAY HIGH COURT] wherein the honourable High Court while dealing with the case for assessment year 2010 – 11 and also the Notification No 56/2012 of CBDT which has been considered by several coordinate benches and held that same also applies to earlier period then the date of issue of notification, we hold that the assessee was not required to withheld any tax on bank guarantee charges paid to state bank of India and therefore no disallowance would have been made u/s 40 a (ia) of the act. So we confirm the order of the ld CIT (A) . In view of this ground number (1) of the appeal is dismissed. Disallowance of additional depreciation u/s 32 (1) (iia) - assessee has claimed the additional depreciation on the plant and machinery purchased for the power generation plant - HELD THAT:- AO was of the view that the benefit is available only to those undertaking which are engaged in the business of manufacture or production of any article of thing. Generation of power according to him cannot be equated with the production of any article or thing. Further clause ii(a) , subsection (1) of Section 32 of the act was amended with effect from 1 April 2013 and therefore such additional depreciation could be allowed only with effect from 1 April 2013, thus the same was disallowed. Assessee challenged the same before the learned CIT – A who allowed the claim of the assessee relying on the decision of the coordinate bench in case of NTPC versus Deputy Commissioner Of Income Tax [2012 (5) TMI 127 - ITAT DELHI] where the coordinate bench after considering the several decisions including the decision of the honourable Supreme Court in case of impunity board wherein it was held that the electricity is a goods allowed the claim of the assessee - Therefore respectfully following the decision of the coordinate bench in assessee‟s own case we do not find any infirmity in the order of the learned CIT – A in deleting the disallowance of additional depreciation. Disallowance on account of excess depreciation claimed on electrical installations by holding that “electrical fittings‟ which are part of the block of “furniture and fittings‟ as per the appendix I of The Income Tax Rules, 1962 as “plant” by ignoring amended subsection (3) of Section 43 - HELD THAT:- We do not find that any such information exists on record that these electrical installations are for the purpose of operation of plant and machinery and to make the plant and machinery functional. The mere assertion by the learned CIT – A they are plant and machinery without examining the proper details, the assessee cannot be granted depreciation at the rate of 15% classifying them as plant and machinery. According to us it is apparent that furniture and fittings includes electrical fittings only to the extent of wires, sockets, switches and other fittings and fan etc. We also cannot say in absence of any detail whether the electrical installation falls in this category or not. We set-aside this ground to the file of the learned assessing officer with a direction to the assessee to produce the details of addition of plant and machinery and to show that these are not electrical fittings as classified in note number 5 of appendix I (depreciation schedule). In view of this we set aside the ground number 3 of the appeal of the learned assessing officer back to the file of the learned assessing officer with a direction that after examining the details of the electrical installation and giving a proper opportunity of hearing to the assessee, the issue may be decided whether the electrical installations are furniture and fittings or plant and machinery. Thus, Ground no 3 is allowed with above directions. Disallowance on account of excess deduction claimed u/s 80 IA (8) - what is the market value in relation to goods or services for the purpose of working out eligible profit for deduction u/s 80 IA? - HELD THAT:- The explanation to Section 8 provides that “market value‟ mean the price that such goods or services would ordinarily fetch in the open market. Naturally, the taxes and duties are not at all fetched by such goods or services but are the levies of the government on transfer of such goods. The price of such goods can never include the government levy. This is the argument of the learned departmental representative. However when an issue has been decided by higher forum, we are duty-bound to follow the same, as judicial discipline demands, more particularly when in assessee‟s own case on identical facts and circumstances the issue was decided. It is apparent that this issue was raised by the learned assessing officer in assessment year 2009 – 10 and the coordinate bench after discussing this issue at length has taken a view in favour of the assessee.Therefore respectfully following the decision of the honourable Delhi High Court in assessee own case for assessment year 2009 – 10, we confirm the order of the ld CIT (A) and ground number 4 the appeal of the learned AO is dismissed. Disallowance of depreciation while calculating the profit 115JB - HELD THAT:- AO has not discussed this issue at all in the assessment order and merely added back same while computing the book profit in the assessment order. As the issue is squarely covered in favour of the assessee by the order of the coordinate benches in assessee‟s own case for the earlier year we do not find any reason to deviate from the same where such addition has been deleted following the decision of the honourable Supreme Court in case of Apollo tyres Ltd [2002 (5) TMI 5 - SUPREME COURT]. Thus we confirm order of the ld CIT (A) on this score. In view of this ground number 5 of the appeal of the learned assessing officer is dismissed.
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