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2012 (8) TMI 952 - AT - Income TaxClaim of expenditure incurred on renovation of showrooms - nature of expenditure - revenue or capital - Held that:- We are of the view that they have to be considered as the capital assets of the assessee-company. Accordingly, we set aside the order of the learned Commissioner of Income-tax (Appeals) on this issue and restore the disallowance made by the Assessing Officer. Disallowance of interest and processing charges on availing loan from International Finance Corporation, Washington for the purpose of setting up of a new industrial undertaking for manufacture of truck tyres - Claim allowed in favour of assessee Disallowance of payment to clubs by treating the same as non-business expenditure - Held that:- The expenditure incurred towards entrance fee/subscription can be termed as business expenditure. With regard to the cost of services, it is the responsibility of the assessee to show the commercial expediency in incurring the same. In the absence of the same, the Assessing Officer was justified in disallowing the sum of ₹ 1,48,212 referred supra. Accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) on this issue and restore the addition made by the Assessing Officer. Claim of deferred sales tax payment - Held that:- The facts surrounding this claim were not clearly brought out on record. In any case, the claim for deduction made by the assessee would depend upon the outcome of the decision taken in the earlier years. Accordingly, this aspect requires verification. If the claim of deemed payment had been disallowed in the earlier years, then the assessee is entitled for deduction of the amount referred supra. Accordingly, we restore this issue to the file of the Assessing Officer with the direction to examine the claim of the assessee afresh Claim of deduction of Bonus - Held that:- Simply because the assessee has not claimed a particular deduction, it cannot be said to be a colourable device as envisaged by the decision of McDowell's case [1985 (4) TMI 64 - SUPREME Court ]. The deduction relates to payment of bonus which has actually been paid in the present year and deduction has been claimed as per section 43B. Such deduction has been claimed on consistent basis in the year of payment and, therefore, no adverse inference should have been taken. Disallowance of depreciation and repair charges confirmed Reduction of proportionate head office expenses from the profit of DG power generation unit for the purpose of computation of deduction under section 80-IA - Held that:- An ad hoc reduction of ₹ 12 lakhs towards head office expenses and also the interest expenditure attributable to the DG power generation unit would meet the ends of justice. Accordingly, we set aside the issue of determination of interest expenditure to the file of the Assessing Officer. The order of the learned Commissioner of Income-tax (Appeals) stands modified accordingly Claim of "debts and advances written off" - Held that:- The advances given for the purposes of acquisition of capital assets or towards revenue purposes cannot be claimed as "bad debt" under section 36(1)(vii) of the Act. Accordingly, in our view, the Assessing Officer was not correct in drawing support from the said section. With regard to the advance given for acquisition of revenue items amounting to ₹ 2,32,93,575, the assessee gets support from the decision of the hon'ble Delhi High Court in the case of Mohan Meakin Ltd. v. CIT [2011 (5) TMI 243 - DELHI HIGH COURT ] wherein the High Court, by following the decisions held that the trade advances written off can be allowed as deduction under section 37 of the Act. Assessee-company is entitled to deduction under section 80-IA of the Act in respect of the new DG power generation units.
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