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2014 (1) TMI 1759 - AT - Income TaxAllowance of 10% of advertisement expenditure on permanent pavilion site as revenue expenses and directing to spread the same over a period of 10 years equally - Held that:- No basis on which the Ld. CIT(A) could have held that the benefit of payment in question will be available for 10 years only and consequential deduction is to be allowed over a period of 10 years. It is observed that the benefit was not for any fixed period. We agree with the Ld. CIT(A) that the expenditure in question is revenue in nature and no capital asset of enduring nature was acquired by the assessee by making the payment in question and therefore, the entire payment is allowable as deduction to the assessee in the year on incurring of the expenditure. We, therefore, modify the order of the Ld. CIT(A) and direct the Assessing Officer to allow deduction for entire ₹ 7,00,000/- during the year under consideration. Thus, relevant ground of appeal of the Revenue is dismissed and relevant ground of cross-objection of the assessee is allowed. Allowance of 10% of the receipts from export incentives as deduction from indirect cost while computing deduction u/s 80HHC on trading exports - Held that:- In the instant case, the assessee is engaged in export of trading goods and therefore, is eligible for deduction u/s 80HHC in respect of profit derived from export of trading goods. The assessee claimed deduction u/s 80HHC at ₹ 13,33,39,275/- whereas the Assessing Officer allowed such deduction on ₹ 13,15,00,727/-. Thus, the Assessing Officer granted lesser deduction of ₹ 18,78,548/- u/s 80HHC than the amount claimed by the assessee. The above difference arose because the assessee reduced its indirect cost relatable to the export of trading goods by 10% of export incentives of ₹ 1,87,85,483/- which was not accepted by the Assessing Officer. On appeal, the Ld. CIT(A) allowed the claim of the assessee by following CBDT circular no. 621 dated 19.12.1991. We find that the issue is squarely covered by decision of the Hon’ble Supreme Court in the case of Hero Exports Vs. CIT (2007 (11) TMI 13 - Supreme Court of India ) in favour of the assessee wherein held that for the purpose of determining export profit u/s 80HHC(3)(b) in case of trader exporter indirect cost can be reduced by 10% of export incentives etc. Therefore, we do not find any error in the order of Ld. CIT(A) Deduction u/s 80HHC in respect of income of marine division - Held that:- In the instant case, there is loss in export of trading goods which could not be passed on to supporting manufacturer by issuing disclaimer certificate in view of the decision of the Hon’ble Supreme Court in the case of IPCA Laboratory (2004 (3) TMI 9 - SUPREME Court ). In view of the above after taking into consideration 90% of export incentive, there was a positive profit of ₹ 20,24,198/- in the instant case. Therefore, the assessee was entitled for deduction u/s 80HHC in respect of ₹ 20,24,198/- only. We, therefore, modify the order of the Ld. CIT(A) to the above extent. Deduction u/s 80HHC resulting in computation of income lower than shown by the assessee in revised return of income - Held that:- We are of the considered view that the income of the assessee is to be computed as per provisions of the law and simply because an assessee has suffered more amount on tax than what is legally due, then the Department can not assess the income at a higher figure but should assess the income at correct amount as per the provisions of law. We, therefore, do not find any merit in this ground of appeal of the Revenue and hence, the same is dismissed. Disallowance of registration fee and stamp charges for increasing the authorized share capital of the company - Held that:- In view of the decision of the Hon’ble Supreme Court in the case of Punjab State Industrial Development Corporation Limited Vs. CIT (1996 (12) TMI 6 - SUPREME Court ) wherein it was held that amount paid to the registrar of companies as filing fee for enhancement of capital is capital in nature. Advertisement expenses are revenue in nature and allowable during the year under consideration in entirety,
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