2015 (11) TMI 1630 - HC - Income Tax

Ad-hoc addition in respect of value of un-disposed scrap items as on the last date of the relevant previous year Disallwance of provision made at the end of the relevant year on the basis of management s best estimate Disallowance of deduction claimed under section 80IA in respect of profit derived from captive power generating unit Disallowance of additional depreciation claimed under section 32(iia) of the Act on computers installed at supervisory offices located in the compound of manufacturing plants located at Gurgaon and Dharuhera First insurance premium paid at the time of purchase of car constituted capital expenditure Disallowance of expenditure incurred towards maintenance of existing agricultural land held by the Appellant for purpose of putting up factory Disallowance of rental charges paid towards cars taken on lease under section 40(a)(ia) on the ground that the appellant failed to deduct tax at source therefrom under section 194-I TDS under section 194C of the Act from reimbursement of certain portion of advertisement expenses incurred by the dealers on their own account TDS u/s 194B - disallowance of expenditure incurred towards distribution of motor vehicles to winners of game shows organized by TV channels under section 40(a)(ia) TDS u/s 194I - Non tds on hire charges paid towards room provided to touring professionals from abroad TDS u/s 194C - exp on booking of banquet halls/space in hotels for convening meetings covering charges paid for snacks/refreshment under section 40(a)(ia) TDS u/s 194C - stitching charges paid at the time of purchase of uniforms for employees on the ground that the contract with the vendor was in the nature of a contract for carrying out work / stitching warranting deduction of tax at source Liability to deduct tax at source from the provision made for liabilities accrued at the end of the year Eligible for deduction under Section 35(1)(iv) - Assets used for the purposes of testing was scientific research TDS u/s 194C - purchase of flowers under Section 40(a)(ia) on the ground that the said payment was made for flower arrangement to be subjected to TDS Disallowance in respect of payments made without tax deduction at source prior to the date of issue of certificate under Section 197 of the Act on the ground that such certificate had no retrospective application Held that - Learned counsel for the parties are permitted to file additional documents/papers which are part of the assessment record or were filed before the ITAT within eight weeks.

Issues involved:
1. Ad-hoc addition of value of un-disposed scrap items
2. Disallowance of provision made for increase in material price
3. Disallowance of deduction claimed under section 80IA for profit from captive power unit
4. Disallowance of additional depreciation claimed on computers
5. Treatment of first insurance premium paid for car as capital expenditure
6. Disallowance of expenditure on maintenance of agricultural land
7. Disallowance of rental charges paid for cars taken on lease
8. Liability to deduct tax at source from advertisement expenses reimbursement
9. Disallowance of expenditure on distribution of motor vehicles for game show winners
10. Disallowance of expenditure on booking banquet halls for meetings
11. Disallowance of hire charges for room provided to touring professionals
12. Disallowance of stitching charges paid for purchase of uniforms
13. Liability to deduct tax at source from provision made for liabilities
14. Disallowance of provision for advertisement expenses for failure to deduct tax at source
15. Eligibility of assets used for testing for deduction under Section 35(1)(iv)
16. Disallowance of expenditure on purchase of flowers
17. Disallowance of payments made without tax deduction prior to issuance of certificate under Section 197

1. Ad-hoc addition of value of un-disposed scrap items:
The Tribunal was questioned for upholding the ad-hoc addition in respect of the value of un-disposed scrap items. The issue revolved around whether the Tribunal erred in law in making this addition.

2. Disallowance of provision made for increase in material price:
The Tribunal's decision to disallow a portion of the provision made for the increase in material price was challenged. The key contention was whether the provision pertained to the relevant assessment year and if the disallowance was justified.

3. Disallowance of deduction claimed under section 80IA:
The issue concerned the disallowance of a deduction claimed under section 80IA for profit derived from a captive power generating unit. The dispute was whether the profit calculation method was correctly determined by the Tribunal.

4. Disallowance of additional depreciation claimed on computers:
The Tribunal upheld the disallowance of additional depreciation claimed on computers installed at supervisory offices. The question was whether the Appellant adequately proved the installation location of the computers.

5. Treatment of first insurance premium as capital expenditure:
The Tribunal's decision to treat the first insurance premium paid for a car as capital expenditure was challenged. The crux was whether this treatment was appropriate under the circumstances.

6. Disallowance of expenditure on maintenance of agricultural land:
The Tribunal upheld the disallowance of expenditure incurred for maintaining agricultural land intended for a factory. The issue was whether this expenditure was rightfully disallowed.

7. Disallowance of rental charges paid for cars taken on lease:
The Tribunal disallowed rental charges paid for leased cars due to failure in deducting tax at source. The question was whether the disallowance was justified under section 40(a)(ia) of the Act.

(Continued in next message)

← Previous Next →