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2016 (8) TMI 1350 - AT - Income TaxRevenue seeks to revive staff welfare expenditure disallowance - Held that:- As in assessment years 2000-01 and 2001-02 CIT(A) deletes the same by holding that the impugned disallowance is not supported by any cogent reason. The very factual position continues herein as well since the Revenue fails to produce any material on record buttressing the impugned 20% disallowance wherein the rest 80% already stand accepted. Nor does it make out a case that the impugned disallowance stands affirmed in the above stated preceding assessment years. Its first substantive ground fails accordingly. Foreign travel expenditure disallowance - Held that:- There does not appear to be any dispute that this tribunal in assessment year 2000- 01 has rejected similar Revenue’s pleas. Learned Departmental Representative pleads that the assessee has not filed the relevant details of these foreign travel expenses. As categorically demonstrating all relevant dates, payment channel, particulars followed by corresponding sums in a tabulated form. No irregularity or infirmity is pointed out therein. We find no reason to interfere in the lower appellate findings under challenge. Oil and petrol expenses disallowance - Held that:- Assessing Officer invoked the impugned disallowance @ 20% of the gross claim on estimation basis only. The CIT(A) deletes the same quoting Assessing Officer’s failure in pin pointing specific defects in assessee’s claim. There is no dispute that the assessing authority has already accepted 80% of the claim sum by not raising any issue therein. We conclude in these facts that the CIT(A) has rightly decided this issue in assessee’s favour. Seeks revival of PF and ESIC contributions disallowances - Held that:- Their lordships in a latter decision (2014 (1) TMI 502 - GUJARAT HIGH COURT) in case of Gujarat State Road Transport Corporation uphold an identical disallowance pertaining to employees contributions to PF/ESIC. We draw support therefrom to direct the Assessing Officer for framing a fresh computation accordingly qua employee’s contributions in question. We come to employers contribution disallowance issue to notice that their lordships in assessee’s own case [2014 (3) TMI 1120 - GUJARAT HIGH COURT] reject Revenue’s identical argument. There is no distinction in the impugned assessment year as pointed out in course of hearing. We partly accept this Revenue’s substantive ground. Section 80HHC deduction issue qua interest income, exchange gain, provision written back and scrip sale - Held that:- As decided in assessee's own case In case the impugned interest receipts are held to be business income netting formula is to be allowed as per case law CIT vs. Shri Ram Honda Power Equipments (2007 (1) TMI 86 - HIGH COURT, DELHI). Sri Patel fails to point out any exception in the impugned assessment year since we do not see an finding in the lower authorities’ orders on the crucial aspect as to whether the interest income in question is business income or not. Foreign exchange gain component vis-à-vis assessee’s claim section 80HHC deduction - Held that:- There is no quarrel that the assessee has already succeeded before this tribunal in assessment year 2000-01 on the very issue quoting its earlier order in CIT vs. Priyanka Gems [2014 (3) TMI 938 - GUJARAT HIGH COURT]. The Revenue fails to highlight any distinction in the impugned exchange gains involved in these two assessment years in question. We follow consistency to decline this Revenue’s ground. Section 80HHC deduction issue is qua provisions written back including excise duty and doubtful debts component - Held that:- t transpires from the case file that neither of the lower authority discusses the relevant findings about the assessee’s action in allegedly reversing notional entries as per ICAI guidelines and corresponding impact on its profits. Shri Patel takes us to page 90 of the paper book. We find the same to be assessee’s written submissions instead of the relevant evidence. He files before us a written note explaining reversal in question. We observe that this detailed document forms all the more reason for us to send this issue back to the Assessing Officer for adjudication afresh since the same had not been dealt with in the first round Allowability of section 80HHC deduction on scarp sale - Held that:- Turnover’ component in section 80HHC to mean only amounts of sale proceed received in respect of goods in which the concerned assessee is dealing with. The CIT(A) observes in lower appellate findings that assessee’s scrap is natural outcome of its manufacturing process. Learned Departmental Representative points out that the assessee has not filed any material highlighting the impugned scrap to have been generated from export activities. He does not point out any exception to earlier assessment year’s facts vis-a-vis those of the impugned assessment year. Nor is there any finding at AO’s behest that the impugned scrap is in respect of the goods in which the assessee is not dealing with. We find no reason to deviate from our earlier order. This Revenue’s argument is rejected. We partly accept the Revenue’s arguments on this substantive ground qua section 80HHC deduction issue involving four components of interest, foreign exchange gains, provisions written back and scrap sale; for statistical purposes as indicated in preceding paragraphs. Transfer pricing adjustment - Comparable controlled transaction - Held that:- CIT(A) who has proceeded on revenue neutral implication without even taking into section 92(1) r.w.s. 92C and 92C(4) proviso along with rules discussed hereinabove at length. There is hardly any dispute that this chapter and the rules notified thereunder prescribe that an arms length price is not the price an assessee is charging or paying for being a party in the international transaction in question but it is the price i.e. to be paid or charged in such a comparable controlled transaction in comparison to a comparable un-controlled transaction. We repeat that the TPO has not kept in mind this fine distinction. We accordingly reverse his action on this sole legal principle. Needless to say, the CIT(A) has already deleted the impugned adjustment. We find no reason to interfere in the lower appellate order albeit on a different score as enumerated hereinabove
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