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2012 (4) TMI 373 - AT - Income TaxDepreciation - Reclassification of Plant & Machinery as Furniture - the assessee submitted that the assessee engaged in the manufacture of the chemicals and vaccines and for this the assessee has laboratories - High Court s judgment in the case of CIT v. Park Devis (India) Ltd. (1994 -TMI - 19344 - BOMBAY High Court) is clear on the issue that the functional test has to be applied in deciding if a particular tool constitutes plant and machinery or the furniture - if the Stools Tables Stainless Steel racks SS cupboards SS trolleys SS trays etc are required for the laboratory purpose i.e. for the purpose of production or processing of the chemical tests in the laboratory premises leading to the production of the stocks they must be categorized as plant and machinery - Held that the revenue authorities have carried away more by the nomenclature rather than the functions of the impugned items - Decided in favor of the assessee Regarding depreciation on intangible Asset being non-compete fee - the assessee s submissions in nutshell are that (i) it is the decision of the revenue to treat the said non-compete fee as the capital expenditure and to grant depreciation on the same for the AY 2000-01 and in effect it already entered the block of assets in the AY 2000-01 by virtue of the thrusting by the AO - if the capital expenditure by way of non compete fee in question is an intangible asset and if the same is depreciable asset for the benefits u/s 32 of the Act - ITAT in the case of Asstt. CIT v. Real Image Tech (P) Ltd 2008 -TMI - 69913 - ITAT MADRAS-B - Decided in favor of the assessee. Reduction of Sales tax refund from business profits while computing deduction U/s. 80HHC - held that - AO shall grant relief in this regard Reducing interest income from business profits while computing deduction u/s.80HHC - held that - matter remanded to AO for fresh decision. Regarding deduction u/s. 80HHC - the profit of the EOU unit u/s. 10B forms part of the profits of the business as defined in Explanation (baa) to section 80HHC of the Act for the purpose of determining the allowable deduction under the said section and consequently the export and total turnover of the said EOU unit are required to be included in the export turnover and total turnover of the assessee as well - the assessee did not include the profit of the EOU unit Export and Total turnovers in the numerator and denominator of the formula devised for computation of deduction u/s 80HHC and the assessment was completed accordingly - the assessee is of the view that the Tribunal has confirmed the principle of inclusion of the Export turnover in the Denominator of the formula devised for computation of allowable deduction u/s 80HHC. Considering the principle of parity once a constituent is added to the total turnover the denominator the same has to be included to the export turnover the numerator - Inclusion in profits of business is a wasteful exercise in this case hence it does not make any difference since the special deductions quantitatively exceeds the available profits and gains of the business of the assessee - Decided in favor of the assessee by way of direction to AO to recompute the deduction u/s 80HHC
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