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2012 (8) TMI 225 - AT - Income TaxDis allowance of Peripheral Development Expenses - CIT(A)allowed partial relief - Held that:- As suggested by the Committee being a Government Body, the ITAT, Cuttack Bench in assessee’s own case for AYs 1999-2000 and 2002-03 has held such expenditures allowable u/s.37 as revenue in nature by placing reliance on various judicial pronouncements on the issue. The learned CIT-DR could not bring any decision contrary to the above. Therefore, the facts and issue being the same in the present Assessment Year the expenditure claimed under the head “Peripheral Development Expenses” is allowable u/s.37 - in favour of assessee. Computation of deduction u/s.80HHC - Non inclusion of sales tax and Excise Duty while arriving at total turnover by assessee - Held that:- Direction to exclude Excise duty and Sales tax from the total turnover for the purpose of deduction of Section 80HHC as decided on in the case of CIT v. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT]that excise duty and sales tax were includible in the "total turnover", which was the denominator in the formula contained in section 80HHC(3) as it stood in the material time - against revenue. Deduction of 90% of the entire incomes credited to the P & L account for the purpose of deduction u/s.80HHC - Held that:- As decided in case of ACG Associated Capsules (P) Ltd [2012 (2) TMI 101 - SUPREME COURT OF INDIA]that ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads ‘PGBP’ is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business - Matter remanded back to A.O. to work out the deductions – Decided in favor of assessee Dis allowance of expenses under the head “Miscellaneous Expenses” - includes an amount of interest on land compensation which is capital expenditure - Held that:- As the assessee has paid interest on the delayed payment of compensation for the land acquired by the assessee - as capitalization of the asset has not been disputed therefore interest payment on delayed compensation cannot be allowed as revenue expenditure - CIT(A) confirming the disallowance is therefore upheld and the ground raised by the assessee is dismissed. Disallowance of claim of additional depreciation - Plants and Machinery installed in its new industrial undertaking called “Rolled Product Unit” Held that:- As per Section 32(1)(iia) inserted by the Finance Act, 2002 both acquisition and installed of plant or machineries should take place after 31st March,2002 to enable the assessee to claim additional depreciation of 15% if it achieves substantial expansion by way of increase in the installed capacity by not less than 25% in the previous year - As RPU unit though acquired by the assessee on amalgamation which the amalgamated Company had started commencement of installation of the said unit after 1.4.2002 (during F.Y. 2002-03 and 2003-04) enabling the UNIT to become operative and capable of manufacturing Rolled products for Commercial purpose. - as the assessing authorities have not examined this aspect of the case whether any such plant and machinery acquired and installed after 1.4.2002 in the said plant by the assessee - restore this issue to the file of the Assessing Officer for reconsideration - in favour of assessee. Disallowance of Prior Period adjustments - the expenses relates to payment for hiring of helicopter from Govt. of Orissa for visit of Minister - Held that:- As the helicopter was hired during the month of April, 2002, the hiring charges to be paid by the assessee was only crystallized during the AY under consideration on the basis of bill drawn on the assessee by another Govt. Agency i.e., Coal India Ltd. Therefore, the income having crystallized during the year under consideration to Coal India Ltd., thus concluding that the said expenditure can be allowed in the AY under consideration correspondingly - in favour of assessee. Disallowance of Other Misc. expenses - Held that:- The accounting procedures adopted by the assessee should not leave a room for the assessee to park majority of the expenses to the tune of ₹ 76 lakhs as Misc. Expenses when the AO sought to disallow part of the expenses not pertaining to the business which the learned CIT(A) reduced heavily - to put a bar on such practice, a token disallowance has been made by the CIT(A) - against assessee. Disallowance of the loss claimed on revaluation of non- moving stores & spares - CIT deleted it - Held that:- If an item is lying in the inventory either unsold or unutilised, if there is a change in the intrinsic value, an assessee can revalue such assets, and claim the loss on account of revaluation as a charge against profits as decided in vs. CIT [1953 (10) TMI 2 - SUPREME COURT]- in favour of assessee. Dis allowance of addition of payment under benevolent Scheme - CIT deleted it - Held that:- Deleted by ITAT, Cuttack Bench in assessee’s own case for the AYs 1993-94 to 1998-99 & 2000-01. thus follow the same - decided in favour of assessee. Addition being donation made to Sports Authority of India - Held that:- Following the CIT case decided of Cloth & General Mills Co. Ltd [1978 (4) TMI 75 - DELHI HIGH COURT] CIT(A) has deleted the impugned addition in concluding that the payment to Sports Authority of India is not in the nature of donation but in the nature of advertisement and publicity, which is an allowable expenditure - Whenever newspaper coverage or radio or TV coverage took place, the name of assessee would be mentioned as one of the sponsors, thus the expenditure is therefore clearly for the enhancement of the brand value and image of the company.
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