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2012 (8) TMI 492 - AT - Income TaxDisallowance on account of Voluntary Retirement Scheme (VRS) - Held that:- The assessee has come out with VRS forced by commercial reasons and the liability is well supported by the actuary valuation the right of employees are supported by the agreement with the company and employee as the actual valuation certificate and the agreements between the company and the employees - as all the documents were not examined by the AO in the interest of justice and fair play this matter is restored back to the file of AO - in favour of assessee for statistical purposes. Disallowance of provisions of expenses made at year end - Held that:- CIT(A) has rightfully directed the AO to look into the contention of the assessee that in view of the method of accounting followed by them in which provision for expenses made at the end of the year are credited to the respective expenses heads in the subsequent year ought to be reduced to that extent and see that the same amount is not doubly taxed and has rightly confirmed the addition of Rs. 40,90,453 - against assessee. Disallowance of expenses as being in the nature of capital expenditure - Held that:- As decided in CIT Versus M/s. Geoffrey Manners & Co. Ltd. (Now known as Wyeth Limited) [2009 (2) TMI 13 - BOMBAY HIGH COURT] the claim of the assessee to treat the expenditure on production of films as revenue expenditure - in favour of assessee. Disallowance being the depreciation on Kandla plant - Held that:- Depreciation is allowed if the plant was actually in operation and which fact has not been brought on record, the issue deserves to be restored back to the file of AO to verify whether the plant was actually in use during the year under consideration and if satisfied the depreciation may be allowed - in favour of assessee for statistical purposes. Disallowance of 20% on foreign travel expenses - Held that:- As on identical facts the Tribunal has deleted the disallowance sustained by CIT(A) no point to disallow the claim in period under question - in favour of assessee. Disallowance of expenses for impending union settlement - Held that:- When there was a memorandum of settlement dt. 29.2.1988 and thereafter dt. 7.1.1991 why the assessee had not made any provision either on the basis of MOS dt. 29.2.1988 or on the basis of charter of demand dt. 7.1.1991 - as the facts being identical of AY 1992-93 with the current year and also considering the settlement which is executed on 23.8.1993 relates to A.Y. 1994-95 and the Ld. CIT(A) has rightly held that deduction in the year under consideration does not arise - against assessee. Disallowance of hotel expenses and air fare on foreign visitors coming to India - Held that:- Considering the details of foreign travel expenses submitted by the assessee and respectfully following the decision of the Tribunal in assessee’s own case for A.YT. 1992-93 no dissallowance of the claim of expenses incurred by the assessee for the purpose of business is warranted - against revenue. Disallowance for expenditure incurred on transit houses maintained at Goregaon and Goa - Held that:- Considering the decision of Tribunal in assessee's own case in AY 1991-92 wherein Tribunal has held that expenditure of food and beverages have to be allowed - thus as in the year in question AO is directed to consider the details filed by the assessee giving break-up of expenses incurred on guest house maintenance and allow the expenses incurred on food and beverages - in favour of assessee for statistical purposes. Apportionment of expenses - Lunch expenses, canteen expenses, business meeting expenses and expenses on AGM - Held that:- Considering the assessee's submission direct the AO to allow the business meeting expenses and expenses on AGM which expenses cannot come under the category of entertainment expenses and to add only Rs. 2,00,000/- out of total canteen expenses which is in the line of the finding of the Tribunal in assessee’s own case for assessment year 1992-93 - partly in favour of assessee. Inclusion of sales tax and trade discount from the figure of total turnover for the purpose of computing deduction u/s. 80HHC - assessee also took an additional ground by which asked to exclude excise duty element - Held that:- As decided in CIT Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] 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 - in favour of assessee. Disallowance of expenses for the A.Y. 1992-93 - Held that:- Considering the submissions of the assessee it can be concluded that as this liability was incurred for earning the profits and gains for the A.Y. 1992-93, therefore the same is allowable against the profits and gains for A.Y. 1992-93 and confirm the disallowance made by AO - against assessee. Disallowance of deduction u/s. 80HH - Organic Phosphates and Phosphites unit situated at Goa - Held that:- On submissions of assessee that there are no brought forward losses available as they have been set off from the profit of other units of the assessee need to be verified, it is desirable to restore this matter back to the file of AO - in favour of assessee for statistical purposes.
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