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2013 (1) TMI 230 - AT - Income TaxDisallowance u/s.43B (actual payment clause) - PLA balance of excise duty on vehicles,R&D Cess on vehicles and excise duty on spare parts - CIT(A) deleted the addition - Held that:- The issue stands decided in favour of the assessee by the Hon'ble ITAT in its own case for A.Y. 1999-00. The decision of the ITAT Special Bench of Chandigarh in the case of DCIT vs Glaxo Smithkline Consumer Health Care Ltd. reported in (2007 (7) TMI 334 - ITAT CHANDIGARH ) is directly on the issue of balances in PLA and is allowable deduction u/s 43B - in favour of assessee. Disallowance of customs duty paid on import of components - Held that:- Since CIT (A) had not granted relief to the assessee on this issue the ground becomes infructuous. In view of this, this ground stands dismissed - against assessee. Disallowance of customs duty on inventory in closing stock -AO disallowed the Appellant's claim u/s 43B - Held that:- This issue is covered in favour of the assessee by the decision of the ITAT in assessee’s own case for Assessment Years 1999-00, 2000-021, 2001-02 and 2005-06 in the light of the decision of Hon’ble Supreme Court in the case of Berger Paints [2004 (2) TMI 4 - SUPREME COURT] - in favour of assessee. Disallowance VRS payment u/s 35DDA - not in accordance with the Rule 2BA r.w.s.10(10C) - CIT(A) deleted the addition - Held that:- Guidelines in Rule 2BA where for the purposes of determining the taxability of the VRS payment in the hands of the individual employees and had nothing to do with the allowability of deduction of the VRS payment u/s 35DDA in the hands of the employer. As per the language of See. 35DDA, the deduction is allowable in respect of any VRS scheme and no conditions regarding the scheme are laid down. Under the circumstances, the deduction claimed would be allowable and the assessee gets relief to this extent decided by ITAT in assessee’s own case for Assessment Years 2004-05 and 2005-06 - in favour of assessee. No TDS before making more payments to non-residents u/s 40A - CIT(A) deleted disallowance - Held that:- Section 195 clearly shows that the deduction of tax is liable to be made by a person responsible for paying to the non-resident any sum chargeable under the provisions of this Act. The words “chargeable under the provisions of this Act clearly shows that the payment which is made by the assessee to the non-resident is liable to be taxed in India in the hands of the non-resident. Here it is noticed that the commission has been paid to the agents for the sale of the vehicles and re-imbursement of advertisement expenses incurred outside India. Obviously, these expenditures incurred outside India does not make them taxable in India under the Act and the non-resident itself is not taxable in India. In the circumstances, the provisions of Section 195 will not be attracted in the case of these payments and the CIT (A) was right in deleting the disallowances made - in favour of assessee. Expenses incurred for club membership of Private Clubs - CIT(A)allowed as business expenditure - Held that:- No reason to interfere with the order of the CIT(A) who has just followed the Tribunal order in the assessee’s own case for AY 2001-02 and the binding decision of the Delhi High Court CIT Versus NESTLE INDIA LTD. [2007 (4) TMI 180 - DELHI HIGH COURT] & CIT v. Samtel Color Ltd [2009 (1) TMI 26 - DELHI HIGH COURT]in respect of the issue in question - in favour of assessee. Disallowance of foreseen price increase on inputs both provision and actual payment - CIT(A) deleted the disallowance - Held that:- This issue has already been adjudicated in the assessee appeal to ITAT for AY 2003-04 wherein ITAT has remanded the matter to AO to grant appropriate relief to the assessee on this issue after considering all the relevant facts and after giving opportunity to the assessee & also mentioned that a consistent approach should be adopted by the department by allowing the deduction in question to the assessee either in AY 2003-04 or in AY 2004-05. As in AY 2003-04 CIT(A) has granted relief on above disallowance & the issue is already adjudicated in appeal for Assessment Year 2003-04, this ground of revenue’s appeal dismissed. Additional ground that the amount of subsidy raised by the applicant is in the nature of a capital receipt not exigible to tax - Held that:- It is a settled law that nature of the subsidy received has to be decided on the basis of the objective behind the grant of such subsidy. It is, thus, a mere question of applying of 'purpose test' as has been laid down recently by their Lordships of the Supreme Court in the case of Ponni Sugar (2008 (9) TMI 14 - SUPREME COURT) to the object stated in the relevant policy under which the subsidy/incentive is granted. As the entire documents are very much on records of the lower authorities, except that the said documents are not technically available in the records for the relevant assessment year 2004-05 in the interest of justice and equity, the ground taken in the cross objection by the assessee accepted and also admit the additional evidences as these additional evidences are necessary to do the substantial justice in the matter - appeal of assessee is allowed for statistical purposes.
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