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2013 (2) TMI 95 - AT - Income TaxDisallowance of deduction claimed for the provision made for impending union settlement in respect of Goa factory workers - Held that:- There is no dispute that the provision made by the assessee for impending union settlement in respect of Goa factory workers is a contractual liability and the same was in dispute as there was no settlement arrived at between the parties. The assessee has also accepted this position however, he has sought limited relief by way of a direction to be given to the AO to verify whether such settlement has taken place in the year under consideration and if so, allow the deduction claimed by the assessee. Thus AO is directed to give the assessee an opportunity to establish on evidence as to whether the settlement was arrived at in the year under consideration and to decide the issue accordingly after verifying the assessee’s claim - in favour of assessee for statistical purposes. Disallowance of deduction being 2% of dividend income on account of administrative and overhead expenses while calculating the deduction u/s 80M - Held that:- Following the decision of CIT vs. General Insurance Corporation of India [2000 (9) TMI 12 - BOMBAY HIGH COURT] that only the expenses those are directly relatable to earning of dividend income should be reduced for the purpose of computing deduction u/s 80M and any disallowance of such expenses made on adhoc or estimate basis cannot be sustained. Thus direct the AO to allow the deduction u/s 80M as claimed by the assessee in respect of dividend income - in favour of assessee. Including sales-tax amount to total turnover for the purpose of computing deduction u/s 80HHC - Held that:- This issue is squarely covered in favour of the assessee by the decision of CIT vs. Laxmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] & direct the AO to exclude the sales-tax amount from the figure of total turnover for computing deduction u/s 80HHC - in favour of assessee. Disallowance of payment made to M/s Asia Today for broadcasting Cibaca Gel Spots on Zee TV - Held that:- As the assessee has contended that the amount in question was paid by the assessee to a non-resident for services rendered outside India DR has fairly suggested that this matter may be sent back to the AO for examining the stand of the assessee that the amount in question not being chargeable to tax in India in the hands of the respondent, no tax at source was deductible from the payment thereof - in favour of assessee for statistical purposes. Inclusion or exclusion of excise duty from the figure of total turnover for the purpose of computing deduction u/s 80HHC - Held that:- Covered in favour of the assessee by the decision of Laxmi Machine Works (2007 (4) TMI 202 - SUPREME COURT) as well as Sudarshan Clemical Industries Ltd.(2000 (8) TMI 73 - BOMBAY HIGH COURT) to exclude the excise duty from the figure of total turnover for the purpose of computing deduction u/s 80HHC - in favour of assessee. Allowing the proportionate amount of the premium on redemption of non-convertible debenture - Held that:- While disallowing the deduction claimed by the assessee on account of entire premium on redemption of non-convertible debenture in assessment year 1992-93, the Tribunal has held in its order dated 12th Oct., 2011 that the assessee is entitled for deduction only to the extent of proportionate amount of premium payable on debentures as the premium so payable has to be spread over to the period of debenture as held by Madras Industrial Investment Corporation Ltd. [1997 (4) TMI 5 - SUPREME COURT]. Thus accordingly direct the AO to allow proportionate deduction on account of premium payable by the assessee on the debenture in the year under consideration after taking into consideration the period of debenture. Allow depreciation on the written down value of the foreign visitors expenditure disallowed as capital expenditure by the Tribunal - Held that:- Relief sought by the assessee therein is that certain expenses incurred on the traveling of foreign visitors having been held to be capital expenditure in assessment year 1992-93 being in relation to installation of machinery, depreciation thereon may be allowed in the year under consideration. As agreed by the learned representatives of both the sides, direction can appropriately be given to the AO to verify the final position on this issue in assessment year 1992-93 and to allow appropriate relief to the assessee accordingly. Therefore, direct the AO to verify the stand of the assessee as regards capitalization of the relevant expenses in assessment year 1992- 93 and decide this issue relating to consequential relief to the assessee accordingly. Disallowance of expenses incurred on VRS - CIT(A) deleted the addition - Held that:- A perusal of the relevant portion of the Tribunal’s order for assessment year 1993- 94 on similar issue shows that it was noted by the Tribunal that the liability in question was well supported by the actuarial valuation as well as the agreements between the assessee company and the employees. However, keeping in view that the said evidence was not examined by the AO, the matter was restored to the file of the AO in the interest of justice giving an opportunity to the AO to verify the same - in favour of revenue for statistical purposes. Disallowance of expenses incurred on promotional cinema films and on production of radio programme - Held that:- A similar disallowance made by the AO in assessment years 1992-93 and 1993-94 has been held to be unsustainable by the Tribunal following the decision in the case of CIT vs. Geoffrey Manners and Co. Ltd. 2009 (2) TMI 13 - BOMBAY HIGH COURT, thus the expenditure incurred on production of promotional films etc. has been allowed as revenue expenditure - against revenue. Addition on account of unutilized modvat credit - Held that:- This issue is squarely covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of CIT Vs Indo Nippon Chemicals Co. Ltd. (2003 (1) TMI 8 - SUPREME COURT) Addition made by the AO by invoking Rule 6D(2) - CIT(A) deleted the addition - Held that:- The limits of expenditure incurred on travels to the extent of stay in hotel as per Rule 6D is confined to daily allowance as referred to in the said Rule and does not extent to any other expenditure which is incurred wholly and exclusively for the purpose of business - in favour of assessee. Disallowance of expenditure incurred on computer software - CIT(A) deleted the said disallowance - Held that:- The exact nature of expenses incurred on computer software is required to be considered in the light of the guidelines laid down by in the case of Amway India Enterprises [2008 (2) TMI 454 - ITAT DELHI-C]. Thus restore the matter to the file of the AO for deciding the same afresh - in favour of Revenue’s for statistical purposes. Losses of eligible unit be ignored for determining the deduction u/s 80HHC if such loss relating to earlier years had been set off against other income - Held that:- Restored to the file of the AO with a direction to verify the claim of the assessee that there are no brought forward losses available to be set off and to allow appropriate relief to the assessee in terms of deduction u/s 80HHC if the same is found to be correct.
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