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2013 (12) TMI 785 - HC - Income TaxNature of amount received representing as 'Capital Replenishment Reserve' by way of surplus free sale of sugar quota under the Scheme known as 'Sugar Incentive Scheme', which is inseparable part of trading receipts - Capital Receipt or revenue receipt - Held that:- the amount was utilized for expansion of the unit. So the assessee is entitled to get the benefit of this amount, which has already been granted by the Tribunal - following Ponni Sugars & Chemicals LTD. & ORS. [2008 (9) TMI 14 - SUPREME COURT], decided in favor of assessee. Disallowance of amount transferred to molasses reserve fund - Held that:- This issue is squarely covered as per the ratio laid down by this Hon'ble Court in the case of the Simbhaoli Sugar Mills Limited vs. The Commissioner of Income Tax, Meerut, ITR No.4 of 1985 dated 20.9.2005 [2005 (9) TMI 590 - ALLAHABAD HIGH COURT] where the expenditure is incurred while the business is being carried on and not for its extension or for the substantial replacement of its equipment, is a revenue expenditure and should have been allowed as an admissible deduction and accordingly answered the question in favour of the assessee. Valuation of closing stock on account of interest - in the valuation of closing stock the assessee has added to the cost the amount of bank interest i.e. after deduction of the interest receipt from the gross amount of the interest payable. But the A.O. opined that the gross interest payable should be included in the cost of valuation of closing stock so he has disallowed the claim made by the assessee but the appellate authorities have allowed the claim of the assessee. - Held that:- it is not evident whether the closing stock was pledged in the bank, what interest was paid on receipt viz a viz Fixed Deposits Receipts. Hence the facts are not clear. - matter remanded back to AO for fresh decision - Decided partly in favor of revenue.
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