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2014 (3) TMI 725 - AT - Income TaxDeletion on account of mould expenses - Expense or rent on moulds relate to M/s Dart India & ITL and not to the assessee company Held that:- There is no change in the facts, situation or in law thus, the Revenue cannot be allowed to adopt a different stand the decision in Commissioner of Income Tax Versus M/s Excel Industries Ltd. and Mafatlal Industries P. Ltd. [2013 (10) TMI 324 - SUPREME COURT] relied upon - when in earlier asstt. years the revenue accepted the order of the tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it - the expenditure on mould is allowable in the hands of the assessee - The payment of mould rental was done by the assessee under a contractual obligation with the contract manufacturer. The company had to import the molds from overseas group company on hire basis and provide the same to contract manufacturers to enable them to manufacture the products - Once the contract manufacturer completes the order placed by the assessee, the molds are returned back to the company and therefrom to the molds owners in case the particular molds, is not required for use of manufacturer the contract and molds borrowed by the assessee can by no stretch of imagination be considered as a colorable device the CIT(A) rightly the expenses as Revenue expenses the order of the CIT(A) upheld Decided against Revenue. Provision written back towards obsolete stock Held that:- CIT(A) held that the appellant company has been making provisions towards obsolete stock and these provisions were claimed as expenditure in earlier years the contention of the assessee that certain provisions as detailed in written submissions were written back and hence the same are required to be taken out of the income declared for the assessment year so as to avoid double taxation of the same amount is accepted - the CIT(A) has asked the AO to make some factual verification regarding the correctness of claim of the assessee and also to take necessary undertaking from the assessee to grant assessee the desired relief there is no infirmity in the order of the CIT(A) Decided against Revenue. Prior period expenditure - Disallowance of Customs and excise Commission on contract manufacturers Held that:- Even if the assessee has contended that it has taken the liability since, these manufacturers are exclusively selling the goods to it so the liability is in the nature of additional cost, the liability does not relate to this year and the same pertains to earlier years - Assessee cannot be allowed to claim such expenditure as revenue expenses which is claimed to have been incurred to safeguard the long term interest of the assessee, which remains unsubstantiated the CIT(A) held that, this expenditure cannot be treated to be a revenue nature and hence, not allowable against the taxable income Decided against Assessee.
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