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2014 (5) TMI 961 - AT - Income TaxTreatment of sales tax subsidy as revenue receipt – Held that:- As decided in assessee's own case for the earlier assessment year, it has been held that as per the comparative chart the terms and conditions applicable in 1979 scheme were of the same nature and intent of the 1993 scheme- salient features of the 1993 scheme are identical to that of 1979 scheme - CIT(A) has passed a reasonable order which does not need any interference on our part – Decided against Revenue. Treatment of trial run expenses as capital expenses – Held that:- Following Indo Rama Synthetics India Ltd. Versus Commissioner of Income-tax [2009 (9) TMI 635 - Delhi High Court] - one has to keep in mind the essential purpose for which such an expenditure is incurred - If the expenditure is incurred for starting new business which was not carried out by the assessee earlier, then such expenditure is held to be of capital nature - it would be irrelevant as to whether project really materialized or not - if the expenditure incurred is in respect of the same business which is already carried on by the assessee, even if it is for the expansion of the business, namely, to start new unit which is same as earlier business and there is unity of control and a common fund, then such an expense is to be treated as business expenditure. In such a case whether new business/asset comes into existence or not would become a relevant factor - If there is no creation of new asset, then the expenditure incurred would be of revenue nature - if the new asset comes into existence which is of enduring benefit, then such expenditure would be of capital nature - it was merely a case of expansion of existing plant - thus, the expenses incurred by assessee which were inherently of revenue nature were rightly allowed by CIT (A) – Decided against Revenue. Deletion of depreciation on computer accessories @ 60% - Held that:- As decided in assessee's own case for the earlier assessment year, it has been held that the classification for the purpose of computation of depreciation under the Companies Act has no relevance - the disallowance cannot be based merely on entries made in the books of accounts or in the annual accounts - The AO has not brought out any infirmity in the claim of the assessee – the order of the CIT(A) is upheld – Decided against Revenue. Deletion of penalty paid to custom authorities – Custom redemption fees – Held that:- Following M/s Usha Micro Process Controls Ltd. Versus Commissioner of Income Tax [2013 (10) TMI 9 - DELHI HIGH COURT] - CIT (A) has discussed the issue in the light of various provisions of Customs Act - To comply with the said notification, the assessee applied for the issuance of certificate to be submitted at the time of clearance of the imported vehicle - the required certificate was not issued by the prescribed authority by the time of import/clearance of car, the customs authority confiscated the imported car - Commissioner of Customs Authority (Import) gave the option to the assessee to get released the imported car on payment of fine of Rs.15 lacs leviable u/s 125 of the Customs Act, 1962 and penalty of Rs.8 lacs u/s 112(a) of the Customs Act 1962 - the assessee was required to re-export the car on payment of notional penalty in terms of section 112(a) of the Act – the fine in lieu of the confiscation is reduced to Rupees four lacs. The importation of hardware as authorised and regarding the importation of software, the appellants had requested for the re-exportation of the software and had also placed on record to the effect that the software which was sent with the hardware was not ordered by the appellants and the appellants were keen for sending them back - There is complete absence of the elements of mens rea (sick) and the valuation of the hardware has been taken at a higher figure due to difference of opinion - originally the penalty which the appellant had been directed to pay was deleted by the CEGAT - the amount of redemption fine was compensatory it fell outside the mischief of explanation of Section 37(1) of the Income Tax Act – Decided against Revenue.
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