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2015 (4) TMI 101 - AT - Income TaxDisallowance u/s. 14A - CIT(A) deleted the disallowance - Held that:- CIT(A) while deleting the addition has noted that assessee has received only two half yearly interest warrant bonds during the year under appeal and which were collected in routine through bank account. He has further noted that the investments were made in the year 1995 and there have been no transactions in bonds during the year under review. We further find that on identical facts, the Co-ordinate Bench of Tribunal while deciding the assessee’s appeal for A.Y. 2005-06 and after relying on the decision in the case of CIT vs. Hero Cycle Ltd (2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT) decided the issue in favour of the assessee by holdingthat it is not in dispute that in respect of exempt income warrants the assessee had only received two interest warrants and four dividend warrants. No material was brought on record by the Revenue to show that any specific expenditure was incurred for earning exempt income - Decided in favour of assessee. Computation of deduction u/s. 80HHC - CIT(A) directing the A.O not to exclude 'other income' being bad debts recovered, Insurance claim, Sundry Creditors, Forfeiture of advances and Exchange rate fluctuation from the business profits, for the computation of deduction u/s 80HHC - Held that:- As decided in assessee's own case in A.Y. 2004-05 [2010 (10) TMI 974 - ITAT AHMEDABAD] Commissioner of Income Tax (Appeals) was justified in holding that 90% of such receipts are to be excluded for arriving at eligible profits of business. No specific error in the order of the Learned Commissioner of Income Tax (Appeals) could be pointed out by the Learned Departmental Representative. - As far as the issue with respect to exchange fluctuation and forefeiture of advances are concerned, we find that Ld. CIT(A) has considered the aforesaid items as being eligible for deduction u/s. 80HHC in view of the fact that those amounts have been assessed as business income by the AO. Before us, Revenue has not brought any material to controvert the findings of Ld. CIT(A). - Decided in favour of assessee. Addition u/s. 40(a)(i) - TDS short deducted on Royalty payment - CIT(A) deleted the addition - Held that:- CIT(A) while deleting the addition has given a finding that assessee has correctly deducted the TDS as per the rates provided in DTAA entered between the Government of India and Government of USA and therefore AO was not justified in disallowing the expenditure. Before us, Revenue has not brought any material on record to controvert the findings of Ld. CIT(A). We therefore find no reason to interfere with the order of Ld. CIT(A) and thus ground of Revenue is dismissed - Decided in favour of assessee. Disallowance of pre-paid excise duty - CIT(A) deleted the addition - Held that:- CIT(A) after considering the decision of Hon’ble Gujarat High Court in the case of Lakhanpal National Ltd [1986 (3) TMI 42 - GUJARAT High Court] and Berger Paints India Ltd [2004 (2) TMI 4 - SUPREME Court] has deleted the addition. Before us, Revenue has not brought any contrary binding material in its support. We further find that the assessee’s submissions of having followed the same method of accounting and claiming deduction of excise duty in earlier and subsequent years also have not been controverted by Revenue. - Decided in favour of assessee. Disallowance on account of provision for gratuity - CIT(A) deleted the addition - Held that:- CIT(A) after considering the submissions of the assessee has noted that the non-deductable provision of gratuity was disallowed by the assessee suo moto and accepted in the original assessment and no further disallowance was warranted as it would be a double disallowance. Before us, Revenue has not brought any material on record in support of its contention. We therefore find no reason to interfere the order of Ld. CIT(A) and thus this ground of Revenue is dismissed. - Decided in favour of assessee. Unpaid sales commission - CIT(A) deleted the addition - Held that:- CIT(A) after considering the submissions of the assessee has given a finding that the allowability towards sales commissions arose during the year and has been paid during the year and therefore the same was rightly claimed as expenditure. Before us, Revenue has not brought any contrary material on record in its support. We therefore find no reason to interfere with the order of Ld. CIT(A). - Decided in favour of assessee. Disallowance of bad debts - CIT(A) deleted the addition - Held that:- CIT(A) after considering the submissions of the assessee and following the order of his predecessor granted relief to the assessee. We further find that Ld. CIT(A) has noted that AO has not come out with any specific finding for making disallowance in respect of any particular bad debt but had made estimated disallowance. Before us, Revenue has not brought any contrary binding material in its support nor could controvert the finding of Ld. CIT(A). We therefore find no reason to interfere with the order of Ld. CIT(A) and thus this ground of revenue is dismissed. - Decided in favour of assessee.
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