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2015 (5) TMI 259 - HC - Income TaxShare capital expenses - AO made disallowance of expenses claimed u/s 35D in respect of capital raising expenses being one-tenth on the ground that these were not covered under the said provision - ITAT confirming order of CIT(A) in deleted addition - Held that:- In Multi Metals Ltd. [1990 (10) TMI 55 - RAJASTHAN High Court] and Goa Carbon Ltd.'s cases (1993 (9) TMI 344 - BOMBAY HIGH COURT), it has been held by the Rajasthan and the Bombay High Courts, respectively, that any expenditure incurred by way of fees paid to the Registrar of Companies for enhancement of the authorised capital is deductible over a period of ten years under section 35D(2)(c)(iv) of the Act. We are in agreement with the aforesaid view and do not find any infirmity in the order of the Commissioner of Income-tax (Appeals) or the Tribunal in this behalf. - Decided in favour of assessee. Commitment charges/guarantee commission - pledging of land as collateral security to bank for loans - ITAT confirming order of CIT(A) in deleted addition - Held that:- CIT(Appeals) has considered the issue and has also followed the decision of Indian Aluminium Cables Ltd. (No. 1) [1989 (1) TMI 14 - DELHI High Court ]. It is further noticed that the fact that the loan was taken for which the immovable property of the sister concern of the assessee has been pledged was for the purpose of the business of the assessee is not in dispute. Obviously, if the property of the sister concern of the assessee is pledged for the business purpose of the asses see, the sister concern is entitled to be given a guarantee commission/ commission charges. In the circumstances, the finding of the Commissioner of Income-tax (Appeals) as confirmed by ITAT are correct. - Decided in favour of assessee. Disallowance of maintenance of guest house - ITAT confirming order of CIT(A) in deleted addition - Held that:- The Commissioner of Income-tax (Appeals) and the Tribunal concurrently concluded that the expenditure was incurred for maintenance of the place for the employees who visited the factory for official purposes for the purpose of business. In the light of the aforesaid findings, no infirmity is found in the order of the Commissioner of Income-tax (Appeals) and the Tribunal deleting this disallowance. - Decided in favour of assessee. Disallowance of 'inauguration expenses' as per the provisions of section 37(2A) - ITAT confirming order of CIT(A) in deleted addition - Held that:- Respectfully following the decision of this Tribunal in the assessee's own case for the assessment year 1993-94, the finding of the Commissioner of Income-tax (Appeals) & ITAT on this issue stands upheld. - Decided in favour of assessee. Trading addition - ITAT confirming order of CIT(A) in deleted addition - Held that:- The Commissioner of Income-tax (Appeals) and the Tribunal have followed the earlier decision in the case of the assessee for the assessment year 1993-94 which was not shown to have been upset by any higher court. Thus, the approach of the Commissioner of Income-tax (Appeals) and the Tribunal cannot be faulted on this deletion. - Decided in favour of assessee. Late deposit of employees' contribution to PF and ESI - disallowance u/s 36(1)(va) - ITAT confirming order of CIT(A) in deleted addition - Held that:- Tribunal, while upholding the finding recorded by the Commissioner of Income-tax (Appeals), observed that the amounts had been paid before the due date of filing the return and, therefore, the same is allowable. The issue raised herein is covered by the decision of this court in the case of the assessee in Nuchem Ltd. v. ITO (2013 (1) TMI 457 - PUNJAB AND HARYANA HIGH COURT) wherein it has been so held. - Decided in favour of assessee. Disallowance of amount paid for market survey - AO disallowed the same on the premise that the assessee had not utilised the survey report in its business activities as the activity of powder quoting for which the report was obtained had not been carried out - CIT(A) allowed the claim also confirmed by ITAT - Held that:- We do not find any error or fault in the approach of the Commissioner of Income-tax (Appeals) or the Tribunal. It was not mandatory that the survey report should have essentially resulted in enhancement of the profits of the company by taking action thereupon except that it was required to be in the course of the business activity. It was not in dispute that the survey report was obtained during the course of business activities of the assessee for exploring the feasibility of powder coatings as the company was manufacturing UF/MF powder. The plea of the Revenue is, thus, rejected. - Decided in favour of assessee.
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