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2015 (8) TMI 608 - AT - Income TaxExpenses incurred on Life Extension Program (LEP) of Thermal Power Station I (TIPS-I) and expenditure on Rejuvenation of Bucket Wheel extractors - revenue v.s capital expenditure - Held that:- As decided in assessee's own case [2012 (10) TMI 751 - ITAT CHENNAI] wherein held what was replaced was only the parts of machinery and the expenditure was incurred only to preserve and maintain the existing assets and therefore, the expenditure on such repairs is allowable as deduction under current repairs. Following the decision in case of Saravana Spinning Mills P. Ltd. (2007 (8) TMI 16 - SUPREME COURT OF INDIA) that when an expenditure was incurred to preserve and maintain already existing asset and such expenditure is not bringing any new asset into existence or obtaining new advantage such expenditure is allowable as current repairs. - Decided in favour of assessee Whether assessee is entitled to 100% deduction u/s.80IA, as second year in respect of profits earned in the unit VII of TPS II - Stage II which was commissioned in the previous year 1994-1995? - CIT(A) allowed claim - Held that:- We are inclined to dismiss the appeal of the Revenue as the first year of claim of assessee was assessment year 1999-2000 and 80IA(2) permits the assessee to claim deduction for any ten years out of first fifteen years. See Velayudhaswamy Spinning Mills (P) Ltd case [2010 (3) TMI 860 - Madras High Court] - Decided in favour of assessee Reopening of assessment challenged - Held that:- Reopening u/s.147 is held to be valid. The assessee has tried to take shelter under the exception provided by the above stated proviso where an assessment under sub-section (3) of section 143 has been completed, no action after the expiry of four years from the end of the assessment year can be taken. But as stated above, when the assessee has not disclosed fully and truly the facts necessary for the assessment, this proviso will not come to its rescue. Same is applicable to other reasons records for reopening of assessment. Consequently, we hold that the entire reassessment proceeding in this case is valid and therefore, the action of the Assessing Officer is upheld. The assessee fails on this legal issue. - Decided against assessee. Depreciation on loose tools - Whether loose tools would only partake of the character of consumables in regard to an assessee comparable to the assessee - Held that:- Assessee has been claiming loose tools as capital expenditure and claiming deprecation at 25%. Suddenly in the assessment year under consideration there was a change in the accounting policy without any reason. Even before us, the assessee was not able to furnish any reason for change in accounting policy. In the case of Gujarat Small Scale Industries Corporation Ltd vs. CIT (1981 (7) TMI 8 - GUJARAT High Court ), wherein held that the Tribunal perfectly justified in taking the view that the jigs and fixtures were part of the plant and machinery. The deduction was claimed on the ground that the tools, jigs and fixtures were losing their utility fast. It, therefore, amounted to a claim for depreciation. The rate of deprecation could not be claimed as fixed by the assessee's expert. It could be claimed only at the prescribed rate, i.e. at the general rate of 10%. The Tribunal was justified in disallowing the claim of the assessee. The Commissioner of Income Tax(A) in this case followed the above judgment. Being so, we do not find any infirmity in the order of the Commissioner of Income Tax (Appeals). - Decided against assessee. Failure to deduct tax at source on payments made under the supply contract - Held that:- As assessee observed that levy of interest u/s.201(1A) depends on the income computed in the case of recipient as well as date of filing of the return of the recipient. It was brought to our notice that the appeal of the assessee for determining the income accruing in India is pending before appellate authorities/court. In view of this, we remit this issue back to the file of the Assessing Officer to re-compute the interest u/s.201(1A) after verifying the return of recipient and also in the light of judgment of Supreme Court in the case of CIT vs. Hindustan Cocacola Beverages (P) Ltd, [2007 (8) TMI 12 - SUPREME COURT OF INDIA], wherein held that where the payee has already paid tax on the income on which there was a short deduction of tax at source, recovery of tax cannot be made once again from the tax deductor. This issue is remitted back to the file of Assessing Officer for fresh consideration. - Decided in favour of assessee for statistical purposes.
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