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2016 (10) TMI 1214 - HC - Income TaxDepreciation on asset used for busniss purpose - ship neither used nor intended to be used as indicated in the Director's Report - Held that:- The impugned order of the Tribunal has allowed the Respondent Assessee's appeal on the issue of depreciation by following its order in the case of the same Respondent Assessee in Assessment Year 1985-86. Revenue has accepted the Tribunal's order for the Assessment Year 1984-85. Further, no distinguishing feature in the subject Assessment Year to that existing in the Assessment Year 1984-85 has been brought to our notice. Thus, the issue raised in the question as proposed being accepted by the Revenue - decided against revenue Allowance of expenditure being fees paid to the Registrar of Company for increase in the authorized share capital of the company - allowable business expenditure - Held that:- This very issue arose for consideration before the Apex Court in General Insurance Corporation [2006 (9) TMI 116 - SUPREME COURT], wherein the Court held that in case of issue of bonus shares, there is no increase in capital structure of the assessee before it. It does not give rise to any inflow of fresh funds as the capital employed continues to remain the same. Nor is there any benefit of enduring nature received on issue of bonus shares. Therefore, the expenses incurred for issue of bonus shares are to be allowed as revenue expenditure. Investment allowance on the foreign exchange fluctuations - Held that:- The impugned order of the Tribunal has allowed the Assessee's appeal before it by following its order for the Assessment Year 1984-85 in the Assessee's own case. The Revenue has not brought anything on record to show that it was aggrieved by the order of the Tribunal for Assessment Year 1984-85 and it had appealed to a higher forum. Therefore, the Revenue could have no grievance with the impugned order as it merely follows its order for the earlier Assessment Year 1984-85 which has been accepted by it. Also in case of Associated Bearing Co. Ltd. vs. CIT [2005 (10) TMI 75 - BOMBAY HIGH COURT] held investment allowance on the increased amount, consequent to foreign exchange fluctuations, is allowable. Addition being interest attributable to the interest free advances made to subsidiaries u/s 36 - Held that:- We proceed on the basis that the Revenue has accepted the Tribunal's order for the Assessment Year 1985-86. Further, no distinguishing features in the subject Assessment Year to that existing in the Assessment Year 1985-86 have been pointed out. Therefore, the question as raised herein does not give rise to any substantial question of law. Thus, not entertained. Disallowance of sundry contributions made to the unrecognized entities u/s 40A(9) - tribunal deleted the addition - Held that:- The impugned order of the Tribunal merely follows its orders for the Assessment Years 1983-84, 1985-86, 1993-94, 1994-95 and 1995-96. Therefore, as they have been accepted by the Revenue and no distinguishing features in the subject Assessment Year to that existing in the Assessment Years 1983-84, 1985-86, 1993-94, 1994-95 and 1995-96 have been pointed out, no substantial question of law arises. (d) In the circumstances, the question as raised does not give rise to any substantial question of law. Thus, not entertained. Appeal admitted on question 5 - “Whether the Tribunal was correct in law in deleting the disallowance of ₹ 2,00,000/being penalty paid u/s 125 of the Custom Act, following the decision of the Apex Court in the case of Ahmadabad Cotton Mfg. Co. Ltd. [1993 (10) TMI 1 - SUPREME COURT], without appreciating that the above decision of the Apex Court (dated 15/10/1993) was delivered prior to the insertion of explanation to section 37 of the Income Tax Act by the Finance (No.2) Act, 1998 with the retrospective effect from 01/04/1962, according to which the above penalty was not allowable as deduction.
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