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2014 (8) TMI 1156 - AT - Income TaxDisallowance of interest being estimated interest @ 15 percent on the advances made to various companies/other concerns - Held that:- Tribunal, for the A.Y. 1997-98, on a similar issue, by following the Tribunal’s order for the A.Y. 1992- 93, remitted the matter back to the file of the AO for fresh adjudication in the light of earlier decisions of the Tribunal as well as the judgments of the Hon’ble Apex Court in the case of S.A. Builders Vs. CIT [2006 (12) TMI 82 - SUPREME COURT]. In view of the fact that the orders of the then CIT(A) relied on by the Ld.CIT(A) for the impugned decision has been set aside by the Tribunal, we are of the considered view that it is just and proper that this issue is also set aside to the file of the AO for fresh adjudication. Disallowance of deduction of expenses on account of deferred revenue expenditure - Held that:- It is pertinent to mention that before the introduction of section 35DDA, the legal dictum is very clear that the assessee can claim the expenditure incurred on account payment made for the VRS which are in the nature of business expenditure and are deductible u/s.37. Therefore, till the introduction of new provisions under section 35 DDA, the assessee can claim such expenditure as revenue expenditure. This proposition is supported by various decisions of the Tribunal and High Courts. We direct the AO to allow the expenditure as revenue expenditure, eligible for deduction u/s 37(1) of the Act, after verification of the details of expenditure claimed by the assessee. Addition of estimated amount on account of valuation of closing stock of finished goods - Held that:- Tribunal in the assessee’s own case for the A.Y. 1994-95, 1995- 96, 1997-98 & 2003-04 has decided an identical and similar ground against the assessee. However, alternate claim for addition to the opening stock has been allowed by the Tribunal. Following the said orders of the Tribunal, we direct the AO to re-compute the value of closing stock in line with the principles laid down by the Tribunal in the said orders. Thus, we set aside this matter to the file of the AO for the limited purpose of following the guidelines given in the earlier years. Bringing to tax a sum as interest on Government Securities - Held that:- It is observed that similar additions have been confirmed by the Tribunal in the assessee’s own case for the A.Ys. 1991-92, 1993-94, 1994-95, 1995-96 & 1997-98. In the absence of any distinguishing facts brought by the parties, following the said orders of the Tribunal, the impugned addition confirmed by the Ld.CIT(A) is upheld. Inclusion in the income of the estimated import duty benefit - Held that:- For the A.Y. 1997-98 has decided a similar issue in favour of the assessee by following the decision of the Tribunal in the case of Jamshri Ranjitsinghji Spinning and Weaving Mills v. Inspecting Assistant Commissioner [ [1991 (12) TMI 83 - ITAT BOMBAY-A] wherein it has been held that the import entitlement receivable by the assessee do not constitute the income of the assessee in the year under appeal as neither the income accrued nor arisen during the year of accounting. Following the said order of the Tribunal dated 16.04.2008 for the A.Y. 1997-98 in the assessee’s own case, we direct the AO to exclude the import duty entitlement from the total income of the assessee for the year under appeal. Disallowance of a sum in computing the income from capital gains being professional fees paid in connection with the sale of shares - Held that:- It is pertinent to mention that the perusal of the records suggests that J.M. Financial and Investment Consultancy Services Ltd. helped the assessee company to identify British Gas Asia Pacific Holding Pvt. Ltd and the assessee has been in a position to bargain for the best price for the sale of the shares. It is further relevant to state that the payment has been legitimate and also the same has been incurred in connection with the sale of the shares which are not disputed. When the facts are being so, the authorities below are not justified in disallowing the claim of deduction. Therefore, we direct the AO to allow a sum as deduction in computing the income under the head ‘Capital Gains’ as claimed by the assessee. Deduction on account of repairs and maintenance in computing the income under the head ‘house property’ - Held that:- as per the provisions of sections 23 & 24 of the Act, income chargeable under the head ‘income from house property’ shall be computed after making the deductions of municipal taxes paid by the owner, a sum equal to thirty per cent of annual value and the amount of interest payable on borrowed capital where the property has been constructed, repaired, renewed or reconstructed with borrowed capital. Accordingly, an assessee is entitled only to the deductions in respect of the said expenditure in the computation of the income under the head of income. Therefore, it is not legally permissible to allow the deduction on account of maintenance charges incurred on lifts, liftman, sweeper, security etc under the head ‘income from house property’. Deduction as foreign exchange loss on the basis of foreign exchange rate at the end of the accounting year - Held that:- The assessee in all other earlier years kept on claiming the foreign exchange loss on goods traded as expenditure and the same has also been allowed in those years and thereby upheld the action of the AO in including the foreign exchange gain as taxable income. In view of the fact that the loss claimed in the earlier years has been allowed in those years, subsequently in the A.Y. 1999-2000 the gain also has been added to the total taxable income of the assessee as held by the CIT(A). Therefore, it is appropriate that the trading loss is to be allowed as a deduction while computing the income.
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