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2018 (9) TMI 1858 - AT - Income TaxReplacement of old machineries with new one - nature of expenditure - revenue or capital expenditure - HELD THAT:- Appeal allowed in favour of assessee as relying on assessee own case [2018 (5) TMI 1902 - ITAT SURAT] replacement of old machine with any new one will not constitute bringing into existence of new asset of enduring benefit to the assessee. Reliance placed in the case of Sri Mangayarkasi Mills (P) Ltd [2009 (7) TMI 17 - SUPREME COURT] by Revenue is not applicable, as in that case replacement of old machinery with new machinery was treated as capital expenditure, whereas, in the instant case, there is replacement of damaged part of Turbine and machinery, hence, facts are distinguishable. Therefore, the appeal of the revenue dismissed. Carbon credit income - taxability as capital receipt - HELD THAT:- We find that the ITAT has held in A.Y. 2009-10 [2018 (5) TMI 1902 - ITAT SURAT] in the case of the assessee that carbon credit is capital receipts not taxable to tax, hence, written off by the assessee of the same in A.Y. under consideration on the ground of receivable written off is not legally tenable, hence, the findings of CIT (A) is upheld. This grounds of appeal is therefore, dismissed. Disallowance of expenditure incurred towards Corporate Social Responsibility (CSR) - allowable revenue expenses - HELD THAT:- Identical issue has come up before the tribunal in assessment year 2009-10 as held the expenditure has been incurred on account of various relief materials like food items, kerosene, blankets etc. to the flood affected people of Bihar. Therefore, this expenditure has been incurred on behest of the State Government of Gujarat as the assessee is a public undertaking of Gujarat Government. The assessee is conscious of its corporate social responsibility and makes contributions in the ordinary course of its business towards socially useful activities and in view of very nature the expenditure incurred for corporate social responsibility is allowable as business expenditure as it was incurred for making the image of the company and towards its social responsibility reliance placed on the decision in the case of Shri Venkata Satyanarayana Rice Mills Contractors Co. vs. CIT [1996 (10) TMI 2 - SUPREME COURT] wherein contribution to the public welfare fund at the instance of the Government Authorities was allowed as the deduction on the ground that it was motivated by commercial contribution - Appeal of the Revenue is dismissed. TDS u/s 194H - non deduction of tds on discount given to the dealers - HELD THAT:- Identical issue has come up before the tribunal in assessment year 2009-10 not possible to accept the contention of the revenue that the definition of ‘commission or brokerage’ as contained in Explanation to section 194H is so wide that it would include any payment receivable, directly or indirectly, for services in the course of buying or selling of goods and that, therefore, the discount availed of by the stamp ve,ndors constitutes commission or brokerage within the meaning of section 194H. Appeal of the Revenue is dismissed. Accrual of income - Addition on account of Insurance Claim Lodged - whether assessee follows mercantile system of accounting A.O. has correctly added insurance claim lodged by the assessee on accrual basis? - HELD THAT:- This amount was accordingly offered to tax for the A.Y. 2013-14. This shows that actual receipt is far less than claim, hence accrual amount is not certain. Therefore, the mere lodging claim with insurance company does not result in accrual of income to the assessee unless it is settled by the insurance company. CIT(A) has held that mere lodging of insurance claim on the basis of surveyors assessment does not result into accrual of income of the assessee. There is a change of accounting policy in respect of insurance claim by the assessee but there is no change in method of accounting employed by the assessee. We are in agreement with the findings recorded by the CIT(A), accordingly same is upheld, this ground of Revenue is therefore dismissed which is also supported by the case laws relied by the assessee as mentioned above. - Decided against revenue.
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