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2017 (11) TMI 1841 - AT - Income TaxDeduction u/s 80HHC - Allowability of deduction on certain receipts of Scrap sale - HELD THAT:- As decided in PUNJAB STAINLESS STEEL INDUSTRIES [2014 (5) TMI 238 - SUPREME COURT] we are of the view that the view expressed by the High Court is in conformity with the normal accounting practice followed by the traders, including the respondent-assessee and it was justified in coming to a conclusion that the sale of scrap would not be included in the ‘total turnover’. We find it relevant to direct the AO to apply the said legal proposition of the Apex Court in the case of Punjab Stainless Steel Industries (supra) after examining the facts of the present case. Accordingly, this part of the ground No.2 is allowed for statistical purposes. Disallowance on account of Aircraft expenditure - HELD THAT:- This is an issue coming up for adjudication almost every assessment year in this case. AO’s disallowed 15% of the claim debited to the Profit and Loss Account consistently towards the personal use of the Aircraft by the Director and their family members. The issue came up for adjudication by the Tribunal in earlier years. The issue was decided against the assessee in all the years. On hearing both the sides and considering the fair admission of the issue by assessee, we are of the opinion, this ground for this year also has to be decided against the assessee. Accordingly, the ground No.3 is dismissed, and the same is in favour of the Revenue. Disallowance u/s 14A - HELD THAT:- We are of the opinion, that it is now binding on our Benches that the disallowance in this case should be restricted to 2% of the exempt income. Therefore, we find it relevant to give a direction to the AO to follow the cited decision in the case of Godrej Agrovet Ltd [2014 (8) TMI 457 - BOMBAY HIGH COURT] after examining peculiar facts of the present case. With these directions, we remand this issue to the file of the CIT(A) for fresh adjudication on this issue. Accordingly, the grounds raised by the revenue are allowed for statistical purposes. Provision for warranty - HELD THAT:- We find similar issue was raised by the revenue for adjudication before us for the A.Y 2005-06 vide ground No.5 of that appeal with identical directions, we remand this issue also to the file of the CIT(A) for fresh decision in the light of Apex Court judgment in the case Rotork Controls India Private Ltd. [2009 (5) TMI 16 - SUPREME COURT] which is relevant for the legal proposition that the estimated provision is allowable when the excess provisions is returned back as an income of the assessee in the later year. We remanded this issue as discussed in the preceding paragraphs above for the file of CIT(A). With identical directions, we remand this issue to the file of the CIT(A). CIT(A) is directed to grant reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice. Accordingly, this issue is allowed for statistical purposes.
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