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2019 (12) TMI 1272 - AT - Income TaxNature of expenditure - Non-compete fee paid - deferred revenue expenditure as per CIT-A as against capital as held by the Assessing Officer - HELD THAT:- As fairly agreed by both the sides that the issue was now squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case in the Assessment Years 2003-04, 2005-06, 2006-07 & 2007-08 [2016 (6) TMI 1388 - ITAT CHENNAI] CIT(A) has not erred in holding that the non compete fees paid by the assessee is allowable as deferred revenue expenditure. We find no reason to interfere in the order of the learned CIT(A) on this issue. Consequently, Ground No.2.1 to 2.3 of the Revenue’s appeal stands dismissed. Disallowance made u/s.40A(9) in respect of the assessee’s contribution to the benevolent fund - HELD THAT:- As in the assessee’s own case [2016 (6) TMI 1388 - ITAT CHENNAI] held that the contention of the appellant that contribution made by it to the Benevolent Fund constituted under a memorandum of settlement u/s 18(1) of the Industrial Act is statutory in nature and hence covered by exception provided under section 40A(9) is acceptable. Accordingly, direct the AO to allow contribution made by the appellant to the Benevolent Fund. The appellant, therefore, succeeds on this ground - Ground Nos.3.1 and 3.2 of the Revenue’s appeals stands dismissed. Disallowance of provision of gratuity - an eligible deduction u/s.40A(7) or not? - HELD THAT:- As perused the orders passed by the learned Assessing Officer giving effect to the order of the Income Tax Appellate Tribunal for the earlier Assessment Years, wherein the Assessing Officer has allowed the assessee’s claim. This being so and also considering the fact that the learned CIT(A) has followed the judicial discipline in following the order of the Tribunal in the assessee’s own case referred to supra, we find no reason to interfere in the order of the learned CIT(A). Consequently, Ground Nos.4.1 and 4.2 of the Revenue’s appeals stands dismissed. Gratuity when computing the book profits u/s.115JB - HELD THAT:- As in the case of Greaves Chitram Ud Vs. DCIT [2006 (3) TMI 563 - ITAT MUMBAI] held that the gratuity liability, which was based on actuarial valuation, was deductible from the book profits as ascertained liability. As the facts and circumstances of the appellant are exactly similar to the case discussed above and as it has not been denied by the Assessing Officer that the provision for gratuity has been made on actuarial basis, hold that the Provision for Gratuity should not be added back to book profits. The appellant succeeds on this ground. Characterization of income - sale of carbon credits - revenue of capital receipts - HELD THAT:-Respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of Ambika Cotton Mills Limited [2014 (3) TMI 428 - ITAT CHENNAI] and the decision in the Sri Velayudhaswamy Spinning Mills (P) Limited [2015 (4) TMI 132 - ITAT CHENNAI] as also on account of the fact that the legislature has by intent providing for taxing of the receipts from the sale of carbon credits under a special provision of Section 115BBG w.e.f 01.04.2018 and as the appeals relate to the period before this date, the receipts arising to the assessee herein on the sale of carbon credits is held to be capital receipt. Consequently, the order of the learned CIT(A) and that of the learned Assessing Officer on this issue stands reversed. Additional depreciation claim in respect of the fixed assets acquired in the second half of the financial year 2010-11 relevant to the Assessment Year 2011-12 - HELD THAT:- CIT(A) has followed the judicial discipline in following the decision of the Hon’ble Jurisdictional High Court in the case of M/s. Brakes India Limited vs. The Deputy Commissioner of Income Tax, [2017 (4) TMI 511 - MADRAS HIGH COURT] when deciding identical issue for the Assessment Years 2013-14 and 2014-15, respectively following the decision of the Hon’ble Jurisdictional High Court in the case of M/s. Brakes India Limited vs. The Deputy Commissioner of Income Tax, Chennai referred to supra, the Assessing Officer is directed to grant the assessee additional depreciation on the plant and machinery installed in the second half of the financial year preceding the Assessment Year 2012-13 - Decided in favour of assessee.
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