Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 1592 - AT - Income TaxDisallowance of provisions made on account of leave encashment under section 43B - HELD THAT:- Undisputedly, the deduction claimed by the assessee is only a provisions and no payment was actually made by the assessee during the relevant previous year. Therefore, in terms of section 43B(f), it is not allowable. However, in the case of Exide Industries Ltd. [2007 (6) TMI 175 - CALCUTTA HIGH COURT], the Hon’ble Calcutta High Court had struck down the provisions of section 43B(f) as unconstitutional. However, the Department being aggrieved of the said judgment had preferred appeal before the Hon'ble Supreme Court and the Hon'ble Supreme Court while admitting the appeal of the Department in Special Leave to Appeal (Civil) [2009 (5) TMI 894 - SC ORDER] had directed the assessee to pay tax as if section 43B(f) is in the statute book, however, the assessee permitted to claim the deduction in the return of income. We restore the matter back to the file of the Assessing Officer with a direction that assessee will pay the tax as if section 43B(f) is on the statute book. However, till the decision of the Hon'ble Supreme Court is rendered in case of CIT v/s Exide Industries Ltd. (supra), the Department will not recover the penalty and interest which may accrue till the decision of the appeal in the case of Exide Industries Ltd. (supra). It would be open to the Department to recover the outstanding interest payment once the appeal in the case of Exide Industries Ltd. (supra) is decided in favour of the Department. Ground no.1, is allowed for statistical purposes. Disallowance of revenue sharing - HELD THAT:- As found from the record that this is recurring dispute between the assessee and the Department right from the assessment year 2000–01. However, in a series of decisions in assessee’s own case, the Tribunal has decided the issue in favour of the assessee holding that the amount paid to DOT towards revenue sharing license fee as revenue expenditure. There being no material difference in facts and no contrary decision has been brought to our notice by the learned Departmental Representative, respectfully following the consistent view of the Tribunal in assessee’s own case we allow assessee’s claim of deduction on account of revenue sharing license fee Depreciation claim on revenue sharing license fee - Since we have allowed assessee’s claim of deduction in respect of revenue sharing license fee by holding it as revenue expenditure, this ground raised by the Department has become infructuous. Disallowance of interest expenditure towards interest free loan given to the subsidiary - HELD THAT:- As relying on assessee own case [2015 (4) TMI 92 - ITAT MUMBAI] there was direct commercial expediency in advancing funds to subsidiaries have not been controverted by the Revenue by bringing any positive material on record. We therefore do not find any reason to interfere with the order of ld. CIT(A) deleting the disallowance of interest attributable to funds advanced to subsidiaries. - Decided against revenue. Deduction towards club fee - Allowable revenue expenses or not? - HELD THAT:- On a perusal of the order of the Tribunal for the assessment year 2004–05 and 2005–06held that expenditure was incurred was revenue in nature as held by the Hon’ble High Court, we do not find any infirmity in the order of ld. CIT(A) deleting the disallowance of Club fees paid by the assessee company. Proportionate deduction claimed u/s 35DD on legal fee - HELD THAT:- As is evident, in the impugned assessment year the assessee had not claimed the expenditure in the return of income. He put forward his claim for deduction under section 35DD only at the stage of first appellate proceedings, that too, by raising an additional ground and the learned Commissioner (Appeals) dismissed the ground of the assessee for the reason that the issue was not examined by the Assessing Officer. Therefore, on over all consideration of facts and material on record, we are inclined to restore this issue to the file of the Assessing Officer for deciding afresh after providing due opportunity of being heard to the assessee. Ground no.2, is allowed for statistical purposes. Depreciation on revenue sharing license fee carried over by BTA Cellular Ltd. in continuation of amalgamation with the assessee - HELD THAT:- Commissioner (Appeals) having found that neither BTA nor the assessee have claimed deduction under section 35ABB directed the Assessing Officer to verify the fact and allow assessee’s claim of depreciation. We do not find any infirmity in the aforesaid direction of the learned Commissioner (Appeals). As already held by us, revenue sharing license fee paid to DOT is otherwise allowable as revenue expenditure. Since the BTA was claiming depreciation on revenue sharing license fee after treating it as intangible asset after capitalization the assessee continued with the same accounting principle after merger of BTA insofar as revenue sharing business fee paid by BTA which was acquired as a part of block of asset. In the aforesaid facts and circumstances, assessee’s claim of deduction being legally valid has to be allowed. Therefore, we uphold the order of the learned Commissioner (Appeals) on the issue by dismissing ground no.2, raised by the Department.
|