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2019 (3) TMI 2010 - AT - Income TaxLoss as incurred by the company because of fire - Loss of raw materials in fire which was rejected - HELD THAT:- As allowed by the AO. The balance amount of R.4,24,29,060/- was not allowed. It is brought on record that the assessee had received insurance claim to the extent of that amount and offered to tax during A.Y. 2008-09. The claim of the balance loss of Rs.4,24,29,060/- for the assessment year 2006-07 was not allowed by the AO on the reason that the assessee had not claimed it in the revised return. The same was allowed by the CIT(A) as the assessee had offered the receipt of insurance claim during the subsequent year, i.e., 2008-09. Being so, it is revenue neutral. We find no infirmity in the order of the CIT(A) in allowing the claim of loss of the assessee, though there was no revised return of income filed by the assessee. Thus, this ground of appeal of the Revenue is dismissed. Disallowance of claim of deduction made on the profits of gas turbine boiler - HELD THAT:- We find that this issue is covered in favour of the assessee by the decision in the case of West Coast Paper Mills Ltd. [2014 (7) TMI 554 - ITAT MUMBAI] wherein it was held that deduction u/s. 80IA is allowable in respect of captive power consumption units and generation of steam amounts to generation of power for the purpose of deduction u/s. 80IA. We do not find any infirmity in the order of the CIT(A) and confirm the same. Accordingly, this ground of appeal of the Revenue is dismissed. Disallowance of amount being club expenses - HELD THAT:- The observation made by the CIT(A) is justified. AO had given only two days to produce the requisite vouchers and bills. The assessee has also not produced any documents. More so, there was no disallowance in the subsequent year on this count. Considering the totality of the facts and circumstances of the case, the CIT(A) disallowed Rs. 20 lakhs and balance Rs.30,09,299/- was deleted. Hence, we do not find any infirmity in the order of the CIT(A) and confirm the same. This ground of appeal of the Revenue is dismissed. Disallowance of claim of reduction u/s. 35(2AB) - As found that the DSIR approval was not there for 2006-07 - HELD THAT:- As rightly observed by the CIT(A), the assessee was not granted DSIR approval for the assessment year 2006-07. Hence, there is no question of granting reduction u/s. 35(2AB) - Hence, this ground of appeal of the assessee is dismissed. Disallowance u/s. 35(2AB) - expenditure incurred by it for its in-house R&D facility - HELD THAT:- Allowability of expenditure u/s. 37(1), we are of the opinion that this issue was already settled in the case of Brooke Bond India Ltd [1997 (2) TMI 11 - SUPREME COURT] wherein it was held that expenditure incurred by a company in connection with issue of shares, with a view to increase its share capital, is directly related to the expansion of the capital base of the company, and is capital expenditure, even though it may incidentally help in the business of the company and in the profit making. Being so, we are inclined to reverse the finding of the CIT(A) on this issue. Accordingly, we allow the ground taken by the Revenue. Allowability of expenditure u/s. 35D - assessee claimed expenditure on issue of shares and incurred on ROC fees and submitted that it should be allowed u/s. 35D - HELD THAT:- This issue was raised for the first time before us. The Assessing Officer had no occasion to examine the same. Hence, we remit this issue to the file of the AO for fresh consideration and decide the issue in accordance with law after giving reasonable opportunity of hearing to the assessee. The additional ground raised by the assessee is allowed for statistical purposes. Disallowance of claim of deduction made on the profits of gas turbine boiler - HELD THAT:- As discussed earlier the assessee is entitled to deduction u/s. 80IA on captive power consumption units and generation of steam amounts to generation of power for the purpose of deduction u/s. 80IA. We do not find any infirmity in the order of the CIT(A) and confirm the same. Accordingly, this ground of appeal of the Revenue is dismissed. Final order without passing the draft assessment order u/s. 144C - HELD THAT:- As when the final assessment order is passed without passing the draft assessment order, it is illegal and without jurisdiction. Accordingly, we quash the assessment orders for both the assessment years.
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