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2016 (7) TMI 1052 - AT - Income TaxTaxability of interest subsidy received - Held that:- Keeping in view the objects of the West Bengal Incentive Scheme 2000 and various judicial precedents relied upon we hold that the interest subsidy is to be treated as capital receipt. Consequentially the assessee need not reduce the same from the cost of the asset for the purpose of claiming depreciation. Disallowance made towards lease rental payment - CIT(A) deleted the addition - Held that:- In the facts and circumstances of the case, we find that the ld CITA had rightly appreciated the alternative argument of the assessee that the lease rentals (net of interest element) would have to be allowed as deduction. We find no infirmity in the order of the ld CITA in this regard. - Decided against revenue Disallowance made towards credit card expenses - CIT(A) deleted the addition - Held that:- The materials available on record including the paper book filed by the assessee in this regard containing the sample copies of credit card bills and invoices vide pages 26 to 43 of paper book together with the complete details of expenses incurred thereon. From the perusal of the said details and the various arguments advanced by the ld AR, we are convinced that the said expenditures were incurred wholly and exclusively for the purpose of business of the assessee as they are related to staff training expenses, continuing education programme expenses, expenses on technoforecast (international journals) and recruitment expenses - Decided against revenue Disallowance made on account of foreign currency loss - CIT(A) deleted the addition - Held that:- We find that the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of Woodward Governor of India P Ltd vs CIT reported in (2009 (4) TMI 4 - SUPREME COURT ) in favour of the assessee. The revenue was not able to bring any contrary decision in this regard. Disallowance made on account of software expenses - CIT(A) deleted the addition - Held that:- We find that the ld CIT-A had given categorical findings with regard to each and every disallowance made by the ld AO. We also find from the evidences filed in the paper book, the expenditure incurred are only towards licence fees paid on an annual basis / quarterly basis for specific usage of the software for a certain period of time. Hence we find lot of force in the argument of the ld AR that there is no enduring benefit derived by the assessee in the capital field warranting capitalization of the said expenditure. - Decided against revenue Disallowance of bad debts - CIT(A) deleted the addition - Held that:- We find that the revenue had not disputed the fact that the debts were offered to tax as income in the earlier years and some portion of the same debts were treated as irrecoverable and were written off in the books of accounts of the assessee. We find that the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of TRF Ltd [2010 (2) TMI 211 - SUPREME COURT ] wherein it was held that post 1.4.1989, the assessee is not required to establish that the debt had indeed become bad and deduction shall be granted on write off of the same subject to fulfillment of condition prescribed in section 36(2) of the Act. - Decided against revenue Disallowance on account of write off of service tax - Held that:- We find that the assessee had not even claimed the write off of service tax in its books of accounts by way of charge to profit and loss account. We find that the ld AO had merely made this addition without understanding the accounting treatment of the assessee vis a vis its income tax return. We find that there is no basis for the ld AO for making this addition as the profit and loss account is not at all hit by the said write off of service tax portion. Hence we hold that the ld CITA had rightly deleted the addition.- Decided against revenue Disallowance on account of recruitment expenses - Held that:- We are in complete agreement with the ld AR that no enduring benefit is obtained by the assessee pursuant to incurrence of recruitment expenses paid to recruitment agency for appointing two members for the senior position in the assessee company. The recruitment is an on-going process and does not bring into existence any capital asset. Under these facts and circumstances we do not find any reason to interfere with the order of the ld CITA in this regard in deleting the addition - Decided against revenue.
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