Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 256 - AT - Income TaxAdditional depreciation u/s 32(1) (iia) on items of electric installation, tools, dyes and moulds - Held that:- The finding of the ld Assessing Officer that they are not installed is a contradictory statement as normal depreciation of such assets is already allowed. The normal depreciation is allowable when the assets are put to use, we failed to understand that while allowing the normal depreciation the assets have been accepted as being used and in allowing additional depreciation it is stated that they are not installed. Further, the plant itself exists for the manufacturing of the products and the items purchased by the assessee are also not falling in the negative list such as office equipments etc. we are of the view that the claim of the assessee of additional depreciation is in accordance with the law. Hence, we confirm the order of the ld CIT (A) in allowing the additional depreciation on electrical installation, tools, dies and moulds. Disallowance of wages payment - revenue or capital expenditure - Held that:- CIT (A) correctly deleted the disallowance relying on the order of the ld CIT (A) for AY 2009-10 wherein held that the payment was made for supplying the unskilled and semiskilled labour, which was used for lodging, un-lodging, cleaning of factory and in production process of the appellant. Hence, the amount has to be allowed as revenue expenditure to the appellant and same cannot be capitalized Allowance of deduction on account of order processing charges - Held that:- According to schedule-XV if the audited account of the assessee a sum of ₹ 281827/- was received on account of processing charges. There is no dispute on the amount of total turnover as well as the export turnover. However the only dispute is with respect to profit eligible for deduction shall include the processing charges of ₹ 281827/- or not. According to the provisions of section 10B (4) the profit derived from export of goods is amount which bears to the profit of the business of the undertaking in the same proportion as the export turnover bears to the total turnover. Therefore if the amount of processing charges is the business income of the assessee same is eligible for deduction in ratio of export turnover to total turnover. As ld Assessing Officer himself has taxed the processing charges under the head business income of the assessee the amount of deduction is allowable to the assessee Allowability of insurance claim and discount from suppliers - Held that:- As there is no dispute on the export turnover and total turnover amounts and when both these receipts are taxed with business income the ld CIT (A) has correctly allowed deduction on these two sums u/s 10B of the Act. Disallowance of Swap Charges and Loan processing charges - Held that:- . The brief facts are that earlier the assessee took loan from Oriental Bank of Commerce against foreign currency (FCNRB), which was later on converted into Rupee loan and for this transaction the assessee has incurred financial charges which are in the nature of interest expenditure which are in the nature of interest in view of the provision of section 2(28A) of the Income Tax Act. Such expenditure is allowable in terms of section 36(1) (iii) of the Income Tax Act. It is not the case of the revenue that the assets for which the loan was taken is not put to use. In view of this we find no infirmity in the order of the ld CIT (A) in allowing swapping charges holding them as revenue expenditure and allowing the claim of the assessee. Regarding the loan processing charges it is from shifting of loan from Oriental Bank of Commerce to Axis Bank. This is also allowable to assessee as revenue expenditure as it is an interest and allowability of the same is to be considered u/s 36(1) (iii) of the Act. For the similar reasons as we have explain for swapping charges we also confirmed the order of the ld CIT(A) in deleting the above disallowance. Revenue appeal dismissed.
|