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2016 (9) TMI 404 - AT - Income TaxDisallowance of previous years’ expenditure - Held that:- As decided in assessee’s own case for assessment year 2006-07 wherein held both the lower authorities have wrongly disallowed assessee's claim or prior period expenditure. The same stands deleted. Disallowance for the alleged excessive shortage in the Sesame seeds account - Held that:- We find that the assessee has closed the business of trading in Sessame seeds during the year under consideration and accordingly wrote off the entire stock which was not saleable as per the standards prescribed by the Government authorities and the same has been destroyed. In our considered opinion, this is a loss and not shortage though claimed as a shortage. The total quantity wrote off was 5940 MT on a total value of ₹ 29.48 crores which comes to 0.86% only. The only reason for upholding the disallowance given by the First Appellate Authority is that the assessee has failed to quantify the shortage/loss due to substandards material. There may be some force in the findings of the First Appellate Authority. Considering the smallness of the overall percentage which is 0.86%, the balance of convenience is tilted in favour of the assessee. We, accordingly, set aside the findings of the ld. CIT(A) and direct the A.O. to delete the disallowance Profit on sale of DEPB license for computation u/s. 80HHC - Held that:- As decided in Topman Exports [2012 (2) TMI 100 - SUPREME COURT OF INDIA] DEPB has direct nexus with the cost of imports for manufacturing an export product, any amount realized by the assessees over and above the DEPB on transfer of the DEPB would represent profit on the transfer of DEPB and while the face value of the DEPB will fall under clause (iiib) of Section 28, difference between the sale value and the face value of the DEPB will fall under clause (iiid) of Section 28 – Decided in favor of assessee. Taking net interest as part of indirect cost for the purpose of computation of deduction - Held that:- As decided in ACG Associated Capsules Pvt. Ltd [2012 (2) TMI 101 - SUPREME COURT OF INDIA] Ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads ‘PGBP’ is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. – Decided in favor of assessee Deduction u/s. 80HHC to the extent of gross total income without restricting the total income derived from export of goods - Held that:- We are of the considered view that the income of the assessee is to be computed as per provisions of the law and simply because an assessee has suffered more amount on tax than what is legally due, then the Department can not assess the income at a higher figure but should assess the income at correct amount as per the provisions of law. We, therefore, do not find any merit in this ground of appeal of the Revenue – Decided in favor of assessee
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