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2018 (6) TMI 224 - AT - Income TaxNature of expense - capital or revenue - installation expenses - Held that:- As per the observations of CIT(A) the addition made by the AO is pure guess as is evident from the following “company may have booked these expenses on revenue account under the head “Repairs of P&M” - thus an addition made on pure guess cannot be sustained - hence we upheld the findings of CIT(A) and dismiss the ground of appeal of Revenue. Expenditure incurred on social overheads - revenue or capital - Held that:- CIT(A) correctly observed that no defect in the maintenance of books of accounts have been pointed - Assessing Officer has not established whether the system of accounting followed by the appellant was not as per AS-2 or was not consistently followed. No evidence has been brought on record by the Ld. Assessing Officer to show that the stock was that of ‘E’ grade coal and not ‘G’ grade coal. The Ld. Assessing Officer has presumed that all the stock at Gidi washery was ‘E’ grade coal without considering the evidence brought on record by the appellant. - Decided in favour of assessee Expenses under the head Donation in the nature of sports promotion expenses and community development expenses - allowable as business expenditure - Held that:- the appellant has not been able to bring out any evidence to show as to how were these expenses ‘wholly and exclusively laid out for the purpose of business’ - thus this ground of appeal of the assessee is dismissed. Disallowance on account of arrear of salary - AO disallowed the same on the ground that the same was not an ascertained and had not crystallised during the year - Held that:- We find that this issue has been decided in favour of the assessee by this bench of the Tribunal in assessee’s own case for the assessment year 2004-05 wherin held AO has taken the view that the claim of the assessee falls in the category of unascertained liability, which in our view, is not correct. In the instant case, there is certainty about the liability, but the exact quantification could be known to the assessee in the future upon finalisation of the wage agreement. We find support for this view from the decision rendered by the Mumbai bench of Tribunal in the case of TATA communications Ltd Vs. JCIT [2013 (2) TMI 506 - ITAT MUMBAI] Disallowance on account of transfer of free issue of coal - AO observed that expenses claimed by the assessee is to be gratuitous in nature and therefore, not wholly and exclusively laid out for the purpose of business and disallowed the same - Held that:- We perused the documents placed before us and are of the considered opinion that the matter needs verification and examination by the CIT(A) and accordingly we remit this issue to the file of CIT(A) who shall verify and examine the documents and pass order after providing adequate opportunity of hearing to the assessee.
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