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2020 (9) TMI 30 - AT - Income TaxPeriphery development expenses - As per AO these expenses were not bonafide business expenses therefore was added back to the total income of the assessee - HELD THAT:- Periphery Development Expenses are for the purposes of welfare of the peoples residing nearby mining activities and it is responsibility of the company which was carrying out the business of mining and it is mandatory for the mining industry to look after the development of the area in which the mines are operating.These expenses were wholly and exclusively for the business purpose. - Decided in favour of assessee. Addition on account of Exchange Rate Fluctuation - AO was of the view that the assessee company had not exported any raw materials to overseas country in which the exchange loss had accrued - HELD THAT:- We note that the exchange loss was incurred on account of purchase of spare parts of the Aircraft and the same had been capitalized during the relevant year. The assessee owned an Aircraft on which expenses were incurred every year to its maintenance and such expenses were revenue in nature and any loss incurred from such activity is also revenue in nature. As per policy of DGCA, certain internal spare parts of Aircraft are to be replaced. The exchange loss which arose on account of purchase of spare parts was capitalized and exchange loss arose on account of undertaking regular maintenance hence it is a revenue expenses. - Decided in favour of assessee. Disallowance of depreciation - AO was of the view that the assessee has not followed extraction of Iron Ore during the relevant year and had no activity of mining during the relevant year and was engaged only lifting of closing stock during the year - HELD THAT:- Mining company was a running company. It had stopped production for the time being in order to cater to the decision of the Hon’ble Supreme Court. Importantly, when an asset is procured, it goes into the block of assets. The only aspect is the use. If an asset goes into the block of assets, the same goes into depreciation. There is no doubt that the assessee was also the owner of the machinery. The decision of the Calcutta High Court in CIT vs. Norplex Oak India [2011 (3) TMI 620 - CALCUTTA HIGH COURT] clearly decides the case in favour of the assessee. Delayed employees contribution to PF - AO examined the tax audit report and noticed that employee’s contribution to PF was deposited to the respective accounts beyond the grace period of 5 days - HELD THAT:- Contribution towards PF was made by the assessee before the due date of filing Return of Income and before 31st March, 2008.We note that Hon’ble Jurisdictional High Court of Calcutta in the case of CIT -vs.- Vijay Shree Limited [2011 (9) TMI 30 - CALCUTTA HIGH COURT] has held that if the PF contribution is made by the assessee before the due date of filing Return of Income then it would be sufficient compliance and no addition should be made. Suppression of sale - As per Balance Sheet and Tax Audit Report the assessee had shown shortage or wastage of 7863 M. T. Iron ore, while as per H-1 Form there was no entry of wastage or shortage of Iron Ore - HELD THAT:- Assessee stated that the difference was basically due to reconciliation of opening balance as shown in the Balance Sheet and Form H1. The latter is prepared in the month of May and stock taken in H1 is on the basis of volumetric analysis. We note that ld CIT(A) examined the reconciliation statement submitted by the assessee during the appellate proceedings and he found it correct.That being so, we decline to interfere in the order passed by the ld. CIT(A), his order on this issue, is hereby upheld and the ground no. 2 raised by the revenue is dismissed.
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