1994 (7) TMI 123 - AT - Income Tax

Issues Involved:
1. General ground of appeal.
2. Disallowance under Section 43B.
3. Disallowance on account of gifts and presents to foreign collaborators.
4. Disallowance under Rule 6D of the IT Rules, 1962.
5. Disallowance on account of bonus paid.
6. Disallowance on account of repairs of generator.
7. Disallowance of deduction under Section 80G.
8. Disallowance of additional depreciation.
9. Deduction under Section 35AB.
10. Levy of interest under Section 216.

Issue-wise Detailed Analysis:

1. General Ground of Appeal:
The first ground of appeal was general in nature and no arguments were advanced. Consequently, this ground was dismissed.

2. Disallowance under Section 43B:
The second ground of appeal related to the disallowance of Rs. 1,05,525 and Rs. 2,12,189 under Section 43B. This ground was dismissed as not pressed.

3. Disallowance on Account of Gifts and Presents to Foreign Collaborators:
The third ground of appeal concerned the disallowance of Rs. 18,178 on account of gifts and presents to foreign collaborators. The Tribunal had previously decided a similar issue in favor of the assessee for the assessment year 1982-83. For consistency, the Tribunal followed its earlier decision and deleted the addition of Rs. 18,178.

4. Disallowance under Rule 6D of the IT Rules, 1962:
Ground No. 4(a) and (b) related to the disallowance of Rs. 12,429 under Rule 6D of the IT Rules, 1962. This ground was dismissed as not pressed.

5. Disallowance on Account of Bonus Paid:
The fifth ground of appeal involved the disallowance of Rs. 85,361 on account of bonus paid pursuant to an ordinance issued during the relevant previous year. The claim was dismissed for want of evidence. The CIT(A) confirmed the disallowance due to the non-filing of the ordinance copy and payment details before the Assessing Officer. The Tribunal noted that the Payment of Bonus (Second Amendment) Ordinance, 1985, applied to the relevant year, increasing the liability. The issue was remitted to the Assessing Officer for verification and allowance of the deduction.

6. Disallowance on Account of Repairs of Generator:
The next ground of appeal concerned the disallowance of Rs. 6,127 on account of generator repairs. The amount was disallowed on the assumption that it was for installation, not repairs. The Tribunal, upon examining the evidence, was satisfied that the expenditure was for maintenance and not capital expenditure, and thus deleted the addition.

7. Disallowance of Deduction under Section 80G:
The appeal also involved the disallowance of a deduction under Section 80G for Rs. 1 lakh paid to Escorts Cardiac Disease Hospital Society. The claim was disallowed as the payment was considered a membership fee, not a donation. The Tribunal upheld the disallowance, stating that Section 80G deductions are permissible only on donations, and no donation was made.

8. Disallowance of Additional Depreciation:
The assessee was denied additional depreciation on machinery because a voltage stabilizer, necessary for running the machinery, was purchased after the specified date of 31st March, 1985. The Tribunal held that the crucial factor was the installation of the machinery before 1st April, 1985, and the mere purchase of a voltage stabilizer later did not affect this condition. The Tribunal directed the Assessing Officer to allow the additional depreciation.

9. Deduction under Section 35AB:
The ninth ground of appeal related to the deduction under Section 35AB of Rs. 1,26,944, being 1/6th of Rs. 7,61,666. The claim was denied as the sum was not paid during the relevant previous year. The Tribunal clarified that Section 35AB, effective from 1st April, 1986, applies to payments made in the previous year. Since the payment was made in earlier years, no deduction under Section 35AB was permissible. The Tribunal upheld the CIT(A)'s decision.

10. Levy of Interest under Section 216:
The last ground of appeal concerned the levy of interest under Section 216. This ground was dismissed as not pressed.

Conclusion:
The appeal of the assessee was partly allowed, with specific directions for verification and allowance of certain claims, while other grounds were dismissed.

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