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Income Tax - Case Laws
Showing 41 to 60 of 641 Records
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2014 (12) TMI 1338 - ITAT DELHI
Penalty u/s 271(1)(c) - inaccurate particulars or concealment of income - HELD THAT:- We find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. On the facts and circumstances of this case the assessee’s conduct cannot be said to be contumacious so as to warrant levy of penalty. - See Case of COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under s. 271(1)(c). - Decided in favour of assessee.
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2014 (12) TMI 1336 - ITAT MUMBAI
Levying penalty u/s 271B - reasonable cause which existed in not getting the accounts audited as provided u/s 44AB - failure to get account audited - Held that:- In the perspective of “reasonable cause” still it can be said that the assessee, under the facts available on record was under a “reasonable belief” that since in the case of a commission agent the assessee has received only commission charges, consequently, other reimbursable expenses are not to be includable as income of the assessee thus from this angle also the assessee was under a bona-fide belief that he is not to get his account audited since the income was below prescribed monetary limit. Thus, there was a reasonable cause in not getting the accounts audited, so from this angle also the penalty is not imposable. In view of these facts, the appeal of the assessee is allowed.
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2014 (12) TMI 1335 - KARNATAKA HIGH COURT
Reopening of assessment - proceedings reopened after a period of 4 years - grant of benefit u/s 80(O) - Held that:- Accepting the said stand, the assessment was made and benefit under Section 80(O) was granted. With the change of the assessing authority, that too, after taking note of the assessment orders passed subsequent to the said order for the subsequent years, the assessment is sought to be reopened after a period of years. Four years is the period of limitation prescribed for the re-opening of the assessment in the sense, an assessment cannot be reopened unless the case falls within one of the exceptions mentioned in the first proviso.
If an assessment is to be reopened, the assessing authority has reasons to believe that any income chargeable to tax has escaped assessment, it is settled law that change of opinion cannot constitute a ground such as reason to believe for reopening the assessment and that is precisely what the appellate authorities have held.
If an assessment is to be reopened after four years, then the conditions stipulated in the proviso is to be fulfilled. In the instant case, the support is sought from the last ground i.e., failure to disclose fully and truly all material facts necessary for his assessment. However, there is no whisper in this regard. It is in those circumstances, both the authorities on proper appreciation of the entire material on record have concurrently held that case would not fall under Section 147 - Decided in favour of the assessee.
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2014 (12) TMI 1334 - ITAT MUMBAI
Rejection of application of registration of trust - as there is no winding up clause hence “the application cannot be said to have constituted a valid public charitable trust” - Held that:-Admittedly, as per the provisions of section 12AA(1)(b) of the Act, the authority concern is expected to satisfy himself about the objects of the trust of institution and the genuineness of its activities, but at the same time, such satisfaction is objective in nature.
DIT(E) while rejecting the application of the assessee has nowhere mentioned that he was not satisfied with the objects of the trust or genuineness of its activities. DIT(E) has merely perused the audited accounts of the assessee and receipt of donation of ₹ 6 lakh out of which ₹ 3,50,000/- were incurred for educational activities including expenses on printing and stationary, salary, uniform expenses and welfare activities. So far as, scope of powers of the ld. Commissioner/DIT(E) for the purposes of section 12AA of the Act are concerned, the Authority have to satisfy about the genuineness of its activities of the trust or institution. The objects of the trust are available at pages 11 onwards of the paper book (internal pages 5 onwards of the trust deed).
So long, the trust has the objects of charitable nature, in our view, the registration should not be denied. So far as, application of funds and as to whether the assessee can claim benefit of exemption in terms of section 11 and 12 are concerned, these has to be examined by the Assessing Officer at the stage when situation so arises. The assessee vide letter dated 21/11/212 clarified that for winding up of charitable trust section 55 of the Bombay Public Trust Act, 1950 will come into play. The totality of facts clearly indicates that it is a fit case where registration should have been granted by the ld DIT(E). However, we are making it clear that, if at any stage, the assessee trust is found violating the objects of charity or misusing the funds for non charitable purposes/commercial purposes, the Department shall be at liberty to take appropriate action in accordance with law - decided in favour of assessee.
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2014 (12) TMI 1333 - DELHI HIGH COURT
Frame the following substantial question of law:-
“Whether the Income Tax Appellate Tribunal was right in holding that the assessee is not entitled to additional depreciation of @15% or 20% under Section 32(1)(iia) of the Income Tax Act, 1961 as it existed prior to 31st March, 2006 or after 1st April, 2006 because the machinery was acquired before 31st March, 2006 but was installed after 1st April, 2006?”
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2014 (12) TMI 1331 - GUJARAT HIGH COURT
Entitlement for deduction u/s 80IA - “basic telephone services” provider - whether assessee who are franchisees of BSNL and who have been permitted to install, maintain and operate in-dialling PABX under franchisee to support the department, can be treated to have provided “basic telephone services” entitling them for deduction u/s 80IA? - Held that:- As decided in assessee's own case for the assessment year 1998-99 the assessee have made huge investment in setting up and maintaining the entire PABX. In view of the agreement between the parties which has been minutely considered by this Court, the services provided by the assessee shall fall within the definition of ‘basic telephone service’ and therefore they shall be entitled to deduction u/s 80IA. The Tribunal has not committed any error in reversing the orders passed by the AO. The Tribunal had examined all the aspects of the case and concluded that the assessee were providing basic telecommunication service and were entitled to deduction under section 80IA(4)(ii).
Tribunal is right in law and on facts in holding that the assessee who are franchisees of BSNL and who have been permitted to install, maintain and operate in-dialling PABX under franchisee to support the department, can be treated to have provided “basic telephone services” entitling them for deduction u/s 80IA - Decided in favour of assessee.
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2014 (12) TMI 1328 - ITAT MUMBAI
TDS u/s 194J - amount received from the insurance companies and deposited in Float A/c by the assessee being Third Party Administrator (TPA) - addition u/s 40(a)(ia) - Held that:- This issue is covered in favour of the assessee by the decisions of this Tribunal in the case of ACIT Vs. Health India TPA Services P. Ltd. [2014 (2) TMI 1153 - ITAT MUMBAI] as well as the decision in the case of Paramount Health Services (TPA) Pvt. Ltd. Vs. ITO [2015 (3) TMI 185 - ITAT MUMBAI]. We find that an identical issue has been considered by this Tribunal in those cases by holding that the payment made by the assessee is only to replenish the amount in floating account and, therefore, the disallowance u/s 40(a)(ia) cannot be made when the assessee has not claimed any such expenditure in P&L Account. - Decided in favour of assessee.
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2014 (12) TMI 1326 - ITAT DELHI
TDS u/s 194C - non-deduction of TDS by the assessee on so-called reimbursement of advertisement expenses to its dealers - addition u/s 40(a)(ia) - Held that:- From the facts of the assessee’s case, it appears that it was a structure arrangement wherein the payments are routed through the distributors to circumvent the provisions of Chapter XVII-B of the Act. The bill raised for advertisement in the Danik Bhaskar by DB Corp Ltd., Zone-I, M.P. Nagar, Bhopal was in the name of Spice Communication Ltd. And the client name is also mentioned as Spice Communication Ltd. The SPG Distributors have mentioned in its letter to Mr. Sahil Kohli, Spice Mobile Ltd., placed at page 15 of the paper book, that they have already issued a cheque no.136282 of ₹ 2,24,795/- and asked for reimbursement. Thus, the bill raised by the advertisement agency was not in the name of distributor. This fact itself shows that there was a structure arrangement to avoid the TDS provisions.
The assessee himself has submitted letters from various regional distributors that they have complied with the provisions of TDS under the Act. Such confirmations are placed at pages 42 to 45 of the paper book. Certain bills raised by the advertisement agencies are in the name of distributors. Whether these persons have made TDS or not is not clear from the records. CIT (A) was justified in directing the assessee to produce the evidences before Assessing Officer to establish that the parties to whom the reimbursements have been made had actually complied with the provisions of Chapter XVII-B. Such verification is necessary to arrive at the correct facts of the case and to establish the extent of default on the part of the assessee for violating the provisions of TDS in respect of the payments of the advertisement expenses through the structural arrangement.
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2014 (12) TMI 1325 - ITAT JAIPUR
Taxability of foreign allowance received from Indian Employer - assessee was a non-resident during the year - assessee had paid taxes on the salary and allowances received in Netherlands - tax liability borne by the employer was being redeemed by the assessee in India - CIT(A) deleted the addition by observing that the appellant was non-resident and foreign allowances were not received in India during the year under consideration but received in Netherland. Such allowances wee paid by IBM India using a foreign currency travel card which could be used only outside India.
Held that:- The appellant was non-resident during the year under consideration and allowances were received by him in Netherlands. - The employer wrongly deducted TDS, the appellant had claimed refund on it. The Indian income has been considered by the appellant as taxable but the allowances paid outside the India are not taxable U/s 5(2) of the Act in the case of non-resident - Decided against the revenue.
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2014 (12) TMI 1324 - ITAT BANGALORE
Method of accounting followed by the assessee - justification in changing the method by AO - Project Completion Method OR Completed Contract method - Held that:- Apex Court in the case of CIT v. Hyundai Heavy Industries Co. Ltd., [2007 (5) TMI 196 - SUPREME COURT] also took the similar view and held that both the methods of accounting ( i.e., Project Completion Method and Completed Contract method) were recognized methods of accounting.
The assessee was at liberty to choose any of the above methods and if any one of the method of accounting was consistently followed by the assessee, the AO couldn’t change such method of accounting. The completed contract method followed by the assessee, in the instant case, therefore, could not be faulted with by the revenue authorities and on that basis it was not correct to say that the accounts of assessee did not present correct and complete picture of its profits. Therefore, there was no justification in changing the method from project completion to percentage completion method by the AO, which was upheld by the CIT(A). Therefore, the order of the Commissioner (Appeals) is set aside - we allow the appeal of the Assessee and hold that the method of accounting followed by the Assessee has to be accepted.
Liability to pay interest u/s.234A and 234B - Held that:- The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter and in this view of the matter, we uphold his action in charging the said interest. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala & Others (2001 (10) TMI 4 - SUPREME COURT).
Proportionate deduction u/s. 80IB(10) - profits derived from sale of residential units whose built-up area is less than 1500 sq.ft., even though some of the residential units in the very same project exceeds the built-up area of 1500 sq.ft. - Held that:- The same has been decided by the Hon’ble High Court of Karnataka in the case of CIT v. SJR Builders [2012 (3) TMI 615 - KARNATAKA HIGH COURT] as taken the view confirming the order of the Tribunal, by holding that where residential units exceed the built-up area of 1500 sq.ft., such units may be excluded for deduction, but the assessee will not lose the benefit of deduction u/s. 80IB(10) in its entirety. It is only with reference to the flats which is more than the prescribed area that the assessee will lose the benefit of deduction. - Decided in favour of assessee
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2014 (12) TMI 1323 - ITAT KOLKATA
TDS u/s. 194-I - rent paid to Kolkata Port Trust (KPT) - Held that:- We are of the view that in the instant case no tax was deductible at source under section 194-I read with section 204 comprised in Chapter XVII-B from the rent paid by the assessee to KPT. This is because such rent was not to be included in the taxable total income of the KPT and was, therefore, not chargeable under the provisions of the Act.
In the instant case, KPT was not required to pay any tax and in turn the assessee cannot be treated to be in default within the meaning of section 201(1). Accordingly, we are of the view that no disallowance ought to have been made under section 40(a)(ia) of the Act.
In the instant case no tax was deductible at source under section 194-I read with section 204 comprised in Chapter XVII-B from the rent paid by the assessee to KPT. This is because such rent was not to be included in the total income of the KPT and was, therefore, not chargeable under the provisions of the Act. In the case law referred by Ld. Sr. DR the fact relating to the claim of exemption of the income of KPT was not before Tribunal or that issue was not raised but in the instant case, KPT was not required to pay any tax and in turn cannot be treated to be in default within the meaning of section 201(1). Accordingly, we are of the view that no disallowance ought to have been made under section 40(a)(ia) of the Act. - Decided in favour of assessee
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2014 (12) TMI 1321 - ITAT KOLKATA
Income from subletting and other services - assessable as profit and gains from the business OR income from house property - Held that:- The assessee was given right to, “assigned, sub-let, under-let or part with any possession of the room or any part of room or permit any person to occupy even in case of temporary absence of assessee”. By virtue of this agreement assessee collected licence fees and other charges from sub-tenants and the Revenue all along has accepted the income declared by the assessee under the head “profits and gains of business or profession”.
The terms of the lease of business assets, the intention of the lessor is that the asset leased out must remain and be treated as commercial asset and there is an exploitation of the commercial asset during the lease period and lease received is assessable as business income. In view of the above facts of the case that the assessee is consistently declaring the receipt of income from sub tenants under the head, “profits and gains of business or profession”, we are of the view that principle of consistency will apply in this case as the issue stand covered by the decision of coordinate bench in the case of M/s. Banwarilal Goel & Sons Vs. ITO [2014 (2) TMI 1337 - ITAT KOLKATA]
In view of the above discussions, we uphold the grievance of the assessee and direct the Assessing Officer to treat the income in question as income from business as has been in preceding and subsequent assessment year. - Decided in favour of assessee
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2014 (12) TMI 1320 - BOMBAY HIGH COURT
Deduction u/s 80IB - Date of commencement of project u/s 80IB - earlier commencement certificate cancelled - Held that:- Earlier commencement certificates could not be held to be valid after one year from the date of issuance - thereafter, there was a commencement certificate issued on 2nd March, 2001 - if the earlier certificate was lapsed or were treated as cancelled, then, the Tribunal was right in its conclusion that benefit of section 80IB (10) can be derived or taken by the assessee thus all the three conditions for availing of the deduction or benefit are, thus, complied with - hence the appeal does not raise any substantial question of law and it is, accordingly, dismissed
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2014 (12) TMI 1317 - ITAT KOLKATA
Revision u/s 263 - non deduction of tds on payments of rent, consultancy charges, professional charges and sales promotion charges - Held that:- TDS is deductible only if the conditions specified for deduction of TDS are existing. Hence, CIT's observation in the order that the AO's order is erroneous and prejudicial to the interest of the revenue has no basis whatsoever.
The observation of the CIT that the AO's order being erroneous and prejudicial to the interest of the revenue is emanating from the show cause notice. Operative part of the order passed u/s. 263 of the Act the ld.CIT has held that he was of the view that the issue needs re-consideration, therefore, he was setting aside the issue and referring back to the table of the AO for re-consideration. Section 263 does not give any power whatsoever to the ld.CIT to remit the issue to the file of the AO without his finding that the order of the AO is erroneous insofar as it is prejudicial to the interest of the revenue - CIT's order passed u/s. 263 is not sustainable as the he has not given a finding that the order of the AO passed u/s. 143(3) of the Act is erroneous in so far as it is prejudicial to the interest of the revenue and had simply set aside the matter and referred back to the table of the AO for re-consideration. In our view this is not at all permissible u/s. 263 - Decided in favour of assessee
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2014 (12) TMI 1315 - ITAT KOLKATA
Disallowance of unabsorbed business loss and unabsorbed depreciation against business income and long term capital gains - whether the plant and machinery was put to use in the business of the appellant company? - scheme of amalgamation - Held that:- We, from the observation of the CIT, are clear that the section 72A and CBDT Circular explaining the above provision did not apply to the assessee company inasmuch as the fact that assessment company was the amalgamated company and not the amalgamating company. In such circumstances, according to us, the CIT(A) has not correctly interpreted this provision of section 72A of the Act.
Assessee is entitled for the claim of unabsorbed business loses and depreciation available for set off in the AY 2011-12. From the above, it is clear that the scheme of merger approved by Hon'ble High Court is in itself appreciation of facts that the merger and the amalgamation was carried out for the revival of the amalgamating company and that the amalgamation did serve genuine business purpose and hence, sec. 72A of the Act will not apply to the case of the assessee, being the amalgamated company and not the amalgamating company.
Disallowance of expenses debited on account of professional service charges for non-deduction of TDS u/s. 194J - addition u/s 40(a)(ia) - Held that:- The assessee stated that the assessee has deducted TDS on the above amounts of ₹ 2,62,492/- but could not produce the details before CIT(A) or before AO as the documents were not available or could not be traced at the relevant point of time. Accordingly, the assessee requested for setting aside the to the file of the AO. Ld. Sr. DR has not objected to the setting aside of this issue for verification of TDS deducted to the file of the AO. In term of the above, we remit this issue back to the file of the AO for verification of TDS deducted by the assessee. The AO will decide accordingly. This issue of assessee’s appeal is allowed for statistical purposes.
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2014 (12) TMI 1314 - KERALA HIGH COURT
Denial of exemption u/s 11 - whether the activities of the appellant would qualify to be a charitable purpose as defined in Section 2(15)? - Held that:- It is undisputed that the appellant is charging fees for supervision and centage charges, permission for transfer of land, copy of records, cost of forms, cost of plans, booklets and that the income on this account during the assessment year 2009-10 was ₹ 1,23,11,413/-. It is also undisputed that the appellant has developed several commercial centers and rented it out and that the appellant itself is responsible for the maintenance, upkeep and the provision of common facilities. The total receipts of such letting out and maintenance charges during the assessment year came to ₹ 4,09,73,498/-. It is also admitted that the commercial space developed by the assessee is auctioned by it to the highest bidder. These activities that are carried on by the assessee are for consideration and purely on commercial lines and these are activities which any other real estate developer is engaged in.
Considering the nature of the activities that are carried on by the assessee, the factual correctness of which is undisputed, we can only endorse the view taken by the statutory authorities that in view of the proviso to Section 2(15), the activities of the assessee do not qualify to be charitable purpose as defined therein. In such a scenario, the assessing officer was justified in disallowing the exemption claimed and assessing to tax the income of the assessee and the appellate authorities were justified in confirming the same. - Decided against assessee.
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2014 (12) TMI 1312 - ITAT MUMBAI
Disallowance u/s.14A - investment in the subsidiary of the assessee - Held that:- There is no dispute that there is fresh investment during the year by the assessee and the investment was made in the earlier years that too in the subsidiary of the assessee. The assessing officer did not disallow the interest expenditure u/s.14A, in the Assessment years 2006-07 & 2007-08. It is pertinent to note that the use of borrowed fund has to be examined in the year of investment and if the AO has not disallowed any interest expenditure in the year investment then no disallowance can be made in the subsequent year when no fresh investment was made by the assessee. Therefore, AO can not take a different view in violation of rule of consistency when there is no change in the facts and circumstances of the case rather in the year under consideration there was no fresh investment.
Apart from no fresh investment for the assessment year 2008-09 it is also undisputed fact that investment in question is in the subsidiary of the assessee and further there was neither dividend income nor any claim of exempt income of the assessee. Thus issue was considered by the Hon’ble Gujarat High Court in the case of CIT vs. Corrtech Energy (P) Ltd.(2014 (3) TMI 856 - GUJARAT HIGH COURT) and after following the judgment of Hon’ble P & H High Court in the case of CIT v. Winsome Textile Inds. Ltd.(2009 (8) TMI 220 - PUNJAB AND HARYANA HIGH COURT) it was held that when the assessee did not claim of any exempt income, section 14A has no application.
The Coordinate Bench of this Tribunal in case of Garware Wall Ropes Ltd. v. ACIT (2015 (2) TMI 628 - ITAT MUMBAI) has taken a view that no disallowance can be made u/s.14A in the case of investment in the subsidiaries for the purpose of holding the controlling stack and not for earning dividend income. - Decided in favour of assessee.
Disallowance as u/s.40(a)(ia) for Short deduction of TDS - Held that:- the assessee deducted the tax under the belief that the rate of tax provided under the specific provision of chapter XVII applicable in the case of the assessee which was not accepted by the AO, therefore, the provisions of section 40(a)(ia) cannot be applied of Short deduction of TDS due to the bona fide belief of the assessee. In the case in hand the facts are not brought on record by the assessee as what is the reason for short deduction. Therefore, in the absence of complete and proper facts it is not possible to decide the issue conclusively. Accordingly, we set aside this issue to record of the CIT appeal for verification of the relevant facts and particularly the reason for short deduction of TDS by the assessee
Addition u/s 14A - Held that:- Though the disallowance of interest under rule 8D(ii) is not applicable, when the assessee is having its own fund which are more than the investment in question however when there is a direct connection of the borrowed fund used for investment then the decision in the case of Reliance Utilities & Power Ltd. will not help in the case of the assessee. Accordingly, the disallowance of interest of ₹ 2,15,753/- as a direct interest expenditure under Rule 8D(i) has to be made. In view of the above discussion we modify the order of the authorities below and restrict the disallowance to the extent of ₹ 2,15,753/- on account of interest expenditure u/s.14A. Accordingly, this ground is partly allowed.
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2014 (12) TMI 1311 - ITAT MUMBAI
Reference to taxability of CIDCO as assessee liable to tax - income to the assessee by way of remuneration received from the State Government - assessee should be held to be an “agent” of the State or an “arm” of the State and exempt from assessment of income in his hands - Held that:- In assessee’s own case for the assessment year 2006-07 [2012 (9) TMI 331 - ITAT MUMBAI], we found that all the addition made by the AO have been deleted except income of assessee by way of remuneration received from the State Government. In this regard, the Tribunal at para 48 has directed the AO to decide the case on merits with regard to the income of ₹ 5 lakhs received by the assessee, after allowing deduction for any expenses incurred wholly and exclusively for the purpose of earning the said income.
It is clear that only with respect to remuneration from State Government, the matter was restored back to the file of AO. All other additions were deleted. Respectfully following the order of the Tribunal, we delete all the additions except the amount of remuneration, if any received from the State Government and direct the AO to decide the taxability of such remuneration after allowing deduction for any expenses incurred wholly and exclusively for the purpose of earning the said income.
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2014 (12) TMI 1310 - ITAT VISAKHAPATNAM
Disallowance of depreciation on certain equipment forming part of cogeneration system - Held that:- As we consider the contention of the assessee that the higher efficiency boiler and 12.65 KVA turbine have to be considered together along with other equipments necessary for generation of power, as the integrated cogeneration system. In our view, there cannot be two opinions that high efficiency boiler along with turbine and the associated equipments connecting them, increasing its efficiency etc., are to be considered as part of cogeneration system and are therefore eligible for higher depreciation allowance.
CIT(A) observed that RCC Chimney and Bagasse Drier are part of the higher efficiency boiler. This factual finding is not disputed before us by the revenue. Thus, both these items have to be considered as integral part of the cogeneration system. The very expression ‘cogeneration’ refers to simultaneous generation of two forms of power i.e. heat and electricity. Boiler is one component of such system wherefrom the root power i.e. steam is generated and it is this steam that is converted into electricity power with the use of a turbine. Thus, the boiler has a dual utility i.e. as standalone item and also a part of cogeneration system. High efficiency boilers are required for generation of power. Therefore, RCC Chimney and Bagasse drier forming part of boiler system are eligible for higher depreciation.
Coming to DC Drier which are energy saving devices, we are of the view that this cannot be used independently in a cogeneration system. These are energy saving device and are eligible even on standalone basis for higher rate of depreciation. They fell within one of the specific category in energy saving device. Hence, higher rate of depreciation should be allowed on this equipment also.
Steam Piping is part of the boiler. We do not appreciate the findings of the revenue authorities that steam piping cannot be considered as part of cogeneration system. Even applying the test laid down by various courts, we have to necessarily hold that steam piping cannot be used independently or standalone basis. It is an integral part of cogeneration system, hence, eligible for higher depreciation.
Coming to the coal & gas feeding system and coal handling system, we apply the decision of Hon’ble M.P. High Court in the case of Vippy Solvex Products Ltd (2007 (3) TMI 746 - MADHYA PRADESH HIGH COURT) and come to our conclusion that this is an integral part of high efficiency boiler. The very description of nature of the equipment demonstrates that it cannot be independently used and has to be used along with the boiler. Thus, we direct the AO to treat the coal & gas feeding system and coal handling system as integrated part of cogeneration system and allow higher depreciation on the same.
With regard expenditure on Sub-station power line, we cannot agree with the contention of the appellant that expenditure incurred on sub-station power line is also part of the cogeneration system. This expenditure is necessary for onward distribution of the power generated in a cogeneration system and hence cannot be considered as an integral part of the cogeneration system.
We now consider the additional ground raised by the assessee on the issue of expenditure incurred on sub-station power line, which was ultimately handed over to APTRANSCO. Both the parties agreed that this is legal claim and that the facts are on record. Under these circumstances, we hold that the ld CIT(A) should have admitted this additional ground of the assessee and adjudicated the same following the decision of Hon’ble Supreme Court in the case of NTPC Ltd., (1996 (12) TMI 7 - SUPREME Court).
We direct the AO to treat the expenditure incurred by the assessee on construction of sub-station power lines as incurred in the revenue field and allow the claim of the assessee. Needless to say that since the entire expenditure incurred by the assessee is allowed as revenue expenditure the question of allowance of depreciation does not arise.
Claim of the assessee that the expenditure incurred for sanction of HT power line is in the revenue field. The amount is paid as non-refundable amount to obtain approval of power distribution company ltd., for extension of power supply. No asset has been created and hence, the question of treating the expenditure as capital in nature does not arise. Consistent with the view taken by us in the case of Substation power line, which was handed over to APTRANSCO, we direct the AO to allow this expenditure as in the revenue field.
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2014 (12) TMI 1308 - DELHI HIGH COURT
Proceedings under Section 153A/C - Amalgamation of two companies - Assessment to be made on which entity – Held that:- This appeal by the Revenue has to be dismissed in view of the decision of this Court in Commissioner of Income Tax-III versus Dimension Apparels Private Limited [2014 (11) TMI 181 - DELHI HIGH COURT ].Noticeably, the Assessing Officer during the course of the proceedings under Section 153A/C of the Income Tax Act, 1961 was informed about the amalgamation, which resulted in dissolution of the respondent-assessee, but no remedial or effective steps were taken. The appeal is accordingly dismissed.
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