Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 1491 - AT - Income TaxCalculation of liability - Incremental liability for payment of pension under the Voluntary retirement scheme (VRS) created on an actuarial basis in computing the assessee’s total income - HELD THAT:- Tribunal in assessee’s own case for A.Y. 1994-95 [2013 (2) TMI 95 - ITAT MUMBAI] followed the findings given by the Tribunal in A.Y. 1993-94 [2012 (8) TMI 492 - ITAT, MUMBAI] and has restored this issue back to the file of AO to examine and verify the actuary valuation certificate and the agreement with the company and the employee and if he finds that the liability has been calculated on a scientific basis, may allow the claim of the assessee - Ground of appeal No.1 is decided in favour of the assessee. Nature of expenses - disallowance of 20% of foreign traveling expenses - revenue or capital expenditure - HELD THAT:- As decided in own case disallowance has been made on assumptions and presumptions. The very basis on which the disallowance has been made is found to be not correct. In fact in AY 74-75, 64-65 76-77 and 77-78 similar disallowance of expenses has been deleted by the Tribunal. Ground of appeal No.2 is decided in favour of the assessee. Disallowance of entertainment expenses - HELD THAT:- Tribunal had dealt with the said issue in the assessee’s own case for the AY.1995-96 [2013 (10) TMI 1039 - ITAT MUMBAI]. we direct the AO to allow the lunch expenses on employees during the outdoor duty, business meeting expenses, expenses on AGM fully and we confirmed disallowance out of the total canteen expenses - Ground No.3,raised by the assessee, is partly allowed. Disallowance of hotel expenses and air fares of foreign visitors coming/visiting to India - HELD THAT:- As decided in own case as held foreign victors came to India for purposes of attending the board meetings, general discussion, finance, reporting etc. It is considered that the expenditure represented predominantly business expenditure. Deduction u/s 80HHC - reducing the loss on export of trading goods from deduction computed under section 80HHC(3) in respect of manufactured goods - HELD THAT:- As decided in own case in reducing the loss on export of trading goods from the deduction computed u/s.80HHC(3)of the Act in respect of manufactured goods. AR fairly conceded that issue is decided in favour of the department in view of the judgment of Hon’ble Apex Court delivered in the case of Ipca Laboratories Deduction u/s.80O on net research income earned after deducting expenses - HELD THAT:- Representatives of both the sides agreed, before us, that the issue stands covered against the assessee by the orders of Asian Cable [2003 (3) TMI 87 - BOMBAY HIGH COURT], Petroleum India International [1999 (6) TMI 458 - ITAT MUMBAI] and M.N. Dastur & Co. [2000 (1) TMI 29 - CALCUTTA HIGH COURT]. Respectfully, following the above orders, we decide the issue against the assessee. Entitlement of the assessee to interest u/s.244A on the amount of Self Assessment (SA)tax paid by it - Decided in favour of assessee. Eligibility of the assessee for depreciation on assets that stood vested in Ciba Speciality Chemicals (India) Ltd.(CSCIL) - demerger of company - AO came to the conclusion that the book value of the transferred assets shall be adopted from block of assets for the purpose of depreciation and since consideration had flowed to the assessee for the transfer of assets to CSCIL the assessee was not entitled to claim of depreciation - HELD THAT:- As relying on Kasturi & Sons [1999 (3) TMI 6 - SUPREME COURT]. we find that what was transferred, in the transaction in question, was not money. In our opinion, facts of the above case are quite similar to the case under appeal.We have also taken note of fact that it is a case of demerger,not of sale or exchange.Last ground of appeal,raised by the assessee, is decided in its favour. Nature of expenses - Disallowance of expenses incurred on amalgamation/demerger and in holding that the expenditure was of revenue nature - HELD THAT:- As decided in Bombay Dyeing & Mfg. Co. Ltd [1996 (2) TMI 8 - SUPREME COURT] expenditure incurred towards professional charges of the solicitors firm for the services rendered in connection with the said amalgamation was in the course of carrying on of the assessee’s business and, therefore, deductible as a revenue expenditure - Decided in favour of assessee. Expenditure incurred on computer software - HELD THAT:- As application software are of revenue in nature as the AO has not doubted that the expenses were on application software. See Asahi Safety Glass ltd. [2011 (11) TMI 2 - DELHI HIGH COURT] Estimated freight components in the closing stock - HELD THAT:- As decided in own case 1996-97 there is no impediment to the deduction of true profits and gains of the business because of the method of valuation followed by the assessee consistently and which has also been accepted by the departmental authorities. A stray departure just for one year tends to upset the calculations. When the method has not been found fault with for a long period of years. It acquires fundamental character and forms a sound basis for the assessment of the profits especially when the method followed is not patently false or unacceptable, and any accepted fundamental feature of an assessment cannot be lightly tinkered with as held by the Supreme Court in the case of Radhasaomi Satsang Sabha [1991 (11) TMI 2 - SUPREME COURT] Exclude the sales tax and excise duty for the purpose of computing deduction u/s. 80HHC - HELD THAT:- .The Hon’ble Apex Court and the Jurisdictional High Court have in the cases of Laxmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] and Sudershan Chemical Industries Ltd. [2000 (8) TMI 73 - BOMBAY HIGH COURT], held that sales tax and excise duty cannot be included for the purpose of computing the 80HHC deduction. Disallowance u/s 14A - HELD THAT:- We restrict disallowance to 0.05% of the exempt income. Deduction u/s.43B on delayed payment of ESIC - HELD THAT:- We find that the assessee had paid the dues before the due date of filing of return and there was only delay of one day in depositing the amount.In our opinion,there is no need to interfere with the order of the FAA.Confirming the same,Ground No.8 is decided against the AO.
|