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2019 (10) TMI 1584 - AT - Income TaxNature of expenses - Expenditure incurred on Facilities put up but ownership lying with others/statutory authorities - since the expenditure was incurred for the smooth running of the business of the assessee, the expenditure is inevitably is a business expenditure - HELD THAT:- As consistent with the earlier decision of the Tribunal [2016 (11) TMI 1751 - ITAT MUMBAI] held that expenditure as incurred on construction of Railway Track and siding is revenue expenditure and not a Capital expenditure. Decided in favour of assessee. Disallowance u/s. 14A - assessee received dividend from two Joint Venture Companies - assessee made suo moto disallowance on the basis of tax Auditor certificate - AO invoked the provisions of Rule 8D and made disallowance - HELD THAT:- It is an admitted position under the law that the provisions of Rule 8D is not applicable for the year under consideration. Further, we have seen that in assessee's own case for AY 2003-04 [2016 (11) TMI 1751 - ITAT MUMBAI] the Tribunal on similar set of facts as held disallowance of section 14A was restricted as per the tax Auditors certificate, we direct the AO to verify the fact if the disallowance under section 14A was restricted as per tax Auditors certificate in AY 2010-11 to 201213 and restrict the disallowance to Rs. 53.70 lakhs. In the result this ground of appeal is allowed. Allowability of Establishment expenses - Nature of expenses - reliance on particular treatment is given in the books of account - assessee submits that the expenses are in the nature of salary, dearness allowances, postage, Bank charges, stationary etc in relation to employee of project department who monitors various projects in the existing line business - HELD THAT:- We have seen that in assessee's own case for AY 2003-04 to 2005-06 [2016 (11) TMI 1751 - ITAT MUMBAI] on similar set of facts Accounting Practices cannot be override section 56 or any other provisions of the Act. The assessee incurred expenses on various personnel/employee in the project for supervision and monitoring the various project and marketing allocation and refineries which is certainly allowable as business expenditure u/s. 37(1) of the Act. Expenses were made on account of salary, Dearness Allowance (DA), Conveyance Expenses, postal charges, bank charges, rent for housing accommodation, Motorcar etc. which is certain of revenue expenditure. Decided in favour of the assessee. Provision toward post retirement medical benefits - HELD THAT:- We have noted that this is recurring issue from the AY 1996-97 onwards and on identical grounds of appeal, the Tribunal in AY 2003-04 [2016 (11) TMI 1751 - ITAT MUMBAI] in set-aside the matter to the file of AO to verify the Actuarial Valuation Report and then allowed the claims of assessee, this ground of appeal is allowed for statistical purpose. Deduction of leave encashment u/s 43B - claim of the assessee was not considered by the lower authorities for the regions that it was claimed without filing the revise return of income - HELD THAT:- As identical grounds of appeal, the Tribunal in AY 2003-04 [2016 (11) TMI 1751 - ITAT MUMBAI], Goetz India Ltd [2006 (3) TMI 75 - SUPREME COURT] held that whenever the assessee makes a mistake or omitted to lodge a legitimate claim, the appellate authority be it first appellate authority or the second appellate authority, has vide power to entertain the new grounds of appeal. Thus we admit the grounds of appeal raised by the assessee and restore this ground of appeal to the file of AO to reconsider it afresh and pass order in accordance with law. Thus, this ground of appeal is allowed for statistical purpose. Nature of receipts - Treatment of profit on sale of oil bonds - capital gain or business income - HELD THAT:- We find that in the case of Patnaik & Co. Ltd. [1986 (7) TMI 6 - SUPREME COURT] held that Appellate Tribunal found that having regard to the sequence of events and the close proximity of the investment with the receipt of Government orders the conclusion was inescapable that the investment was made in order to further the sales of the assessee and boost its business. In the circumstances, the Appellate Tribunal held that the investment was made by way of commercial expediency for the purpose of carrying on the assessee's business and that therefore, the loss suffered by the assessee on the sale of the investment must be regarded as a revenue loss. Also decided in DCM Shriram Consolidated Ltd. [2015 (5) TMI 727 - ITAT DELHI] loss due to foreign exchange fluctuation in foreign currency transactions in derivatives has to be considered on the last date of accounting year and it is deductible u/s. 37(1). Decided in favour of assessee. Additional ground of appeal before ld CIT(A) - Deduction for feasibility study expense - CIT(A) held that the power to entertain new/additional ground of appeal is available before the Tribunal and not CIT(A) - HELD THAT:- We have noted that the assessee raised the additional ground of appeal before the ld. CIT(A), which was not allowed by him by taking view that only Tribunal is entitled to admit the additional ground of appeal. In our view the decision of ld CIT(A) was not in consonance with the decision of Hon'ble Bombay High Court in Pruthwi Broker and shareholder [2012 (7) TMI 158 - BOMBAY HIGH COURT] therefore, we admit the additional ground of appeal raised by the assessee. We are in principal accepting that the claim of the feasibility study expenses is allowable expenses. However, keeping in view that the assessee has raised this issue for the first appellate stage, therefore, we deem it appropriate to restore this issue to the file of AO to verify the expenses and allow in accordance with law. Deduction u/s. 80IB pertaining to VREP-II Unit - HELD THAT:- We find that the in assessee's own case for the assessment year 2005-06 [2016 (11) TMI 1751 - ITAT MUMBAI] has considered similar issue in assessee's favour wherein as directed to accept the appellant's claim of profit from the VERP II for the purpose of deduction u/s 80 IB. Decided in favour of assessee. Deduction u/s. 80IB in respect of Silvassa Lube Blending Plant - AO disallow the deduction as no manufacturing or production of articles are done by assessee in terms of section 80IB(2)(iii) - CIT(A) allowed relief to the assessee by holding that the assessee is manufacturing lubricants from Lube Oil base stock, which is considered as manufacturing activity under Central Excise Act - HELD THAT:- We have noted that the end product manufactured by assessee as explain hereinabove is quite distinct and is a commercially different article than the major input rectified, which is fit for consumption/use for commercial use. That the changes made in input result in a new and different article is recognized in the trade as such. Hence, the assessee, in the instant case, satisfied the requirement, that it manufactured or produced an article or thing for the purpose of section 80-IB. Thus, we affirm the order passed by ld CIT(A). In the result the appeal of the revenue is dismissed. Interest u/s. 244A on payment of self assessment tax - HELD THAT:- The Hon'ble Bombay High Court in Stockholding Corporation of India Ltd. [2014 (11) TMI 899 - BOMBAY HIGH COURT] held that tax paid on self assessment would fall under section 244A(1)(b), i.e. a residuary clause covering refunds of amount not falling under section 244A(1), therefore, interest is payable on refund on excess amount paid on self assessment tax. Considering the decision of Jurisdictional High Court we do not find any infirmity in the order passed bt. ld CIT(A), which we affirm. In the result this ground of appeal raised by the revenue is also dismissed. Interest on delayed refund issued - as per DR delay in filing TDS certificate was attributable to the assessee, the assessing officer was right in restricting the interest u/s. 244A from the date of filing of TDS certificates.HELD THAT:- We have noted that the assessee claimed the AO while issuing refund granted interest from the date of submissions of TDS instead of 01.04.2006. It was claimed that the TDS amount is also to be treated as advance tax as paid u/s. 199. The ld CIT(A) after considering the submissions agreed with the contention of the assessee. CIT(A) while directing the AO has clearly held that section 244(1)(a) clearly prescribed the calculation of interest on advance tax and TDS from 1st day of the April of the assessment year. No contrary fact is brought to our notice to take the other view. In the result we affirm the order of ld CIT(A) is affirmed and the ground of appeal raised by the revenue is dismissed.
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