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2018 (12) TMI 196 - AT - Income TaxDisallowance on account of sugarcane development expenses - AO submitted that Cane development expenses incurred for development of the infrastructure facility are in the nature of capital expenditure and thus not allowable - Held that:- Sec. 37(1) provides that any expenditure, not being in the nature of capital expenditure of personal expenses of the taxpayers, laid out or expended wholly and exclusively for the purposes of his business, is to be allowed as deduction in computing the income chargeable under the head "Profits and gains of business or profession". Hence, any expenditure incurred by a sugar factory on cane development programmes would be eligible for deduction in computing the taxable profits if, having regard to the facts and circumstances of the case, AO is satisfied that the conditions laid down in s. 37(1) of the Act are fulfilled. The withdrawal of the tax concession under s. 35C would not affect this position - Decided in favour of assessee. Disallowance on account of provision for liability outstanding - Held that:- Identical liability was raised in respect of electrical stores and other expenditure in assessment year 2006-07. Thus, we do not find any error in the order of the CIT(A) while adjudicating this issue for the Assessment Year 2004-05, came to a conclusion that the liability in question is ascertained liability and hence allowable under the mercantile system of accounting. Assessee made a statement at the Bar that these liabilities were discharged in the immediately succeeding Assessment Year. This is a timing issue i.e. the year of allowability of the expenses is in dispute. On the principle of consistency, we are of the considered opinion that the order of the First Appellate Authority has to be upheld as in the earlier Assessment Year the finding of CIT (Appeals) on the year of allowability has not been challenged by the Revenue. In the result this ground of the Revenue is dismissed Late payment of the employees contribution to Provident Fund and ESI is not allowable to the assessee - Held that:- We note that the Hon’ble Jurisdictional Delhi High Court in the case of CIT Vs AIMIL[2009 (12) TMI 38 - DELHI HIGH COURT] held that the assessee can get benefit of section 36(1)(va), if the actual payment towards the PF/CSI contributions is made before the return is filed. - Revenue appeal dismissed.
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