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2020 (12) TMI 488 - AT - Income TaxDisallowance of interest on disputed Govt. duty (Electricity Duty and water charges) - AO in the assessment order stated that the payments of interest on such dispute of electricity duty and water charges are not ascertained liabilities hence not allowable as business expenditure - HELD THAT:- As decided in own case[2019 (10) TMI 124 - ITAT CUTTACK] we direct the AO to delete the disallowance made on account of interest on disputed Govt. duty (Electricity duty and Water Charges. Increasing the additions/disallowance under "Peripheral Development Expenses" - expenses not incurred wholly and exclusively for the business purpose and disallowed the claim - HELD THAT:- AR referred to the paper book and submitted that assessee has complete information of the expenditure incurred in peripheral area of various districts and the area includes Taluka and villages where company's activities are carried out and this expenditure is incurred on the order of the Government of Odisha. It is wholly and exclusively used for the purpose of business. AR referred to the nature of the expenditure incurred through the corporate office at Bhubaneswar and further submitted that the assessee has evidence to prove the claim. Considering the above facts and submission put forth by the ld. AR and findings recorded by the CIT(A) in details, it would be pertinent to reconsider the matter at the level of AO. Therefore, the issue is remitted back to the file of Assessing Officer for re-examination and the assessee is also given liberty to produce supporting evidence with regard to peripheral expenditure before the AO. Also assessee has taken alternative plea before the CIT(A) that if the peripheral development expenses incurred in the corporate office are not allowed as not incurred for the purpose of business, then it should be allowed the benefit u/s. 80G of the Act for the donations included in the peripheral development expenses which are eligible for such deduction. In this regard, we direct the AO to considering the above alternative plea of the assessee on production of supporting documents. Disallowance u/s. 40(a)(i) - assessee failed to make TDS from the payment in foreign currency - HELD THAT:- we are of the opinion that the matter needs to be examined by the AO and, thus we remit this issue to the file of the AO to examine as to whether the assessee has deducted appropriate TDS from the payment in foreign currency as per Section 195 read with Section 9(1)(i) and 9 (1)(ii) of the Income Tax Act, 1961. In this regard, the assessee is directed to submit the relevant documents relating to foreign remittance and TDS and cooperate with the AO for early disposal of the case. Needless to say, the assessee shall be provided a reasonable opportunity of being heard. Disallowance of provision for Leave Encashment u/s. 43B(f) - AO observed that the provision for leave encashment has not been added back to the income as per the provisions of Section 43B ad added the unpaid liabilities to the total income of the assessee - HELD THAT:- As relying on assessee own case [2019 (10) TMI 124 - ITAT CUTTACK] we remit the issue to the file of AO to examine and allow the claim of the assessee as per Section 43B(f) of the Act in terms of the observations made by the Hon'ble Supreme Court in the case of Exide Industries Ltd [2020 (4) TMI 792 - SUPREME COURT] in this regard. Additional Depreciation u/s. 32(i)(iia) - AO disallowed the claim on account of the fact that the assessee could not produce the particulars/details of actual cost during the course of assessment proceedings - HELD THAT:- CIT(A) has already remitted the issue to the file of AO to allow the claim of the assessee after verification of necessary details. Therefore, any order/direction by us, at this stage, on this issue, would be futile exercise. However, a reasonable order is expected from the AO on the above observations of CIT(A). Thus, groundis allowed for statistical purposes. Disallowance u/s. 43B of the Act-Under 'Electricity Duty' & water charges - HELD THAT:- We find that the liability under the provisions of Section 43B of the Act disallowed by the AO has already been decided by the coordinate bench of the Tribunal in assessee's own case and matter is pending before the Hon'ble High Court - Respectfully following the decision of the coordinate bench of the Tribunal in assessee's own case for earlier year, we dismiss the ground of assessee. Disallowance of the loss claimed on account of re-valuation of non-moving stores and spares - HELD THAT:- We found that the Tribunal in assessee's own case [ 2019 (10) TMI 124 - ITAT CUTTACK]has already decided the issue against the Revenue confirming the observations made by the CIT(A) thereby deleting the addition made on account of loss on revaluation of non-moving stores and spares. TDS u/s 194I - Non deduction of TDS on the payment to GRIDCO - HELD THAT:- CIT(A) has decided the issue and deleted the addition made by the AO u/s. 40(a)(ia) of the Act considering the decision of coordinate bench of the Tribunal in the case of GRIDCO [2011 (11) TMI 77 - ITAT, CUTTACK], Madhyanchal Vidyut Vitran Nagam Ltd {2015 (5) TMI 788 - ITAT LUCKNOW} and the case of Maharashtra State Electricity Distribution Co. Ltd. [2015 (5) TMI 396 - BOMBAY HIGH COURT] wherein held that no tax is deductible u/s. 1941 in the case of payment for wheeling or transmission charges. Addition made under the head claims, receivables, debts, shortages etc. written off - HELD THAT:- Assessee has purchased coal from Mahanadi Coal Field Limited which is Government of India Enterprises and the assessee after purchasing coal it is transported upto the destination where the coal measurements are taken by the assessee and shortages are also properly recorded but the CIT(A) has not observed as to whether the shortage are claimed by the assessee to the transporters and without examining the above facts the CIT(A) deleted the addition made by the AO, which in our opinion is not plausible The assessee has just explained before us that the shortage of coal worked out to 0.498% of the total coal purchased and simply accepted that the above percentage of shortage is very reasonable nor the auditors have made any adverse comments. Stating this fact, the assessee company has kept itself mum. It is also a fact that the coal is not an evaporated item, rather it is solid items for which, the quantity dispatched from the weighbridge at the loading point should be received with the same weight at the weighbridge of the destination point. As per our considered opinion and looking to the facts of the case, the assessee must have claimed to the responsible transporters which is lack in this case - The supplier of the coal is also government of India enterprises, therefore, there should not be any difference in the supply of coal. therefore, the ld. CIT(A) is not justified deleting the addition made by the AO. Disallowance of claim of investment allowance u/s. 32AC - HELD THAT:- As per our considered opinion, this new incentive section have been inserted in the Income Tax Act to encourage substantially investment in plant and machinery which will result in a increased capital flow to the manufacturing sector for acquired and installed during the period from 01.04.2013 to 31.03.2015. While introducing this section the decision of Hon'ble coordinate bench of ITAT Delhi in case of International Cars & Motors Ltd. [2013 (2) TMI 347 - ITAT DELHI]- Respectfully following the above decision of the Tribunal, and the commentaries of the Finance Act as reproduced hereinabove, we think it fit to send back to the file of AO for re-examination of the claim made by the assessee u/s. 32AC of the I.T. Act after considering the above commentaries of the Finance Act and the decision of the coordinate bench of the Tribunal.
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