Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 1209 - AT - Income TaxDeduction u/s 80HHC on DEPB in full as claimed by the assessee in his return of income - HELD THAT:- As both the parties have to be looked into the context of the law laid down by various decisions passed by the Hon’ble High Courts as well as the Supreme Court in cases of Avani Exports [2015 (4) TMI 193 - SUPREME COURT] and Carpet India [2019 (9) TMI 738 - SUPREME COURT]. Hence, we are remanding back both the issues to the file of the Assessing Officer for fresh adjudication in light of the provisions of law settled by the judicial forums including Hon’ble Apex Court. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Hence, Ground Nos. 2 and 3 of the assessee’s appeal are partly allowed for statistical purpose. Disallowance on account of interest - HELD THAT:- It is pertinent to note that from the paper books pointed out by the Ld. AR during the hearing, it can be seen that these advances were not from the interest bearing borrowed funds. Thus, the advances were exclusively for the purposes of business of the assessee and the Assessing Officer has not taken cognizance of the same. Further while disallowing the claim of the assessee, the Assessing Officer failed to establish the nexus between the amount not given and the advances. Thus, the CIT(A) was not correct in confirming this addition. Allowability of deduction u/s 80HHC by the Assessing Officer only after reducing the amount of deduction u/s 80IB from the amount of business profit - HELD THAT:-We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the Hon’ble Delhi High Court in case of Great Eastern Exports Ltd. [2010 (11) TMI 91 - DELHI HIGH COURT] held that the deduction allowed u/s 80-IA had to be reduced from the profits for computing deduction u/s 80HHC. The same principle will be applicable in the present case, hence, Ground No. 8 is dismissed. Depreciation @ 50% on machinery purchased under TUF Scheme - HELD THAT:- As assessee is in the business of manufacturing and export of handloom goods, floor coverings and made ups which are covered under the TUF scheme, though the Assessing Officer has not denied these facts. The assesse in fact, has demonstrated before us by giving details which was produced before the Assessing Officer as well, as to how each machinery is covered under which clause of TUF Scheme. Thus, the CIT(A) has rightly held that after comparing the bills, the description of the machines and the relevant entry in schedules to TUF Scheme, it is clear that item no. 1 to 30 and 36 are covered under TUF Scheme and the same are eligible for depreciation accordingly @ 50%, whereas, item no. 31 to 35 totaling for value of ₹ 97,000/- only are not covered under any clause of the schedules of TUF Scheme, therefore, the machinery worth ₹ 97,000/- are eligible for depreciation at the normal rate of 25% and accordingly directed the Assessing Officer. Therefore, there is no need to interfere with the findings of the CIT(A). Difference in the value of stock as per stock statement submitted to the Bank and as declared in the trading results of the assessee - HELD THAT:- As the books of accounts of the assessee were never rejected by the assessee during the year. Further, from the perusal of the details filed by the assessee, it can been seen that the assessee received/ purchased goods worth ₹ 4,66,94,618/- before 01.03.2004. The said purchase is evident from the bills and vouchers. All these documents/evidences were before the Assessing Officer. Thus, the CIT(A) rightly deleted this addition with justifiable reasoning. Therefore, there is no need to interfere with the finding of the CIT(A). Hence, Ground No. 2 of the Revenue’s appeal is dismissed. Disallowing foreign traveling expenses - DR submitted that the assessee other than the partners of the firm or the supporting bills could not produced any other evidence to establish that these expenses have been wholly and exclusively for the business purposes - HELD THAT:- From the perusal of the order of the CIT(A) as well as the Assessment Order, it can be seen that the evidences/documents were produced by the Assessee during the assessment proceedings to establish the claim of the assessee that the foreign travel was exclusively for the business purpose only. Hence, there is no need to interfere the findings of the CIT(A). Addition on account of building repair and maintenance expenses - HELD THAT:- AO has not disputed the expenditure incurred on repair and maintenance but held the same as capital expenditure. The assessee’s factory is on rented premises and there is no new structure created by the assessee. These facts were also not disputed by the Assessing Officer. Hence, there is no need to interfere with the finding of the CIT(A). Ground No. 5 of the Revenue’s appeal is dismissed. Disallowing export promotion expenses - HELD THAT:- It is pertinent to note that the AO has allowed the export promotion expenses to the extent of 9/10th of the expenses claimed by the assessee. AO never disputed that there is export promotion expenses. In fact, there is no observation by the AO that certain portion of these expenses were utilized for personal use.The disallowance is only on the basis of presumption and assumptions.Therefore, the CIT(A) rightly deleted this addition.
|