TMI Blog2006 (12) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... -------------------------------------------- 1. Paid to sales-tax authorities against penalty 100 imposed by them under s. 36(4A) --------------------------------------------------------- 2. Paid to Consumer Forum against the notice 3,050 issued by Kakinada Consumer Redressal Forum --------------------------------------------------------- 3. Paid to Dy. Inspector of Registration Dy. 21,810 Controller of Stamps for non-compliance of stamping to be done in H.P Agreement with hirers --------------------------------------------------------- Total 24,960 --------------------------------------------------------- 5. Shri K.R. Kamdar the learned Authorised Representative did not press the ground so far as it related to the items Nos. 1 and 2 above and therefore, the disallowance. 6. The item No. 3 represents penalty levied under the Stamp Act. The assessee was found to have made a short payment of Rs. 3,84,150 in relation to as many as 4,362 hire purchase instruments and therefore the Dy. Inspector General of Registration Bombay, vide his order dt. 22nd Dec., 1994 levied a minimum pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 36(1)(va); (ii) The deduction in respect of employers contribution is to be allowed, if the payment has been made by the assessee before the due date of filing of return prescribed in his case. (iii) in case of employees contribution, the deduction is to be allowed if the payment is made within the grace period of the due date as specified in s. 36(1)(va). 9. We respectfully follow the precedent and remit this matter back to the file of the AO for being examined in the light of the decision of the Tribunal. He will pass a fresh order on this point after giving adequate opportunity of being heard to the assessee. The ground No. 4 is decided accordingly. Ground Nos. 5 and 10: "5.1 On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the Dy. CIT and treating the entire amount of Rs. 2,55,07,817 incurred in connection with the public issue of shares as capital expenditure. 5.2 The CIT(A) further erred in holding that interest earned on share application money, amounting to Rs. 1,67,70,691 ought not to be reduced from the expenditure incurred on public issue of shares while computing the disallowance in respect of publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Mass Services (P) (Registrar expenses) 44,88,496 ------------------------------------------------------------ 5. Advertisement expenses 35,50,531 ------------------------------------------------------------ 6. Printing, stationery and courier charges 16,29,535 ------------------------------------------------------------ 7. Stamp duty 6,02,721 ------------------------------------------------------------ 8. Expenses 13,04,049 ------------------------------------------------------------ 9. Other Expenses 9,19,338 ------------------------------------------------------------ Total 2,55,07,817 ------------------------------------------------------------ 11. During the assessment proceeding before the AO, the assessee made an alternative plea saying that the disallowance be restricted to Rs. 87,37,126 (Rs. 2,55,07,817-Rs. 1,67,70,691). The AO relying on the decision of the Supreme Court in the case of Brooke Bond India Ltd vs. CIT (1997) 140 CTR (SC) 598 : (1997) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternative plea saying that the interest income of Rs. 1,67,70,691 from the application money being deposited in a separate bank account be reduced from the expenses and the disallowance be restricted to Rs. 87,37,126. He placed reliance on the decision of the Tribunal, Jodhpur, in the case of Neha Proteins Ltd. vs. Asstt. CIT (2004) 83 TTJ (Jd) 236. 14.1 We fail to see the logic behind the above plea because the scheme of the IT Act 1961 does not permit set-off of a capital expenditure against a revenue receipt. The total income of an assessee is chargeable to tax under s. 4 and the total income has to be computed in accordance with the provisions of the Act. Sec. 14 of the Act lays down that for the purpose of computation, income of an assessee has to be classified under five heads: (i) Salaries (ii) Income from house property (iii) Profits and gains of business or profession (iv) Capital gains (v) Income from other sources 14.2 The computation of income under each of the five heads of income has to be made independently and separately. There are specific rules of deduction and allowances under each head. No deduction, adjustment or set off of any income or expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC) 276 : (1999) 236 ITR 315 (SC). The Tribunal, Jodhpur, while giving its decision placed reliance on the decision of the Supreme Court in the case of Bokaro Steel Ltd. 14.7 In the case of Bokaro Steel Ltd. the issue was about the set off of capital receipts against capital expenditure. In the present case, on the other hand, the issue is about the deduction of capital expenses from revenue receipts. Manifestly, the facts of the present case are different from those in the case of Bokaro Steel Ltd. Therefore for the reasons discussed in the above paras the ground No. 5.2 is rejected. 15. The grounds Nos. 5.3 and 5.4 raise yet another alternative plea saying that the expenditure be considered for deduction under s. 35D. The CIT(A) has mentioned this ground in para 24 of his order, but while dismissing this ground in para 25 of his order he did not give any reason. The order of CIT(A), on this point, is not a speaking order. 16. In ground No. 10 the assessee has raised yet another alternative plea challenging the AO's action of taxing the interest receipts of Rs. 1,67,70,691 under the head 'Income from other sources'. The CIT(A) has noted in para 49 of his order that no argume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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