TMI Blog2010 (5) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee: Sh. Ajay Vohra, Adv., Ms. Neha Khemka, Adv., Sh. Virender Sharma, Gm Ms. Shikha Sharma, Adv. For the Department : Sh. Stephen George, C.I.T. (D.R.). ORDER PER SHAMIM YAHYA (ACCOUNTANT MEMBER).- This appeal by the Revenue and the cross-objection by the assessee emanate out of the order of the learned Commissioner of Income-tax (Appeals) dated May 25, 2009 pertaining to the assessment year 2005-06. 2. It is noted that there is a delay of 30 days in filing the cross-objection. Upon perusal of the reasonable cause of delay in filing the cross-objection, we are inclined to condone the same. The delay is hence condoned. 3. The ground raised in the Revenue's and the assessee's cross-objection read as under: Revenue's appeal : 1. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the addition made under section 43B(b) of the Income-tax Act, 1961, amounting to Rs. 21,31,56,460 being the provision for pension based on actuarial valuation. 2. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue's appeal are covered in favour of the assessee by the earlier Tribunal's decisions. Ground No. 6 of the Revenue's appeal and ground No. 1 of the cross-objection of the assessee is covered in favour of the Revenue and against the assessee by the earlier Tribunal's decision. Ground No. 2 of the cross-objection is covered in favour of the assessee by the apex court decision. The appeal number, date of the order and concluding portion of the relevant adjudication of the Tribunal is as under: 5. Ground No. 1 of the Revenue's appeal. The identical issue was decided by the Tribunal in I. T. A. No. 2613/Del/2004 and others in the assessee's own case vide order dated June 12, 2009 (Ranbaxy Laboratories Ltd. v. Addl. CIT [2009] 124 TTJ (Delhi) 771) wherein the Tribunal has held as under : 16. We have carefully considered the rival submissions. This issue is found to be covered by the aforementioned decision of the Tribunal in the assessee's own case for the assessment year 1999-2000. For the sake of clarity the relevant portion from the said order is reproduced below: The next dispute in the Revenue's appeal for the assessment year 1999-2000 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecedent, we uphold the order of the learned Commissioner of Income-tax (Appeals) and decide the issue in favour of the assessee. 7. Ground Nos. 3 and 4 of the Revenue's appeal. The identical issue was decided by the Tribunal in I. T. A. No. 3871/Del/2004 and others vide order dated June 12, 2009 (Ranbaxy Laboratories Ltd. [2009] 124 TTJ (Delhi) 771) wherein the Tribunal has held as under: 51. We have carefully considered the rival submissions in the light of material placed before us. It is not disputed that demand was raised against the assessee by NPPA. The said demand was also enforced but the assessee approached the hon'ble High Court and part payment was also made during the year to fulfil the directions of the hon'ble High Court. Thus, the demand had not only arisen during the year but it was a quantified and crystallised demand enforceable in law. Thus, it was a statutory liability which was to be paid by the assessee within the stipulated time saved if otherwise directed by higher court. Disputing the payment of liability by way of an appeal does not disentitle the assessee to claim that demand as an expenditure as what is sought by the assessee who is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of its claim for weighted deduction in respect of these expenses : 1. CIT v. Smith Kline and French (India) Ltd. [1994] 77 Taxman 153 (Karn). 2. Vijay Seeds Co. P. Ltd. v. Asst. CIT [2001] 79 ITD 233 (Pune). 3. Claris Lifesciences Ltd. v. Asst. CIT [2008] 298 ITR (AT) 403 (Ahd); 112 ITD 307. 4. SmithKline Beecham Consumer Healthcare Ltd. (formerly known as HMM Ltd.) v. IAC 1089/Chd./87 (assessment year 198384). The learned Departmental representative, on the other hand, vehemently supported the impugned order. We have gone through the records. The expenditure has been incurred by the assessee on vehicles, computers and other assets, provided to its employees working at the approved research facilities and directly engaged in the research and development activities. The Assessing Officer, it may be pointed out, did not accept the claim of the assessee in respect of weighted deduction, without any discussion in his order. There is no dispute that the expenditure in question was incurred by the assessee in respect of research and development facilities which have been duly approved by the prescribed authority under section 35(2AB). Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay of any expenditure or incurring any liability for such expenditure. By issuing shares at below market price, the same does not result in incurring any expenditure rather it results in short receipt of share premium which the assessee was otherwise entitled to. Though the guidelines of SEBI requires the assessee to account for short receipt of share premium as employees compensation expense, for claiming such expense as allowable, the assessee has to qualify that expenses are incurred and the same are wholly and exclusively for the purpose of business. Here we find that by issuing shares at a price lesser than the market price, the assessee cannot be said to have incurred any expenditure rather it amounts to short receipt of share premium. The receipt of share premium is not taxable and hence any short receipt of such premium will only be a notional loss and not actual loss for which no liability is incurred. SEBI guidelines are relevant for the purpose of accounting but are not conclusive for the purpose of allowing the same as expenditure. In a case where the assessee contracts for sale of goods say at Rs. 100 per piece as against market price of Rs. 150 per piece, whether, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
