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TMI Blog2011 (2) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... f industrial undertaking of the assessee company? (2) The Hon'ble ITAT has not correctly appreciated the fact that appeal against the decision of Hon'ble Punjab and Haryana High Court in the case of M/s Impel Forge Pvt. Ltd. Ludhiana passed in ITA No. 543 of 2008 dated 5-12-2008 was not filed by the Department before the Hon'ble Supreme Court due to the reasons that the tax effect involved in that case was less than the monetary limits of Rs. 10 lakh for filing SLP as per CBDT Instruction No. 5 of 2008 dated 15-5-2008? (3) Whether on the facts and circumstances of the case, Hon'ble Income-tax Appellate Tribunal is justified in law in allowing deduction under section 80-IB on other miscellaneous income being misc. receipts, rebate & discount and balances written off etc., whereas such income is not 'derived from' the eligible business of industrial undertaking of the assessee company? (4) Whether on the facts and circumstances of the case, Hon'ble Income-tax Appellate Tribunal is justified in law in allowing depreciation on the assets which were not owned by the assessee company but were purchased in the name of MD of the company and his wife? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that same were in the name of M.D. of the company and his wife and not in the name of the assessee. (5) Depreciation on electrical installations claimed at the rate applicable to plant and machinery was not allowed on the ground that the electric installations were separate from plant and machinery attracting less rate of depreciation. (6) Dividend income though exempt under section 10(35) was not treated as exempt in absence of claim in the return following the judgment of Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1." 4. The CIT(A) partly allowed claim of the assessee which was upheld by the Tribunal except with regard to interest income and objection of the assessee was allowed by recording the following findings :- "Job Work.-Therefore, we affirm the finding of the CIT (Appeals) that the job work income has been earned by the assessee by carrying out manufacturing activities for outside parties, which are similar to those carried on by the assessee for manufacturing products for own sale. As a consequence, it follows that the labour/job work receipts have been earned by the assessee in the course of manufacturi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) held that the 'electrical installations' were to be treated as part of the plant and machinery and depreciation at the rate of 25 per cent was allowable. ** ** ** Revenue cannot be permitted to raise an issue in isolation in one year while accepting the finding on the same issue in assessee's own case of an earlier year. On the basis of the aforesaid, we find it expedient to dismiss the ground of appeal raised by the revenue. Dividend Income.-We have carefully perused the judgment of the Hon'ble Supreme Court and find that the same relates to the power of the Assessing Officer to entertain a claim not made in the return of income and therefore, it does not militate against the action of the CIT (Appeals) in having considered the impugned claim. In fact, relevant judicial pronouncement on this point is the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Rewari Central Cooperative Bank Ltd. [2003] 263 ITR 598. The Hon'ble High Court in this case, was dealing with a question as to whether the CIT (Appeals) was competent to adjudicate upon an issue which did not arise out of the order appealed and thereby holding that the income of the assessee was exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tze (India) Ltd. v. CIT [2006] 157 Taxman 1 was not applicable to such exemption as rightly held by the Tribunal. Accordingly, no substantial question of law arises. 8. In Income-tax Appeal No. 839 of 2010 apart from the questions proposed in Income-tax Appeal No. 840 of 2010, following additional substantial questions of law have been proposed :- "(1) Whether on the facts and circumstances of the case, the Hon'ble Income-tax Appellate Tribunal is justified in law in allowing assessee to write off 80 per cent of the cost of tools and dies not taking into account the date of purchase and without going into the merits of the case? (2) Whether on the facts and circumstances of the case, the Hon'ble Income-tax Appellate Tribunal is justified in law in treating designing and consultancy charges on tools and dies as revenue expenditure whereas actually it is capital expenditure? (3) Whether on the facts and circumstances of the case, the Hon'ble Income-tax Appellate Tribunal is justified in law in holding that there cannot be a presumption that certain expenditure is bound to have been incurred for earning exempt income when the Assessing Officer has rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and the same does not loss its revenue character merely because it is incurred in relation to tools/dies. The CIT (Appeals) has also noted that the impugned expenditure is related to the work done by the payee during the year. Considering the discussion made by the CIT (Appeals), we find no justification for the stand of the Assessing Officer and accordingly the ground raised by the revenue is dismissed." 11. The Assessing Officer held that for earning dividend income, the assessee must be presumed to have incurred some expenditure which had been disallowed under section 14A. On appeal, the CIT(A) held that in absence of evidence of any expenditure having been shown to have been incurred, disallowance under section 14A was not justified. This view has been upheld by the Tribunal. The Tribunal observed :- "25. Ground No. 4 is regarding disallowance under section 14A of the Act in relation to the exempt income earned by the assessee. In this regard, the facts are that the assessee had earned income by way of interest on UTI Bonds and dividend of Rs. 54,000 and Rs. 9,30,8912 respectively, which was exempted from tax. The Assessing Officer estimated a sum of Rs. 1,00,000 having b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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