TMI Blog2012 (10) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings - Held that:- As decided in CIT Versus Hayward Waldia Refinery Limited [1992 (7) TMI 5 - CALCUTTA HIGH COURT] section 80VV seeks to restrict the allowance in respect of expenditure incurred by an assessee in respect of a specific proceeding under the Income-tax Act having no application in relation to remuneration or fees paid by an assessee to a tax consultant or other adviser for giving general advice in relation to taxation matters - Thus in the present case the disallowance made is deleted - in favour of assessee. Disallowance of Bhanwad Prospecting Survey expenses - Held that:- As the disallowance of Bhanwad Prospecting Survey expenses, it has been consistently held by the Tribunal in earlier assessment years that the assessee is entitled to the deduction u/s 35E, thus following the same the A.O. is directed to follow the orders of the Tribunal - in favour of assessee. Disallowance of repairs to building and machinery - Held that:- All these renovation and repairs were carried out by the assessee in its facilities available at the salt pans of the assessee are all essential repair and maintenance expenditure. Nothing is procured and embedded as new. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance - in favour of assessee. Disallowance of payment of Tata Sons, Cess charges and various items individually costing - Held that:- As assessee before the CIT(A) has filed detail note who without considering the same has decided the issue against the assessee, thus the issue should be restored back to the file of the A.O. - in favour of assessee for statistical purposes. Disallowance of interest paid on borrowings - Held that:- The assessee company was having its own funds aggregating to Rs. 160.73 crores as on 31-3-1985 and out of it, the assessee has advanced Rs. 3.58 crores, was not controverted. Thus as per decision in Munjal Sales Corporation Versus CIT [2008 (2) TMI 19 - SUPREME COURT] the Appellate Tribunal ought to have held that the loan given was from the assessee’s own funds - in favour of assessee. Disallowance of forfeiture of security deposits/performance guarantee deposit - Held that:- There is no dispute that the assessee has received Rs. 1,41,51,010/- towards full value of sale of 5000 MTs. of Soda Ash. However, there is no material on record to show the date of entry of consideration of the sale price recorded i.e. at the time of delivery of goods o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,26,57,190/- vide order dtd. 22-3-1988 passed u/s 143(3) of the Income Tax Act, 1961 (the Act). On appeal, the ld. CIT(A), however, partly allowed the appeal. 3. Being aggrieved by the order of the ld. CIT(A) the assessee and the Revenue both are in appeal before us. ITA No. 5181/Mum/2002 (Assessee s appeal). 4. Ground No. 1(a to f) are against the sustenance of disallowance of Rs. 30,73,662/- u/s 37(3A) of the Act. 5. Brief facts of the above issue are that in the revised computation of income, the assessee disallowed u/s 37(3A) of the Act Rs. 3,02,842/- being 20% of Rs. 15,14,212/-. However, the A.O. found that the assessee has not included various expenses disallowable u/s 37(3A) of the Act and accordingly the A.O. after discussing the issue at pages 2 to 5 of the assessment order, disallowed Rs. 30,73,662/- being 20% of Rs. 1,53,68,309/- and added the same to the total income of the assessee. On appeal the ld. CIT(A) while agreeing with the views of the A.O. confirmed the disallowance made by the A.O. 6. At the time of hearing, the ld. Sr. Counsel for the assessee while stating that due to smallness of the amount of Rs. 6804/- being 20% of Rs. 34,020/- of rent paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under the provisions of section 37(3A) of the Act because the very purpose of this expenditure is advertisement and accordingly he disallowed Rs. 86,803/- being 20% of Rs. 4,34,014/-. On appeal the ld. CIT(A) upheld the disallowance made by the A.O. 12. Brief facts of the issue in ground No. 3 are that the A.O. observed that the assessee while working out the disallowance under Rule 6D has taken into consideration only lodging, boarding and daily allowance but has excluded other expenses such as conveyance, tips, coolie charges etc. The A.O. was of the view that the stand of the assessee cannot be accepted because the expression used in Rule 6D is expenditure incurred in connection with traveling which will include all expenses in connection with traveling other than fare. Undoubtedly the expenses not considered by the assessee are in connection with the travelling and hence are to be taken into account while working out disallowance and accordingly the A.O. made a disallowance of Rs. 2,96,950/-. On appeal, the ld. CIT(A) while relying on the decision of Hon ble jurisdictional High Court in the case of CIT vs. Chemet (1999) 240 ITR 624 (Bom) wherein it has been held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14,24,078/-. 17. Brief facts of the above issue are that the A.O. noted that basically the guest house expenditure are intimately related to the maintenance of guest house covered u/s 37(4) of the Act. He further held that this expenditure is not incurred at the place of and during the course of the working hours in the office and factory and accordingly he disallowed the same. On appeal the ld. CIT(A) while observing that this issue is covered against the assessee, confirmed the disallowance made by the A.O. 18. At the time of hearing the ld. Sr. Counsel for the assessee very fairly submits that the amount of Rs. 14,24,078/- consists of three items namely (a) salaries wages to staff Rs. 4,12,247/-, (b) repairs and renovation expenses Rs. 2,17,675/- and (c) food expenses (net of recoveries) Rs. 7,94,156/- aggregating to Rs. 14,24,078/-. He further submits that on the disallowance of salary wages to staff Rs. 4,12,247/- and repairs and renovation expenses Rs. 2,17,675/-, he has no case. As regards the disallowance of food expenses Rs. 7,94,156/-, he submits that this issue is covered in favour of the assessee by the order of the Tribunal in assessee s own case in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23. That being so and in the absence of any other supporting material placed on record by the ld. Sr. Counsel for the assessee, the ground taken by the assessee is, therefore, rejected being not pressed/survived. 24. Ground No. 6 is against the sustenance of disallowance of incentive bonus of Rs. 1,90,743/- paid to the workers for exceeding fixed targets. 25. Brief facts of the above issue are that the A.O. observed that the assessee has debited Rs. 1,90,747/- towards incentive bonus paid to the workers which is over and above the bonus payable under The Payment of Bonus Act as well as under the existing agreement between the assessee and employees/workers. He further observed that it is also not covered under the provisions of section 36(1)(ii) of the Act. He further observed that on similar facts an amount of Rs. 1,58,830/- was disallowed in A.Y. 1984-85, therefore, for the same reason he disallowed Rs. 1,90,747/-. On appeal the ld. CIT(A) while agreeing with the views of the A.O., confirmed the disallowance made by the A.O. 26. At the time of hearing the ld. Sr. counsel for the assessee submits that this amount is allowable u/s 37(1) of the Act since it is remuneration to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same. 31. At the time of hearing the Sr. ld. counsel for the assessee submits that the above amount represent fees paid to various Advocates and consultants in connection with the conferences, advice and consultation pertaining to Income-tax matters. These payments do not represent any fees paid in respect of any proceedings before the Income-tax Authorities and, therefore, not covered u/s 80VV of the Act and hence the same are allowable. The reliance was also placed in CIT v. Hayward Waldia Refinery Ltd. (1995) 78 Taxmann 558 (Cal), Lakhanpal National Ltd. vs. ITO (1994) 69 ITD 9 (SB) and CIT v. United Commercial Bank Ltd., (1991) 189 ITR 57 (Cal). 32. On the other hand the ld. D.R. supports the order of the A.O. and the ld. CIT(A). 33. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that the above amount of Rs. 27,650/- was paid by the assessee to various Advocates and Consultants in relation to conferences, advice and consultation pertaining to Income-tax matters, therefore, the said payments do not fall within the purview of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the separate deduction of Rs. 5,000 allowed by the Income-tax Officer under section 80VV of the Act shall stand withdrawn." 7. The Revenue, in this question, has not assailed the finding of fact by the Tribunal. The Tribunal has found as a fact that the remuneration in excess of Rs. 5,000 paid to Sri Nadar is not for any services rendered by him of the nature referred to in section 80VV and the remuneration was paid by the assessee to Mr. Nadar in his capacity as a tax consultant or adviser for giving general advice in relation to taxation matters. This finding has gone unchallenged. Therefore, we cannot but answer the second question in the affirmative and in favour of the assessee. 35. Similar view has been taken in Lakhanpal National Ltd. (supra) and United Commercial Bank Ltd., 189 ITR 57 (Cal) (supra). 36. In the absence of any distinguishing feature brought on record by the Revenue, we respectfully following the above decisions and the consistent view, hold that the above expenses claimed by the assessee do not fall within the purview of Section 80 VV of the Act and accordingly the disallowance of Rs. 27,650/- made by the A.O. and sustained by the ld. CIT(A) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not related to repairs but in the nature of capital expenditure. 43. As regards the disallowance of foreign travel expenses, the A.O. observed that the assessee has not filed the details to prove that the foreign tour was in connection with the business of the assessee. The expenditure relates to the discussion about the purchase/manufacture of plant and machinery required for setting up of fertilizer complex for Tata Fertilizers which is a subsidiary company and, hence, not allowable in the hands of the assessee and other expenses are related to the discussion with the supplier which are also not allowable, therefore, the A.O. treated the expenses of Rs. 7,23,268/- as capital expenditure. 44. As regards the disallowance of expense of Rs. 6,86,000/- on convertible debentures, the A.O. noted that Rs. 6,86,000/- was incurred on conversion of convertible debentures into shares related to expansion of capital base and, hence, he treated the same as capital expenditure. 45. As regards the Bond issue expenses of Rs. 1,62,846/-, the A.O. observed that convertible debentures were issued in the accounting year 1983-84 but the relevant bills were received in this year. In the A.Y. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5728/M/2004 for A.Y. 1996-97 order dtd. 17-8-2007 that the assessee is entitled to the deduction u/s 35E of the Act. Respectfully following the same, we direct the A.O. to follow the orders of the Tribunal (supra) and allow the same accordingly. We hold and order accordingly. The ground No. 9(i) is, therefore, partly allowed. 53. As regards the disallowance of repairs to building and machinery, we find merit in the plea of the ld. Sr. Counsel for the assessee that the Tribunal in assessee s own case in ITA No. 4242/M/1999 for A.Y. 1983-84 order dtd. 9- 5-2006 has treated the similar expenses as revenue expenditure vide finding recorded in para 19 of order which is reproduced as under:- 19. We have considered the matter in detail. First let us examine the nature of expenses incurred by the assessee. The expenses were incurred by the assessee in renovating callendria, hydrator civil engineering works, extension of structure of hydrator civil engineering works, civil work foundations, renovation of kiln shade, renovation of drag elight conveyor, conversion of AV pumps, platform shed, emergency staircase from lime stols, etc. etc. All these renovation and repairs were carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l expenses of Rs. 7,23,268/- treated as capital expenditure. We hold the order accordingly. The ground taken by the assessee is, therefore, allowed. 58. Ground No. 11 is against the sustenance of disallowance of Rs. 1,35,633/- u/s 40A(3) of the Act. 59. Facts of the above issue are that the A.O. observed the details of payments exceeding Rs. 2500/- are shown in Exit-A of the Tax Audit Report. According to the A.O. since the payment on LTA Rs. 63,699/-, salary advance Rs. 13,600/- travel and entertainment etc. Rs. 26,781/-, foreign exchange payment Rs. 6,435/-, medical expenses Rs. 5000/-, advance payment to workers Rs. 4,000/-, taxi hire charges Rs. 8,596/- and maternity allowance Rs. 2,532/- aggregating to Rs. 1,35,633/- are exceeding Rs. 2,500/-, therefore, he disallowed the same u/s 40A(3)of the Act. On appeal the ld. CIT(A) while observing that the appellant has furnished nothing to indicate that the payments were made in exceptional or unavoidable circumstances and genuineness of the payment and identity of the payee are also not proved, confirmed the disallowance made by the A.O. 60. At the time of hearing the ld. Sr. Counsel for the assessee submits that these payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the sustenance of disallowance of expenses on fish and prawn culture Rs. 1,66,610/-. 67. Brief facts of the above issue are that the A.O. noted that the assessee has debited an amount of Rs. 13,159/- and Rs. 1,74,458/- under the head community welfare and general expenses respectively. These expenses are on fish and prawn culture. The assessee was carrying on the research and development work for the development of fish and prawns with the intention that it could take up the activities of fish and prawns culture on commercial basis. The assessee has credited in profit and loss account under the head sundry receipts by an amount of Rs. 21,008/-. Therefore, the A.O. disallowed the net receipt of Rs. 1,66,610/- as according to him it does not relate to the business of the assessee and it is for the development of the new line of business and also for the reason that the similar disallowance was made in the past year. On appeal the ld. CIT(A) while agreeing with the views of the A.O. upheld the disallowance made by the A.O. 68. At the time of hearing the ld. Sr. Counsel for the assessee submits that the expenses incurred by the assessee are not for the new line of business but pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40/- was made u/s 43B of the Act. On appeal the ld. CIT(A) upheld the disallowance made by the A.O. 73. At the time of hearing the ld. Sr. Counsel for the assessee submits that the issue relating to interest on outstanding electricity duty amounting to Rs. 11,53,066/- is neither tax nor duty, hence, does not fall within the ambit of section 43B of the Act. He further submits that this issue is covered in favour of the assessee by the order of the Tribunal in assessee s own case for A.Y. 1984-85. As regards the issue of Central Sales Tax and Gujarat Sales Tax, he submits that the Tribunal in assessee s own case for 1984-85 has restored this issue back to the file of the A.O. to verify the payment and if it is found that the payments are made within the time as provided under the law, then, the deduction should be allowed. 74. On the other hand the ld. D.R. supports the order of the ld. A.O. and the ld. CIT(A). 75. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. Sr. Counsel for the assessee that the Tribunal in assessee s own case for A.Y. 1984-85 (supra) vide para 13.1.1. of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing the ld. Sr. Counsel for the assessee submits that the A.O. was not justified in making adhoc disallowance of Rs. 2 lacs out of the total payment of Rs. 23,74,597/- to Tata Services Ltd. He further submits that this issue is also covered in favour of the assessee by the order of the Tribunal in assessee s own case for assessment years 1983-84 and 1984-85. He, therefore, submits that the disallowance made by the A.O. and sustained by the ld. CIT(A) be deleted. 83. On the other hand the ld. D.R. supports the order of the A.O. and the ld. CIT(A). 84. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that similar disallowance was also made in A.Y. 1984-85. The Tribunal in assessee s own case in ITA No. 4194 and 4137/M/2001 for A.Y. 1984-85 order dtd. 27-12-2007 following the Tribunal order in A.Y. 1983-84 allowed the deduction to the assessee. In the absence of any distinguishing feature brought on record by the Revenue, we respectfully following the order of the Tribunal (supra) hold that the A.O. was not justified in making adhoc di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue is set aside to the file of the A.O. 92. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that the impugned disallowance was made by the A.O. on the ground that the assessee has failed to file relevant material before him. However, before the ld. CIT(A) the assessee has filed detail note (supra) and the ld. CIT(A) without considering the same has decided the issue against the assessee. Since this issue has not been properly examined by the A.O. and the ld. CIT(A), therefore, we are of the view that, in the interest of justice, the issue should be restored back to the file of the A.O. and accordingly we set aside the order passed by the Revenue Authorities on this account and send back the matter to the file of the A.O. to decide the same afresh in the light of our observation hereinabove and according to law after providing reasonable opportunity of being heard to the assessee. The ground taken by the assesse is, therefore, partly allowed for statistical purpose. 93. Ground No. 20 is against the sustenance of disallowance of Rs. 23,33,000/- out of interest paid on borrowings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 160.73 crores as on 31-3-1985 and out of it, the assessee has advanced Rs. 3.58 crores, was not controverted by the Revenue even at this stage. 98. In CIT vs. Reliance Utilities Power Ltd. (2009) 313 ITR 340 (Bom) it has been held (Headnotes): Held, dismissing the appeal, that if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments. In this case this presumption was established considering the finding of fact both by the Commissioner (Appeals) and the Tribunal. The interest was deductible. 99. In Munjal Sales Corporation vs. CIT (2008) 298 ITR 298 (SC) it has been held (Headnote): Held, also, that since the opening balance of the profits of the assessee-firm as on April 1, 1994, was Rs. 1.91 crores, and the profits were sufficient to cover the loan given to a sister concern of Rs. 5 lakhs only, the Appellate Tribunal ought to have held that the loan given was from the assessee s own funds . 100. Respectfully following the above decisions and kee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny loss as a result of rise in prices of Soda Ash in the market and non fulfillment of assessee s commitments to its regular dealers. It is supported by the averments in the agreement itself. At clause 1 of the agreement dt. 31.1.85 it is mentioned, ............... it being clearly understood that as soon as our own imported material arrives, this quantity of 5000 tonnes shall be returned to you, or upon your mandate to actual users at a price not exceeding the price prevailing then for Tata Soda Ash. At a latter stage, the agreement at page 2 column 3 reads in the event of a breach of this guarantee, the aforesaid sum of Rs.50 lacs shall stand forfeited . It is, therefore, clear that receipt of Rs.50 lacs is during the course of trading activities of the assessee and has intimate nexus with normal business and hence is in the nature of trade receipts taxable as income. It may be worthwhile to mention that the ratio of Supreme Court s decision in the case of Chowranghee Sales Bureau 87 ITR 542 and Sinclair Murrey Co. 97 ITR 675. The Hon ble Supreme Courts observation indicated that an amount received during the course of normal business activities of assessee is a trade rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forfeited the deposit for nonperformance and claimed it as capital receipt exempt from tax. The Income-tax Officer discussed this issue in Assessment Order at Page 20 of the Assessment Order. The Appellant s contentions were rejected on following grounds:- Rs.50,00,000/- was received by Appellant in the course of its business activity relating to trading. The amount of Rs. 50,00,000/- was to secure its interest in stock and was basically to ensure any loss as a result of a rise in price of Soda Ash in the market and non-fulfillment of Assessee s commitments to its regular dealers. It is considered as trade receipt applying the ratio of Supreme Court s decision in case of Chowringhee Sales and Sinclaire Murray Co. The CIT(A) confirmed the action of A.O. and stated in his order as under: It is settled law that the amount received as compensation for breach of trading contract or for the loss of earnings as distinct from the loss of source of earnings, is a trading receipt. Reliance is placed on the following case laws: i) CIT V/S. Mannaji Co. 86 ITR 29 (SC) Money received on requisition of timber sheds on leasehold land as an award of compensation by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... performance guarantee deposit is a trade receipt. Since there was no trading arrangement between TCL and HLL, the deposit received and subsequently forfeited was on account of non-fulfilment of commitment, hence, the same is a capital receipt not chargeable to tax. Apart from this, the mere fact that the assessee has made an entry of transfer in the accounts unilaterally will not enable the Department to say that Section 41(1) would apply. In this context, your attention is invited to explanation 1 to Section 41 which is applicable from 01.04.1997 whereas our issue pertains to A.Y. 1985-86. Your attention is also invited to the decision of Apex Court in CIT V/s. Sugauli Sugar 236 ITR 518. The ld. Sr. Counsel for the assessee while distinguishing the decisions relied on by the A.O. and ld. CIT(A), relied on the following cases:- (i) Omega Bright Steel, 11 ITD 404, page 388 Headnote (ii) CIT vs. AVM Ltd. 146 ITR 355 (Mad) page 397 Headnote (iii) State Trading Corporation 26 TTJ 506 (Jab) page 401 Headnote 402 and (iv) ACIT vs. Das Co. (2010) 133 TTJ (Mum) 542. He, therefore, submits that since the receipt of Rs. 50 lacs did not bear the character of trading receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all circumstances. They further confirmed that in the event of breach of this guarantee, the deposit of Rs.50 Lakhs would stand forfeited. (iv) The amount deposited was to be treated as a lump sum, and was not to be reduced in the event of there being any partial delivery by way of return of Soda Ash. Immediately on receipt of letter dated 31 January 1985 from HLL, TCL confirmed the arrangement by their letter of same date and thereafter HLL forwarded to TCL a sum of Rs. 50 Lakhs towards the guarantee deposit, and also sent two further cheques for an aggregate amount of Rs.1,41,51,0l0/-, towards the full value of 5,000 tones of Soda Ash, under cover of their letter dated 31 January 1985. TCL informed HLL by their letter dated 4 March 1985 that in terms of the arrangement they would have to return 5,000 tonnes of Soda Ash, latest by 31 March, and such quantity would have to be dispatched by HLL directly to various customers of TCL in Gujarat State. By their further letter dated 21 March 1985, TCL confirmed to HLL that as desired by them, TCL had dispatched 5,000 tonnes of Soda Ash to various HLL factories in India. HLL could not return the material by 31 March 1985, and accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction is taxable income. But the difficulty arises in ascertaining whether what is received in a given case is compensation for loss of a source of income or profit in a trading transaction. In Oberoi Hotel Pvt. Ltd. v. CIT [1999] 236 ITR 903 (SC), it was held that the amount received by the assessee for giving up its right to purchase and/or to operate the property or for getting it on lease before it was transferred or let out to other persons was in the nature of a consideration . It was not for settlement of rights under a trading contract but the injury was inflicted on the capital asset of the assessee and giving up the contractual right on the basis of the principal agreement had resulted in loss of source of the assessee s income and it was a capital receipt. Whether a payment of compensation for termination of an agency is a capital or revenue receipt has to be considered by finding out whether the agency was in the nature of a capital asset in the hands of the assessee or whether it was only part of his stock-in-trade (see CIT v. Rai Bahadur Jairam Valji [1959] 35 ITR 148 (SC)). Compensation for injury in trading operations, arising from breach of contract or in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all depends upon the factual position whether forfeiture related to a capital asset or was a part of the stock-in-trade en- compassed by trading activity. 111. Under The Sale of Goods Act, 1881, sale means transfer of property from one person to another in consideration of the price paid or promise or other valuable consideration. Applying the above law we find that there is no dispute that the assessee has received Rs. 1,41,51,010/- towards full value of sale of 5000 MTs. of Soda Ash and has accounted for the same in the books of accounts as sales. However, there is no material on record to show the date of entry of consideration of the sale price recorded i.e. at the time of delivery of goods or receipt of sale value of Rs. 1,41,51,010/- or at a later stage i.e. on or before 31-3-1985. We further find that it has been agreed upon by the parties that Soda Ash was to be returned by the HLL to the assessee company out of its imported consignment. However, there is no material on record to show as to whether the HLL has received the imported consignment of Soda Ash on or before 31-3-1985. There is also no material on record as to whether any effort was made by the HLL to retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70/- as per letter dtd. 26-2-1988. The assessee company has enhanced its claim by Rs. 5,36,896/- which was claimed on exchange loss. According to the A.O. since the exchange loss is not plant and machinery, the claim in this regard is not allowable. He further observed that certain items are related to the civil work nature which are not integral part of plant and machinery. Therefore, the A.O. disallowed the claim of investment allowance of Rs. 54,58,163/-. On appeal the ld. CIT(A) upheld the disallowance made by the A.O. 117. At the time of hearing the ld. Sr. Counsel for the assessee submits that the addition to various sections of plant/factory viz. salt work, power transmission lines in salt work, weighbridge and civil work for installation of machinery has been considered in the nature of civil work, not integral part of plant and machinery on which investment allowance was not allowed by the A.O. However, he submits that on the similar issue the Tribunal in assessee s own case for A.Y. 1984-85 (supra) has set aside the issue to the file of the A.O., therefore, the issue may be set aside to the file of the A.O. 118. On the other hand the ld. D.R. supports the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - to various restaurants in Bombay towards food subsidy, The system in this regard is that coupons are issued to the employees who will give these coupons to the specified restaurants and have food, snacks etc. According to the A.O. the nature of expenditure remains expenditure on food etc. paid to the restaurants for the employees and, therefore, the amount is covered u/s 37(2A) of the Act because the expenditure is incurred not in the office nor in the factory nor at the place of working of the employee and, hence, he disallowed an amount of Rs. 3,32,457/- after allowing statutory deduction u/s 37(2A) of the Act. On appeal the ld. CIT(A) following the order for the assessment years 1994-95 and 1995-96, however, deleted the addition made by the A.O. 128. At the time of hearing the ld. D.R. supports the order of the A.O. 129. On the other hand, the ld. Sr. Counsel for the assessee submits that this issue is covered in favour of the assessee by the decision of the Tribunal in assessee sown case for the assessment years 1995-96, 1996-97 and 1993- 94. He further submits that the Departmental appeal on the identical issue has been rejected by the Hon ble jurisdictional High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that the assessee has made payment of Rs. 5 lacs to the Indian Institute of Chemical Engineers, Calcutta which is covered under the provisions of section 35(1)(ii) of the Act. In the absence of any material to show that the expression u/s 35(1)(ii) that any sum paid to a scientific research association does not include the payment made by the assessee or such payment is not allowable, we are of the view that the ld. CIT(A) was fully justified in deleting the disallowance made by the A.O. The ground taken by the Revenue is, therefore, rejected. 136. Ground No. 3 is against the deletion of disallowance of Rs. 261500/- made on account of contribution to Institutions. 137. Brief facts of the above issue are that the A.O. noted that the assessee has debited the following amounts as sundry contributions:- i) Mithapur Nutan Bal Sikshan Sang Rs. 1,60,000/- ii) Kindergarten Primary School Rs. 1,00,000/- iii) Primary School, Mithapur Rs. 1,500/- Total Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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