TMI Blog2014 (7) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Act – Deduction of excise and customs duties paid –Deduction u/s 80HH/80I/80IA of the Act - Claim for deduction of profits of the new LPG Bottling Plants commissioned – Held that:- The decision in assessee’s own case for the previous year has been followed, AO disallowed the claim regarding right to use technical know-how u/s 37(1) and also denied the claim for 1/6th u/s 35AB - the AO is directed to allow the claim – AO is directed to allow deduction for entire amount of excise duty and custom duty paid by the assessee irrespective of the excise duty and custom duty included in the valuation of assessee’s closing stock at the end of the accounting year - Decided in favour of Assessee. Repairs & maintenance, telephone and telegram expenses, property tax of guest house – Held that:- The decision in Britannia Industries Limited Versus Commissioner of Income-Tax And Another [2005 (10) TMI 30 - SUPREME Court] followed - expenditure towards rent, repairs, maintenance of guest house used in connection with business is to be disallowed u/s. 37(4) because this is a special provision overriding the general provision – Decided against Assessee. - ITA Nos. 4435 & 4436/M/2003 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the CIT(A) erred in confirming the disallowance of ₹ 1,04,30,000/- being the expenditure incurred by the Appellants on the implementation of welfare projects under the 20 Point Programme of the Govt. of India, at the instance of their Administrative Ministry and also in discharge of their social obligation as a corporate citizen in the Public Sector, thereby disregarding the ratio of the decision of Supreme Court in the case of Shri Venkata Satyanarayana Rice Mills vs. CIT (223 ITR 101). 4. The Appellants submit that on the facts and in the circumstances of the case and on a proper interpretation of the Section 43B of the Income Tax Act, the CIT(A) erred in confirming the disallowance of Appellants' claim for deduction of ₹ 9,71,76,526/-, being excise and customs duties paid during the year and included in the value of the closing inventory of raw materials and finished goods, disregarding the decision of Bombay High Court decision in the case of CIT vs BPCL (252 ITR 43). 5. The Appellants submit that on the facts and in the circumstances of the case and on a propel interpretation of the Section 37(4) of the Income Tax Act, the CIT(A) erred in confirming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997-98, to substantiate that the similar issue raised vide ground No.1 in the present appeal has already been decided in favour of the assessee has restored the matter to the file of the AO with a direction to allow the claim on the basis of actuarial report. The ld. DR has also fairly admitted that the issue has been decided in favour of the assessee in the earlier assessment year. The relevant findings of the Tribunal on the issue, for the sake of reference, are reproduced below : 9. We have heard the arguments of the two sides and perused the impugned orders and the material placed before us. The post retirement medical benefit is a provision, which has become a must for all the concerns, specially where there are health hazards. It is because of these reasons, the Government has notified that post retirement medical benefit be allowed. We have seen from the papers appended in the APB that a service contract is worded in such a way that these benefits are integral part of the contracts and the liability gets attached, the moment a service contract is signed, inducting a new employee. The argument of Senior Counsel is, therefore, well founded. We shall also, refer to the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the similar issue, raised vide ground No.2 in the present appeal, has already been decided by the said decision in favour of the assessee. The relevant portion of the said decision of the Tribunal dated 31.7.2012 relating to the issue in consideration are reproduced as under: 9.1 The learned Senior counsel has submitted that for the assessment year 1993-94 the Assessing Officer disallowed the claim regarding right to use technical know-how under section 37(1) and also denied the claim for 1/6th under section 35AB on the ground that the assessee is in appeals. Thus, the learned senior counsel has submitted that if the claim under section 35AB is allowed for 1/6th of the amount, then the assessee does not press the allowance of the claim at 100% under section 37(1). 9.2 The learned A.R. has no objection, if the ground number 1 for the assessment year 1993-94 is dismissed as not pressed. 10. Accordingly, we dismiss the ground number 1 for the assessment year 1993-94 being not pressed and the Assessing Officer is directed to allow the claim under section 35AB to the extent of 1/6th of the amount for the assessment year 1993-94, 1994-95 and 1995-96 as it was allowed in the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for the earlier assessment years i.e. assessment years 1991-92 and 1992-93 in ITA No.6663/M/97 and ITA No.1562/M/1996 respectively. Ground No.5 13. Ground No.5, as reproduced above, is relating to additional disallowance of repairs maintenance, telephone and telegram expenses, property tax of guest house. The ld. A.R. of the assessee has been fair enough to admit that the issue raised vide ground No.5 is decided against the assessee by the co-ordinate bench of the Tribunal, in the case of Platinum Asset Management Ltd. decided on 20 February, 2014, relying upon the decision of the Hon ble Supreme Court in the case of Britannia Industries Ltd. vs. CIT (2005) 278 ITR 546 (SC) wherein it has been held that expenditure towards rent, repairs, maintenance of guest house used in connection with business is to be disallowed u/s. 37(4) because this is a special provision overriding the general provision. 14. Accordingly, keeping in view of the judgment of the Hon ble Supreme Court in the case of Britannia Industries Ltd. vs. CIT (supra) ground No.5 of the appeal is disallowed. Ground No.6 15. Ground No.6, as reproduced above, is relating to the short allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of ITO vs. Wanson India Ltd. (5) ITO 102 and Voltas Ltd. Vs. DCIT (61 ITJ 543). 2. The Appellants submit that on the facts and in the circumstances of the case and on a proper interpretation of the Section 37(1) read with section 35AB of the Income Tax Act, the CIT(A) erred in confirming the disallowance of 56,812,635 being the expenditure incurred for acquiring the right to use the know-how obtained from M/s. Exxon Research Engg. Co., USA thereby ignoring the decision of Supreme Court in the case of Alembic Chemicals Works Co. Ltd. (177 ITR 377) and Wavin India Ltd. as well as Gujarat High Court decision in the case of CIT vs. Suhrid Geigy Ltd. (220 ITR 153). 3. The Appellants submit that on the facts and in the circumstances of the case and on a proper interpretation of the Section 37(1) of the Income Tax Act, the CIT(A) erred in confirming the disallowance of ₹ 24,524,063 being the expenditure incurred by the Appellants on the implementation of welfare projects under the 20 Point Programme of the Govt. of India, at the instance of their Administrative Ministry and also in discharge of their social obligation as a corporate citizen in the Public Sector, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n given by Dept. of Legal Affairs in Appellants' own case. Ground No.1 19. The issue involved in this ground relating to the post retirement medical benefit is identical to the issue raised above vide ground No.1 in ITA No.4435/M/2003 for A.Y.1996-97. In view of our observations and findings given above, the AO is directed to allow the claim on the basis of actuarial report in accordance with the direction given by the Tribunal in the own cases of the assessee for earlier assessment years as discussed above. Ground No.2 20. The issue involved in this ground relating to the right to use technical knowhow disallowance is identical to the issue raised above vide ground No.2 in ITA No.4435/M/2003 for A.Y.1996-97. In view of our observations and findings given above, this issue is decided accordingly with a direction to the AO to allow the claim under section 35AB to the extent of 1/6th of the amount for the current assessment year also. Ground No.3 21. The issue involved in this ground relating to the disallowance of expenditure on 20 point programme is identical to the issue raised above vide ground No.3 in ITA No.4435/M/2003 for A.Y.1996-97. In view of our obse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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