TMI Blog2015 (5) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee is having cash profit of ₹ 51.65 crores, which is not contradicted by the revenue. So far as it relates to allowability or otherwise of deduction u/s. 32AB on the income of earlier years, town income and rental income from employees, learned CIT(A) has allowed the claim of the assessee for the reason that these form part of the business income. It is observed from the order passed by the learned CIT(A) that he has not given reasons for the same. Similarly, according to the assessee the dividend and interest income also could not be excluded as per the decisions relied upon by the learned AR. While deciding this issue also the learned CIT(A) has not considered any of the judicial pronouncements. Therefore, keeping in view the interest of justice, we are of the opinion that the issue requires to be restored back to the file of the CIT(A) with a direction to readjudicate the same in the light of the decisions relied upon by the AR after bringing all the facts on record. - Decided in favour of revenue for statistical purposes. Disallowance of convertible bonds/debentures - Held that:- Decided in favour of the assessee in assessee’s own case for A.Y. 1992-93. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O to restrict the disallowance to 50% of the expenditure incurred. Disallowance of expenses on fist and prawn culture - Held that:- Tribunal in assessee's own case for A.Y. 1985-86 followed the decision of the Tribunal in assesee’s own cae for A.Yrs. 1981-82 and allowed the claim. - Decided in favour of assessee. Disallowance under section 43B - royalty of limestone - Held that:- Royalty on limestone is restored to the file of the AO for verification of the payments as per the provisions of Sec. 43B and if it is found correct, then AO is directed to allow the deduction - Decided in favour of assessee for statistical purposes. Disallowance of expense incurred on new projects - This is for survey and market study of LAB a chemical agent used to be mixed with soda ash for making detergent powder/washing powder - assessee contented for balance amount of ₹ 24,000 which is incurred in respect of existing business - Held that:- Restore the issue to the file of the AO with a direction to verify the contention of the assessee that it was incurred for the existing business. On verification, if it is found that these expenses are incurred for existing business then the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasing tax free bonds. At the outset, the ld. A.R. of the assessee has submitted that under section 10(15)(iv)(h) the interest paid by a public sector company in respect of such bonds is exempt. He has further submitted that the interest paid on the amount deposited with the application money till the allotment of the bonds is also covered in this respect. He has further relied upon the decision of the Hon ble Delhi High Court in the case of CIT vs. Bharat Heavy Electricals Ltd. 352 ITR 88 wherein the Hon ble High Court has upheld the finding of the Tribunal that interest for the brief period between the date of application and allotment of bonds could not be taxed. 6. The ld. D.R. could not bring before us any contrary fact or case law which may justify departure from the above decision of the Hon ble High Court. In view of the above, the ground No.1 is allowed in favour of the assessee. 5. After hearing both the parties, respectfully following the aforementioned decision of the co-ordinate Bench in respect of the immediate preceding year, we allow ground no.1 in favour of the assessee. 6. Ground no.2 of the assessee s appeal is common with ground nos. 4 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue in ground no.4 of its appeal:- Income of earlier year Rs.56.35 lakhs Town income Rs.31.63 lakhs Rental income from employees ₹ 1.95 lakhs 9. As per the submissions made in the chart, the learned AR has relied upon the following decisions to contend that the assessee is entitled to deduction u/s. 32AB on the entire amount: Tata Yodogawa 67 ITD 174 (Pat) Highway Cycles India 1 SOT 176 (Chd) (SB) Diner s Club India Ltd. 248 ITR 679(Bom) Apollo Tyres vs CIT 255 ITR 273 (SC) Jindal Aluminium Ltd. 87 ITD 598 Mahavir Spinning Mills Ltd. 87 TTJ 400 Sukhjit Starch Chemicals Ltd. 85 TTJ 218 Tata Sons Ltd. ITA No.5742/M/02 for (AY 1990-91) The learned DR relying on the assessment order submitted that the AO has rightly disallowed deduction u/s. 32AB. He further agitated that the decision of the CIT(A) in holding that the assessee is entitled to deduction in respect of IDBI deposit and in respect of income of earlier year, town income and rental income from employees. 10. We have heard both the parties and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Tribunal dated 26.04.2013 in ITA Nos. 4564 4463/Mum/2003 for A.Y. 1986-87, copy of which is placed at Sr. No.4 of the paper-book. This issue has been discussed at para 18 to 21, which is reproduced below: 18. Ground no.6 relates to disallowance of ₹ 1,96,864/- incurred on issue of convertible bonds/debentures. 19. The AO has discussed this issue at page 5 para 12 of his order which has been confirmed by the Ld. CIT(A) at para 24.5 at page 84 of his order. 20. The Ld. Senior Counsel pointed out that this issue has been decided in favour of the assessee in assessee s own case for A.Y. 1992-93 by the Tribunal in ITA No.4604/M/96 21. We have carefully perused the said order of the Tribunal. We find that the Tribunal has discussed this issue at para 69 of its order and has allowed the debenture expenses. In the instant case, facts being identical, therefore respectfully following the decision of the Tribunal (supra), we direct the AO to allow the expenses on issue of debentures. This ground of the assessee is accordingly allowed. Accordingly, after hearing both the parties this ground is allowed in favour of the assessee. 14. Ground 5 of asessee s appeal r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decision, has observed as under: 17. The Ld. Senior Counsel pointed out that this issue has been decided in favour of the assessee in assessee's own case in ITA No. 4194 4137/M/01 for A.Y. 1984-85. We find that the assessee has been allowed depreciation on foreign exchange fluctuation loss by the Tribunal in ITA No. 4137/M/01 at para-15 page 12 of its orders. Facts and issues being identical, we accordingly direct the AO to allow depreciation as per law. As regards the second limb of ground No. 5 i.e. disallowance of investment allowance, we find that similar issue came up for hearing before the Tribunal in assessee's own case in A.Y. 85-86 in ITA No. 5181/M/02. This issue finds place in the order of the Tribunal (supra) at para 116, page-46 of its order. The Tribunal has given its finding at para- 119 and has followed the decision of the Tribunal in assessee's own case for A.Y. 1984-85 in ITA No. 4194/M/01 and directed the AO to allow the investment allowance on exchange loss treated as capital expenditure. Facts being identical, respectfully following the decision of the Tribunal (supra), we accordingly direct the AO to allow the investment exchange loss t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while dealing with the issue, has allowed this ground following the decision of the Jurisdictional High Court in the case of Reliance Utilities 313 ITR 340. The facts for this year being identical in nature, the AO is directed to decide this issue in the light of the earlier year s decisions in the own case of the assessee. Accordingly, after hearing both the parties, we direct the AO to decide the issue in light of the above decision in the assessee s own case. This ground is considered as allowed for statistical purposes in the manner aforesaid. 20. Ground no.10 relates to disallowance of foreign travel expenses amounting to 6,32,809. The break-up of the same is given in Annexure 1 of the chart filed before us. Out of this a sum of ₹ 3,16,976 relates to oil refinery, which was not pressed by the learned AR for the reason that these expenses were incurred for a new business. Balance amount of ₹ 3,15,873 relates to existing business. It is the contention of the AR that out of the total disallowance of ₹ 6,32,809 the sum of ₹ 3,15,873 should be allowed as it was incurred on the existing business. 21. After hearing both the parties, we restore thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e -6 para 15 of his order and the Ld. CIT(A) has decided the grievance at para - 12 page 44 of his order. We find that the similar issue has come up before the Tribunal in assessee;s own case for A.Y. 1985-86 in ITA No. 5181/M/02. We find that the Tribunal has discussed this issue at para - 66 and the findngs of the Tribunal is given at para - 70 of its order. We find that the Tribunal has followed the decision of the Tribunal in assesee s own cae for A.Yrs. 1981-82 1982-83 in ITA No. 1579/M/98 and allowed the deduction. Facts being identical, respectfully following the decision of the Tribunal (supra) in assessee s own case, we direct the AO to allow the expenses of ₹ 2,22,508/- This ground of the assessee is accordingly allowed. Respectfully following the aforementioned decision, we allow this ground. 24. Ground no.13 relates to disallowance of ₹ 10,630 being expenditure incurred at the time of AGM. This issue was stated to be covered by the decision of the Tribunal in the assessee s case for A.Y. 1987-88, wherein at para 14 in its order dated 16.05.2014 it has been observed as under: 14. Ground No.6 as reproduced above is relating to the expenses incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal for assessment year 1986-87. The Tribunal vide para 51 of the order has observed as under: 51. This issue find place at page-12 para 26 of the assessment order and at page-28 para-10 of the appellate order. Identical issue came up for hearing in the case of the assessee in A.Y. 1983-84 in ITA No. 4058/M/99, ITA No. 2706/M/2000 for A.Y. 1993-94, ITA No. 454/M/02 for A.Y. 1994-95, ITA No. 3082/M/02 for A.Y. 1995-96 and ITA No. 5181/M/02 for A.Y. 1985-86. We find that the Tribunal in ITA No. 5181/M/02 in assessee's own case has decided a similar issue at para- 140 of its order wherein the Tribunal has followed the earlier decision of the Tribunal in assessee's own case for A.Yrs 1993-94 to 1995-96. Respectfully following the decision of the Tribunal in assessee's own case, we direct the AO to allow the expenses as claimed by the assessee. Ground No. 14 is accordingly allowed. 16. Since the facts for this year are also identical, hence the AO is directed to allow the expenses following the decision of the Tribunal in the earlier assessment year as reproduced above. 17. So far the payments to schools (staff welfare expenses) is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd mineral rights tax of ₹ 97,18,528/-. So far the royalty on limestone is concerned, the ld. A.R. has submitted that the issue has been allowed in the earlier assessment years including assessment I.T.A. No .44 64/ Mum/20 03 I.T.A. No .45 65/ Mum/20 03 15 year 1986-87 in ITA No.4564/M/03 in the own case of the assessee. The Tribunal, while dealing with the issue in para 36 of the said decision, has restored the issue back to the file of the AO to verify the payments, observing as under: 36. These items of disallowances are discussed by the AO at page-10 para-23 of his order. The AO has disallowed Royalty of Limestone at ₹ 1,71,003/- following the assessment order of his predecessor for A.Y. 1984-85. The Ld. CIT(A) considered this issue at page-62, para-18 of his order for A.Y. 1984-85. We find that the matter travelled upto Tribunal and the Tribunal has restored back the issue to the file of the AO to verify the payment and allow deduction as per law if the payments have already been made. Facts and issues are identical as far as royalty of limestone at ₹ 1,71,003 is concerned, we restore this issue back to the files of the AO to verify the payments as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. 30. Accordingly ground no.16 is partly allowed in the manner aforesaid. 31. Ground no.17 relates to disallowance of 20,00,000 out of provision for doubtful debts. According to the submissions made by the learned AR, since the amount was written back in financial year ending 31.03.1990 and was not taxed, this ground is not pressed. Accordingly, this ground is dismissed as not pressed. 32. Ground no.18 relates to disallowance of ₹ 1,39,420 on account of expense incurred on new projects. This is for survey and market study of LAB a chemical agent used to be mixed with soda ash for making detergent powder/washing powder. It is the contention of the learned AR that out of the said amount the assessee does not press for disallowance of ₹ 1,15,420 incurred on Kamal Oil Refinery, which is a new business. The only case of the assessee is for balance amount of ₹ 24,000 which is incurred in respect of existing business. After hearing both the parties, we uphold the decision of CIT(A) in respect of ₹ 1,15,240 and for the balance disallowance of ₹ 24,000, we restore the issue to the file of the AO with a direction to verify the contention of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance is upheld as not pressed. This ground is partly allowed. 34. Ground no.20 relates to disallowance of sponsorship expenses amounting to ₹ 17,448/-. This ground was not pressed due to smallness of amount, the same is dismissed as not pressed. 35. Ground no.21 relates to calculation of interest u/s. 214 amounting to ₹ 8,097. Due to smallness of amount, this ground was also not pressed. Accordingly, this ground is dismissed as not pressed. 4465/Mum/2003 AY :1988-89(Revenue s appeal) 36. Ground no.1 relates to disallowance of ₹ 4,17,990 being entertainment expenses on subsidized food coupons delivered to staff. In this respect it was submitted that this issue is covered in favour of the assessee by the order of the Tribunal dated 16.05.2014 in ITA No. 4464/Mum/2003 for A.Y. 1987-88 , at para 36 which reads as under: 36. Ground No.1 relates to the subsidized lunch coupons issued to the employees entertainment expenditure u/s 37(2) read with explanation (iii). The identical issue has already been decided by the Tribunal in favour of the assessee in the earlier assessment years i.e. assessment year 1995-96 in ITA No.3082/M/2002 in the own case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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