Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Sun Pharmaceuticals Industries Ltd. And Others Versus Deputy Commissioner of Income Tax And Others

2015 (5) TMI 604 - ITAT AHMEDABAD

Reduction of amount of profits eligible for deduction u/s 80HHC from the book profits u/s 115JB - Minimum Alternate Tax (MAT) - After reading the cited decisions viz. Ajanta Pharma Ltd. (2010 (9) TMI 8 - SUPREME COURT ) and Bhari Information Tech.Sys.P.Ltd. (2011 (10) TMI 19 - Supreme Court of India) in the background of the facts of this case we are of the view that the decision of Syncome Formulations (I) Ltd. [2007 (3) TMI 288 - ITAT BOMBAY-H] has been approved by the Hon'ble Supreme Court in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tions on specified grounds in a case where section 80HHC/80HHE of the Act is operations, it becomes clear that computation for the deduction under those sections need to be worked out on the basis of adjusted book profit. In the case of Syncome Formulations (I) Ltd. (supra) came to the conclusion that deduction claimed by the assessee u/s.80HHC has to be worked out on the basis of adjusted book profit u/s.115JA and not on the basis of profits computed under regular provisions of law applicable t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d (4A) of that section. The conditions are only that the relief should be certified by the chartered accountant. Such condition is not a qualifying condition but it is a compliance condition. Therefore, one cannot rely upon the last sentence in cl. (iv) of Explanation to s. 115JB [subject to the conditions specified in sub-cls. (4) and (4A) of that section] to obliterate the difference between "eligibility" and "deductibility" of profits as contended on behalf of the Department. Thus set aside t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s were first of all required to ascertain the nature of expenditure and thereupon decide whether required to be added back in the calculation of book profit u/s.115JB or not. Although, it is a settled position of law that for the purpose of the calculation of book profit the same is required to be increased by certain amounts as prescribed under Explanation (1) of Section 115JB. But side by side the "book profit" is required to be calculated as per the accounting policies and accounting standard .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he file of the AO to be decided denovo - Decided in favour of assessee for statistical purposes.

Deduction u/s.115JB(2)(iii) - brought forward business loss of unabsorbed depreciation of Pradeep Drug Company Limited - Held that:- due to the substantial reserves available at the time of merger it was decided by the amalgamating company and the amalgamated company not to set off such losses or depreciation. Further, the position is that as per Explanation 1(iii) of Section 115JB the "bo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Resultantly, we find no force in this ground of the Assessee, hence dismissed. - Decided against assessee.

Inclusion of Exchange Rate Fluctuation in total amount for the purpose of deduction u/s.80HHC - Held that:- This issue is directly covered in favour of the assessee by an order of CIT vs, Alps Chemicals Pvt Ltd [2014 (10) TMI 251 - GUJARAT HIGH COURT ] wherein discussed decisions namely Sterling Foods (1999 (4) TMI 1 - SUPREME Court ) wherein the legal proposition was that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

port transaction and gained due to fluctuation the court held that such gain cannot only be said to have been 'derived' from export business but the fluctuation gain arose subsequent to receiving the sale consideration hence part of the export sales. The gain was not due to delayed realization of export proceeds - Decided in favour of assessee.

Inclusion of Sale of scrap in total turnover for the purpose of deduction u/s 80HHC - Held that:- Intention behind enactment of section 80HHC .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y could be in respect of the year in which the remittance has been realized and remitted in India. As rightly mentioned by the Assessee in one of the reply to the AO that the provision of Section 115(13) are introduced in the statue with the intention to grant relief to all those exporters who have genuinely applied for the extension of time to the competent authority, i.e., RBI. This provision of IT Act thus prescribes that the claim of deduction is admissible in the year in which the convertib .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a (2009 (8) TMI 63 - SUPREME COURT), wherein it was held that Duty Drawback receipts and DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purpose of deduction U/s 80I / 80IA / 80IB. It was commented by S.C. that Sec. 80IB provides for the allowing of deduction in respect of profits and gains derived from the eligible business we hereby dismiss this ground of the assessee - Decided against assessee.

Reduction of Exchange rate difference in co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be decided as per law, needless to say, after providing an adequate opportunity of hearing to both the sides - Decided in favour of assessee for statistical purposes.

Disallowance of expenses for increase in share capital - Held that:- Sec 35D would apply only in respect of expenditure which is otherwise not allowable under the law being a capital expenditure. This section subscribed or listed certain types of capital expenditure which can be amortised. But if those are not capital ex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

penditure or Capital Expenditure and then decide the question of disallowance. - Decided in favour for statistical purposes.

Set Off of Brought Forward MAT Credit u/s.115JAA after levy of surcharge - Calculation of Interest u/s.234B. - Held that:- As relying on order of CIT Vs. Tulsyan Nec Ltd, [2010 (12) TMI 23 - Supreme Court of India] wherein it was held that MAT credit is admissible in terms of Section 115 JAA to be set off against the assessed tax before calculation interest u/s. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

decision taken in the ordinary course of business. We therefore follow the view already taken by the respected coordinate benches and affirm the decision of CIT(A), hence this ground of the Revenue is dismissed. - Decided against revenue.

Unaccounted sale of solvents - CIT(A) deleted the addition - Held that:- Since the year under consideration is also the post search period and in the financial year under consideration the Assessing Officer has simply presumed that the assessee migh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

endment took place, the depreciation cannot be foisted upon the assessee. Therefore, this ground of the Revenue is hereby dismissed - Decided against revenue.

Inclusion of sales tax and excise duty in the total turnover for the purpose of deduction under section 80HHC - Held that:- As relying on an order of Laxmi Machine Works [2007 (4) TMI 202 - SUPREME Court] for the legal proposition that Excise Duty & Sales Tax are indirect taxes so do not involve any element of 'Turnover'. Respec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nes, we hereby uphold the view taken by learned CIT(A) and reject this ground of the Revenue. - Decided against revenue.

Gross interest for computing 'Profit of the Business' for the purpose of deduction under section 80HHC - Held that:- ACG Associated Capsules Pvt. Ltd., reported in (2012 (2) TMI 101 - SUPREME COURT OF INDIA ) and Topman Exports, reported in (2012 (2) TMI 100 - SUPREME COURT OF INDIA) and thereupon arrived at the conclusion that 90% of the net interest which had been .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

di, AM,JJ. For the Petitioner : Shri Vimalendu Verma, Sr DR For the Respondent : Shri S N Soparkar, AR ORDER Per: Mukul Kumar Shrawat, Judicial Member These Cross Appeals, one by the Assessee and the other by the Revenue Department, have emanated from the order of learned CIT(A)-IV, Ahmedabad dated 30th of June, 2003. These two Appeals are consolidated and hereby decided by this common order, we shall first take up the Appeal of the Assessee. A. Assessee's Appeal (ITA No.3289/Ahd/2003) 1. Gr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uring and export of pharmaceuticals products. As per the return the Assessee has declared an income u/s.115JB at ₹ 92,81,34,716/-. That return was revised and u/s.115JB the amount declared was at ₹ 92,60,12,264/-. It was observed by the AO that the book profit calculated u/s.115JB was reduced by an amount of ₹ 32,48,52,351/- as deduction u/s.80HHC. Following the past history the said claim was revised to ₹ 15,97,76,930/- and accordingly calculated the book profit u/s.115J .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cited decisions viz. Ajanta Pharma Ltd. 327 ITR 305 (S.C.) and Bhari Information Tech.Sys.P.Ltd. 340 ITR 593 (S.C.) in the background of the facts of this case we are of the view that the decision of Syncome Formulations (I) Ltd. 292 ITR 144 (AT)(Mum.)(SB) has been approved by the Hon'ble Supreme Court in the case of Bhari Information Tech.Sys.P.Ltd.(supra). Therein it was held that the deduction u/s.80HHE of the Act in the case of Export of Computer Software has got to be worked out on the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be worked out on the basis of adjusted book profit. In the case of Syncome Formulations (I) Ltd. (supra), the Special Bench of the Tribunal came to the conclusion that deduction claimed by the assessee u/s.80HHC has to be worked out on the basis of adjusted book profit u/s.115JA of the Act and not on the basis of profits computed under regular provisions of law applicable to computation of profits and gains of business. The view taken by the Special Bench was accordingly affirmed and the Spe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be considered together for working out the deduction as mentioned in clause-(iv) of the Explanation to section 115JB of the Act. The Hon'ble Court has said that there was no merit in the said argument of the Revenue Department. The Court has made an observation as under:- 10. ........... . If the dichotomy between "eligibility" of profit and "deductibility" of profit is not kept in mind then s. 115JB will cease to be a self-contained code. In s. 115JB, as in s. 115JA, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erate the difference between "eligibility" and "deductibility" of profits as contended on behalf of the Department. 11. For the above reasons, we set aside the impugned judgment of the High Court and restore the judgment of the Tribunal. Accordingly, the civil appeal of the assessee is allowed with no order as to costs." 1.4. Therefore, respectfully following the above precedents, we hereby hold that the AO is required to re-compute the taxable profit for the purpose of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

year as well we follow the past history and refer the issue back to the file of the AO to be decided accordingly as per law. This ground of the Assessee on the same lines is hereby allowed. 2. Ground No.2 is reproduced below: "2. Re: Addition of expenses of ₹ 7,73,732/- to the book profits calculated u/s.115JB 2.1 The addition of ₹ 7,73,732/- in respect of certain expenses, in the book profits calculated u/s. 115JB should be deleted." 2.1 The observation of the AO was that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of as Cash on hand represented by "I.O.U". Therefore, the source of ₹ 7,73,332/- is from the regular books only and as such not taxable. Even the Assessing Officer has accepted the facts/submission in the Block Assessment. The Block Assessment was completed on 28.02.2001 and accordingly the "IOU's "representing the above expenses were recorded in the Books of Accounts as expenditure in place of "Cash on Hand." This expenditure has not been claimed by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

net profit of the Company was properly reflected and determined and Account duly prepared and audited under the provisions of Schedule VI of the Companies Act, 1956. Therefore, no adjustment is required by your honour in computing Book Profit u/s. 115JB of the Income Tax Act, 1961." 2.2 It was concluded by the AO that the expenditure was not deductible in the P&L Account as per the Companies Act. The expenditure pertained to undisclosed expenses which were detected during the search op .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

both the sides. The Explanation of the Assessee was that the impugned amount represented the undisclosed expenditure which was withdrawn from regular books of accounts. It was claimed that the said amount was part of cash in hand. According to Assessee, the expenditure was considered in block assessment hence in the regular assessment it was not claimed, therefore, added back to the total income in the return filed for A.Y.2001-02. The other argument of the Assessee is that if an amount is added .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e same is required to be increased by certain amounts as prescribed under Explanation (1) of Section 115JB. But side by side the "book profit" is required to be calculated as per the accounting policies and accounting standards described under Companies Act, 1956. The law has clearly prescribed that the "book profit" means the net profit as shown in the P&L Account which is to be computed as per the accounting policies and the accounting standards prescribed under the Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deep Drug Company Limited ₹ 3,39,12,399/- 3.1 The deduction u/s.115JB(2)(iii) being the amount of brought forward business loss of unabsorbed depreciation whichever is less amounting to ₹ 3,39,12,399/- of Pradeep Drug Company Limited should be allowed." 3.1 The observation of the AO was that M/s. Pradeep Drug Company Ltd. (in short PDCL) had merged with Sun Pharmaceuticals Industries Ltd. (in short SPIL) (Assessee) w.e.f. 01.04.2000. While calculating the book profit the Assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

virtue of Section 72A of IT Act the unabsorbed depreciation and unabsorbed loss of PDCL had become the unabsorbed depreciation and unabsorbed loss of SPIL. However, the AO was of the view that as per the provisions of Section 115JB the book profit is to be computed of one unit and not the combination of different units. Further, he has noted that the Assessee was having substantial reserves and after the merger there was no brought forward loss of the unabsorbed depreciation so according to him .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

irmed. 3.2 We have heard both the sides. At the outset, we have been informed that this issue has not been raised in the past in A.Y.1999- 00 and 2000-01. We have also been informed that the Assessee has moved an application u/s.154 of IT Act. However that too was decided against the Assessee. We have examined the facts as narrated above. One of the important finding of the AO is that after the merger was completed there was no amount of brought forward loss and unabsorbed depreciation remained .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot apply if the amount of loss brought forward or unabsorbed depreciation as "Nil". The Assessee has not controverted this fact as noted by the AO that after the amalgamation there was "Nil" amount of brought forward loss and unabsorbed depreciation. Due to this reason, we are of the view that the Assessee has made a wrong claim which was rightly rejected by the AO. Resultantly, we find no force in this ground of the Assessee, hence dismissed. 4. Ground No.4 is reproduced bel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

count ought to be treated as export turnover for the purpose of computing the deduction u/s.80HHC of the Act." 4.1 On perusal of P&L Account it was noted by the AO that the Assessee had reduced exchange rate difference from misc. expenses amounting to ₹ 51,06,825/-. Because of the said rejection the result was that the Assessee had claimed excess deduction u/s.80HHC observed by the AO. Following the past history of the case, he has held that the rejection of the said amount from t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

informed that now this issue is directly covered in favour of the assessee by an order of Hon'ble Gujarat High Court in the case of CIT vs, Alps Chemicals Pvt Ltd 367 ITR 594. The Hon'ble Court has discussed decisions namely Sterling Foods 237 ITR 579 (S.C.), wherein the legal proposition was that the source of the income was the export and earned the said income merely on account of fluctuation in foreign exchange. Also cited a decision of Shah Originals 327 ITR 19 (Bom.) wherein as we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le consideration hence part of the export sales. The gain was not due to delayed realization of export proceeds. The issue was decided in favour of the assessee. Respectfully following the above cited precedents we hereby hold that the assessee is entitled to the claimed deduction. Ground allowed." 4.3 Following the above decision, we hereby hold that the issue is covered by few orders of the Hon'ble High Courts cited supra; therefore, the assessee is entitled for the deduction. This gr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

count under the head "other income" it was noted that the Assessee has included scrap sale of ₹ 48,52,908/-. The AO was of the view that the scrap sale was required to be included in the total turnover while computing the deduction u/s.80HHCof IT Act. This issue was raised in A.Y.1999- 00 and 2000-01. While deciding the Appeal of the Assessee for A.Y.2000-01 ITAT 'D' Bench vide an order dated 13th March, 2015 has held vide paragraph 5.2 as under: 5.2 Heard both the sides. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

process of manufacturing, some portion of the Steel could not be used and it was treated as scrap. The assessee sold this scrap in the local market and income arising from sale was reflected in the Profit & Loss account. For the purpose of availing deduction u/s.80HHC, income from sale proceeds of sale scrap was not included in the "total turnover" but it was shown separately. The Revenue Department has accounted the sale proceeds from scrap in the "total turnover". The H .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ales would not include scrap material. According to the Hon'ble Court, intention behind enactment of section 80HHC of the Act is to encourage export to earn Foreign Exchange. It was finally concluded that the proceeds generated from the sale of scrap would not be included in the "total turnover". 4.3. Respectfully following the aforesaid view expressed by the Hon'ble Supreme Court, we hereby direct to re-compute the turnover after excluding the sale amount of scrap. Resultantly .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

proceeds of ₹ 6,82,19,914/- from export turnover for the purpose of deduction u/s 80HHC. 6.1 The unrealised export proceeds of ₹ 6,82,19,914/- should not be reduced from the export turnover for the purpose of computing the deduction u/s 80HHC. 6.2 Without prejudice to the above, the export realised till the date of completion of the assessment should be considered as export turnover for the purpose of computing the deduction u/s 80HHC. u/s.155(13)." 6.1 On perusal of Form 10CCA .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ension of time as on 31st December, 2002. The export proceeds of ₹ 374.75 lac were remained outstanding. The argument of the Assessee was that an application was made to Reserve Bank of India to grant extension and there was no rejection of application. It was further explained that the Assessee was made to understand that due to ongoing recession in the world the Reserve Bank of India was flooded with such explanation for extension of time for realization of export proceed. Therefore RBI .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f Section 155 of IT Act, the Assessee is entitled to get the claim subsequently in the year in which the convertible fund exchange is received in India. So the request of the Assessee was that the AO can amend the assessment order u/s.154 by allowing the deduction u/s.80HHC accordingly. It was also pleaded that intention of the legislature was that the Assessee should be given the deduction u/s.80HHC on the basis of the sale proceeds received or to be received within six months. If not received .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ter prepared a chart to demonstrate that certain invoice numbers were approved by the RBI to brought in the foreign exchange totaling ₹ 1,61,71,484/-. Out of the said approved amount the assessee has received ₹ 54,86,829/-. The AO has also mentioned that later on the Assessee had also enclosed a letter dated 27th February, 2003 of an another approval from Reserve Bank of India amounting to ₹ 10,04,47,000/-; the remittance received. 6.2 Before learned CIT(A), those very facts we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the Assessee in one of the reply to the AO that the provision of Section 115(13) are introduced in the statue with the intention to grant relief to all those exporters who have genuinely applied for the extension of time to the competent authority, i.e., RBI. This provision of IT Act thus prescribes that the claim of deduction is admissible in the year in which the convertible foreign exchange has been brought in and accounted in the books of accounts. We, therefore, direct the AO to apply .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the new industrial undertaking for the computing the deduction u/s.80IB (old Section 80-IA)" 7.1 In this ground, the Assessee has raised the issue DEPB claim however the same was disallowed in the past by us while deciding the appeal of the Assessee for A.Y.2000-01 as per paragraph 8, relevant portion is reproduced below: 8.1 It was observed by the Assessing Officer that the assessee has shown DEPB sale in Silvasa Unit. A book profit of ₹ 5,79,600/- was taken into account u/s 80IA of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

en by Ld. CIT(A), primarily because of the reason that now this issue is well settled by the Hon'ble S.C. in the case of Liberty India 317 ITR 218 wherein it was held that Duty Drawback receipts and DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purpose of deduction U/s 80I / 80IA / 80IB. It was commented by S.C. that Sec. 80IB provides for the allowing of deduction in respect of profits and gains derived from the eligible business. The connotati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

this ground of the Revenue is allowed." 8.2 Respectfully following the decision of Liberty India (supra), we hereby dismiss this ground of the assessee. Ground dismissed. 7.2 On the same lines following Liberty India 317 ITR 218, we find no force in this ground of the Assessee and the same is hereby dismissed. 8. Ground No.8 is reproduced below: "8. Re: Reduction of Exchange rate difference in computing the profits of the new industrial undertaking u/s.80IB. 8.1 The reduction of exchan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essee has various manufacturing units and is also engaged in leasing and financing activities. The assessee has filed unitwise profit and loss account attached with return of income. Unit wise profit and loss account shows profit from both the Silvassa Unit at ₹ 50,40,55,786/- i.e. for ₹ 9,02,31,379/- for unit one and ₹ 41,38,23,407/- for unit two of the IT Act. It is noticed that in working out this deduction the assessee has not allocated certain expenses to both Silvassa Uni .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he amount of allocation comes to ₹ 3,31,944/- for Silvassa-I unit and ₹ 4,51,444/- for Silvassa-2 unit, accordingly the same is reduced. (iii) Sale of DEPB is being removed from 80IA income of Silvassa- 1 unit as discussed in previous paragraph and income of the 80IA units is further reduced by ₹ 11,41,480/- (iv) As share issue expenses cannot be ammortised the same is added back to profit/income of the 80IA both unit by ₹ 74,095/-" 8.2 In the light of the above disc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ice, we hereby restore this ground back to him to be decided as per law, needless to say, after providing an adequate opportunity of hearing to both the sides. Since this ground is restored back hence may be treated as allowed for statistical purpose. 9. Ground No.9 is reproduced below: "9. Re: Disallowance of expenses for increase in share capital of ₹ 4,54,000/- 10.1 The expenses for increase in share capital on account of redeemable preference shares should be allowed as a deductib .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Assessment Year 1999-2000, wherein vide paragraph Nos. 10.3 to 10.5, we have referred the issue back to the file of the Assessing Officer with certain directions. The relevant portion is reproduced below:- "10.3 Heard both the sides at some length. Sec. 35D grants a deduction in respect of expenditure which may otherwise be disallowable on the ground that it is a 'capital expenditure' or is incurred prior to the setting up of the business, but in instalments in number of assessmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation of a company is not covered as per sec 35D(2)(c)(iii). The undisputed factual position is that the filing fees to ROC and stamp duty, etc. was paid in connection of "preferential issue" which were redeemable after three years. 10.4) As per the argument Ld CIT DR, this issue has been dealt with in the case cited as Brooke Bond India Ltd. 225 ITR 798 (SC). However in this case the provisions of Sec 35D were not under consideration. The only point to decide was whether a particular .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the company, and it was held as capital expenditure. Both these decisions are not dealing the applicability of the provisions of Sec 35D. 10.5) As already mentioned above Sec. 35D would apply only in respect of expenditure which is otherwise not allowable under the law being a capital expenditure. This section subscribed or listed certain types of capital expenditure which can be amortised. But if those are not capital expenditure then the view is that after examining the nature and genuinen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rovision of Sec. 35D are not going to effect such deduction. So the outcome of the above discussion is that the provision of amortisation is not intended to supersede any other provision of the income tax act under which such expenditure is otherwise admissible as a deduction. Under the fitness of circumstances it is therefore required to restore this issue back to A.O. to examine both the aspects i.e. Revenue Expenditure or Capital Expenditure and then decide the question of disallowance. Resul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ught Forward MAT Credit u/s.115JAA after levy of surcharge. 10.1 The surcharge should be levied after giving the set off of brought forward MAT credit u/s.115JAA. 11. Re: Calculation of Interest u/s.234B. 11.1 The interest chargeable u/s.234B should be charged after taking into account set off of MAT Credit u/s.115JAA(1)." 10.1 Both these grounds are consequential in nature however in respect of ground no.10 an order of Hon'ble Supreme Court is cited before us, pronounced in the case of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

below: "1. The Ld. CIT(A) erred in law and on facts in deleting the addition of ₹ 14,42,823/- made on account of interest to Dadhas." 11.1 For the year under consideration, as well, the AO has followed the past history and disallowed the interest paid to Sri S. Mohan Chand Dadha, M. Mahendra Dadha and Sri Meher Chand Dadha. When the matter was carried before the First Appellate Authority, learned CIT(A) has allowed the same. Now the Revenue is before us. 11.2 While deciding the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lved vide a consolidated order for A.Y. 99-00,2000-2001, 01-02, 02-03 & 03-04 of Aditya Medisales bearing ITA No. 3272/Ahd/2002, ITA 1623/Ahd/2003, ITA 1353 & 2180/Ahd/2005 & ITA no. 08/Ahd/2007 dated 30/09/2010. In that order there was a reference of an another order of the Tribunal pertaining to Block Assessment of Aditya Medisales bearing IT(SS)A No.95/Ahd/2001 dated 31/05/2007 wherein vide paragraph no 28 (reproduced by the Tribunal) it was held as under: "28. We have carefu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

isition of business / amalgamation the acquirer would be keen to ensure that there is smooth integration of business across the entire line which include distribution channel also. In such circumstances as the sole distributor of SPIL the action of the Assessee in appointing the said firms as its distributor for the southern regions, at the behest of SPIL would be governed by business expediency. The Assessee has also demonstrated by documentary evidence before the lower authorities that the dis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it is seen that the Assessing Officer has considered trade advances given by the Assessee to the individual members of the Dadha family as advances in the ordinary course of business. Thus, even if the advances were given in the guise of a trade advance, the same would still be considered as for the purpose of business. Further we noted that the decision of the Supreme Court in the case of S.A. Builders (supra) has clearly stated that if the business considerations require, interest free funds c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

refore follow the view already taken by the respected coordinate benches and affirm the decision of CIT(A), hence this ground of the Revenue is dismissed. 13.4 Consistent with the view already taken in the past, for this year as well, we hereby affirm the deletion of the impugned addition. In the result, this ground of the Revenue is dismissed." 11.3 In the result, following the past history, this Ground of the Revenue is hereby dismissed. 12. Ground No.2 is reproduced below: "2. The L .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9-00 and 2000-01 in the past. For ready reference paragraph 14.2 from A.Y.2000-01 is hereby reproduced below: "14.2 The issue of alleged unaccounted sale of spent solvents was discussed by us for Revenue's appeal for Assessment Year 1999-2000 and vide ground No.4, it was decided in the following manner:- "14.4 Heard both the sides. First point from the side of the assessee is that the said Block Assessment had already been quashed by the Tribunal 'D' Bench in IT(SS) No.70/A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.O. that even for the post search period the Solvent might have been sold on the same rates. But the basic question is that when even for search period the impugned addition did not survive on account of lack of evidence then how such presumption could be approved for the post search period. The reasoning appears to be convincing especially when no contrary material is available on record form the side of the Revenue. This ground of the Revenue is therefore dismissed." 14.3 Since the year u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y dismissed. 13. Ground No.3 is reproduced below: "3. The Ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 2,33,38,180/- made on account of compulsory allowance of depreciation." 13.1 For this year as well the AO was of the view that for the purpose of getting more deduction u/s.80HHC and u/s.80IA the Assessee has not claimed the depreciation in respect of both Silvassa Units. The AO had deducted the depreciation accordingly. This very issue was before us an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pronounced in Assessee's own case bearing Tax Appeal No. 93 of 2000 dated 17.12.2014 titled as Dy.CIT vs Sun Pharmaceuticals Ind. Ltd. is cited wherein it was held that the Tribunal was right in law in holding that depreciation not claimed by the assessee could be deducted despite the introduction of the blockassets concept. One more order of Hon Guj. High Court is referred as Sakun Polymers Ltd. (Tax Appeal No. 41 of 2007 with others order dated 23.12.2014) wherein for A.Y. 1995-96 it was h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee. Therefore, this ground of the Revenue is hereby dismissed." 13.2 Respectfully following the above decision, we hereby affirm the finding of learned CIT(A) and hold that the depreciation under these circumstances and for the assessment year under consideration cannot be enforced upon the Assessee. Resultantly, this ground of the Revenue is hereby dismissed. 14. Ground No.4 is reproduced below: "4. The Ld. CIT(A) has erred in law and on facts in directing to include sales tax and e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

considering the provisions of the Act, vide ground No.7, for Assessment Year 1999-2000, we have held as under:- "17.2. Now before us an order of Hon S.C. is cited, namely, Laxmi Machine Works 290 ITR 667 for the legal proposition that Excise Duty & Sales Tax are indirect taxes so do not involve any element of 'Turnover'. Respectfully following this precedent we hereby affirm the findings of CIT(A) and dismiss this ground of the Revenue." 16.2 Respectfully following the abov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 48,52,198/-. The AO has asked as to why the amount of sale of scrap should not be included with total turnover of the Assessee while calculating the deduction u/s.80HHCof IT Act. Accordingly, the AO has recalculated the deduction u/s.80HHC. 15.2 When the matter was carried before the First Appellate Authority, he had noted that in the earlier years the issue of scrap sale to be treated as part of total turnover as decided by his predecessor against the Assessee. However for the year und .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s Ground is dismissed. 16. Ground No.6 is reproduced below: 6. The Ld. CIT(A) has erred in law and on facts in directing to consider the gross interest for computing 'Profit of the Business' for the purpose of deduction under section 80HHC." 16.1 The AO has considered the gross interest for the purpose of computing "profit of the business" for the purpose of calculating the deduction u/s.80HHC of IT Act. 16.2 This issue was dealt with us in A.Y.2000-01 in Revenue's App .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ipt by way of interest forming part of the profits and gains of the business. Therefore, it was the net interest income. According to the assessee, it was not in respect of gross income exclusion. However, the Assessing Officer was not convinced and held that the total interest receipts as credited in the profit and loss account are to be reduced from the profits of the business for the purpose of calculating the 80HHC deduction. 18.2 When the matter was carried before the First Appellate Author .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was required to be deducted as per Explanation (baa) of section 80HHC. On the same line, we hereby direct to compute the 80HHC deduction. Therefore, this ground of the Revenue is hereby dismissed." 16.3 On the same lines, we find no force in this Ground of the Revenue and the same is hereby dismissed. 17. Ground No.7 is reproduced below: "7. The Ld. CIT(A) has erred in law and on facts in directing to consider the gross lease rent for computing 'Profit of the Business' for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version