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2015 (5) TMI 827 - CALCUTTA HIGH COURT

2015 (5) TMI 827 - CALCUTTA HIGH COURT - TMI - Entitlement to deduction under section 80HHBA - sale of scrap - Held that:- As relying on Fenner (India) Ltd. Versus CIT (No. 2) [1998 (4) TMI 67 - MADRAS High Court] the scrap materials come within the manufacturing process of the industrial undertaking in the manufacture of certain products such as V-belts, oil seals. O-rings and certain rubber moulded products, etc. In this view of the matter, we are of the view that profits and gains from the sa .....

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ard Resolutions not to charge interest from aforesaid 3 parties on the advances given by it to them. Therefore, we hold that the Assessing Officer was not justified to consider that the interest income has accrued to the assessee on the outstanding advances as the assessee has agreed not to charge interest on the outstanding advances before the interest income had accrued to it. - Decided in favour of assesse.

Disallowance of registration charges - ITAT deleted disallowance - Held tha .....

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in the nature of revenue expenditure - Decided in favour of assesse. - ITA 114 of 2011 - Dated:- 8-5-2015 - GIRISH CHANDRA GUPTA AND ARINDAM SINHA, JJ. For the Appellant : Md. Nizamuddin, Advocate For the Respondent : Mr. N. K. Poddar, Senior Advocate with Mr. J. P. Tibrewal, Advocate ORDER The subject matter of challenge in this appeal is a judgment and order dated 12th November, 2010 pertaining to the assessment year 2003-04. The Revenue has come up in appeal. The following three questions .....

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e Board of Directors had waived interest by totally overlooking the fact that in that event there was no justification of showing those interest in the account of the company. (c) Whether the learned Tribunal below committed substantial error of law in treating the expenses on registration and stamp duty as revenue expenditure instead of capital expenditure. In so far as question no.1 is concerned, the learned Tribunal concurred with the views expressed by the CIT(A). The CIT(A) held as follows: .....

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foresaid views were upheld by the learned Tribunal. Mr. Poddar, learned senior advocate appearing for the assessee, drew our attention to a judgment in the case of Fenner (India) Ltd. vs. CIT, reported in (2000) 241 ITR 803, wherein the following views were expressed: For the sake of emphasis, we may say that the scrap materials come within the manufacturing process of the industrial undertaking in the manufacture of certain products such as V-belts, oil seals. O-rings and certain rubber moulded .....

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d by the learned Tribunal are as follows: 6.2. In the case before us, there is no dispute to the fact that the assessee-company had passed requisite Board Resolutions not to charge interest from aforesaid 3 parties on the advances given by it to them. Therefore, we hold that the Assessing Officer was not justified to consider that the interest income has accrued to the assessee on the outstanding advances as the assessee has agreed not to charge interest on the outstanding advances before the in .....

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relevant question is whether the waiver was made after the interest had accrued. If an answer to the question is in the affirmative then, the liability to pay tax can not be avoided. If on the other hand, the answer to the question is in the negative, in other words, if the waiver had been made before the interest accrued to the assessee, the liability to pay tax on that amount cannot be fastened. This is precisely the view taken by the Supreme Court in the aforesaid case. The following finding .....

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y of the accounting year and though the finding of the Tribunal is that the said waiver was not actuated by any commercial considerations, yet learned counsel for the Revenue did not press the Revenue s case so far as this assessment year is concerned. In so far as the question no.3 is concerned, the views expressed by the learned Tribunal are as follows: 13. Ground No.3 of the appeal is in respect to delete disallowance of registration charges of ₹ 31,32,178/- paid by the assessee in its .....

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31,32,178/- is to be disallowed. However, in first appeal, the ld. CIT(A) given the direction to the Assessing Officer stating that to verify/ascertain the registration charges attributable to shops which have been rented out by the assessee and disallow the same on proportionate basis and allow the balance of registration charges as eligible expenditure. Hence, the Department is in appeal before the Tribunal. 15. During the course of hearing, the Ld. Departmental Representative supported the a .....

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