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M/s J.K. Synthetics Ltd., Kanpur and others Versus A.C.I.T., Range-4, Kanpur and others

2015 (7) TMI 163 - ITAT LUCKNOW

Addition on account of Proportionate premium on redemption of debenture - CIT(A) deleted the adition - whether no premium was payable before expiry of 7 years? - Held that:- The issue in the present year in respect of proportionate premium on redemption of debenture is squarely covered in favour of the assessee by the judgment of Madras Industrial Development Corpn. Ltd. vs. CIT [1997 (4) TMI 5 - SUPREME Court] wherein it was held that discount of debentures is revenue expenditure allowable prop .....

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e.

Disallowance of debentures issue expenditure - CIT(A) deleted the addition - Held that:- the issue is covered in favour of the assessee by the judgment of Hon'ble Supreme Court in the case of India Cements Ltd. vs. CIT (1965 (12) TMI 22 - SUPREME Court). Respectfully following the same, we decline to interfere in the order of CIT(A) on this issue.- Decided in favour of assessee.

Disallowance of 100% equity issue expenses - CIT(A) allowed claim - Held that:- This issue is .....

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erence in facts in the present year and therefore, we do not find any reason to take a contrary view - Decided in favour of assessee.

Addition of expenses report at capital expenditure by the special tax auditors - CIT(A) deleted the addition - Held that:- Out of total expenses of ₹ 2,38,09,910/-, the relief was allowed by the CIT(A) for ₹ 1,04,80,843/-. The nature of expenses for which relief was allowed by CIT(A) is telephone expenses, repairs/renovation of building, sta .....

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tock enhanced in A.Y. 1989-90 - Held that:- The claim of the assessee for enhancement in opening stock in the present year is on the basis that in assessment year 1989-90, the closing stock was enhanced by the Assessing Officer. It is also noted by CIT(A) that the addition in that year has been upheld by learned CIT(A) in that year but it is not known as to whether such addition in assessment year 1989-90 was upheld by the Tribunal or not. Therefore, we feel it proper that this aspect has to be .....

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en no relief is called for in the present year as has been claimed.

CIT(A) Deleting the addition on account of presentation of articles even though the expenditure hit by section 37(2A) - Held that:- in the present year, the CIT(A) has deleted the entire disallowance made by the Assessing Officer on account of presentation articles whereas in assessment year 1993-94 to 1995-96, disallowance was confirmed by the Tribunal to the extent of 30% of such expenses. Accordingly, in the presen .....

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because she is a qualified Doctor and was looking after the hospital for employees at Kota plant of the assessee company. The CIT(A) has confirmed this disallowance in respect of expenses of Mrs. R. Singhania also but in our considered opinion, apart from being spouse of the director, Mrs. R. Singhania is an employee of the assessee company also and moreover while deciding the similar issue in assessment year 1987-88, it is held by the Tribunal in that year as per Para 216 of its order that this .....

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s is not the finding of the special tax auditors that this much expenses of ₹ 7,40,300/- is of disallowable nature and therefore, without pointing out any single reason for making disallowance, the disallowance made by the Assessing Officer on this basis alone that this is reported by special tax auditors that this much expenditure is incurred on guests is not justified and therefore, we delete this disallowance - Decided in favour of assessee.

Disallowance of Kamla Retreat Exp .....

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s being capital expenditure under the head "Licence Fee" in earlier year - Held that:- In the assessment order, it is noted by the Assessing Officer in assessment year 1989-90, the CIT(A) has confirmed the disallowance of depreciation on such capital expenditure. We are of the considered opinion that merely because the assessee has incurred a capital expenditure, the depreciation cannot be allowed unless the assessee is able to establish that such capital expenditure has resulted into creation o .....

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ee has not established these aspects. - Decided against assessee.

Disallowance of capital Expenditure debited to Profit & Loss A/c - Held that:- We find that in assessment year 1987-88, the issue in dispute was regarding disallowance without appreciating that the expenditure was allowable u/s 37(1). In that year, this issue was decided by the Tribunal against the assessee by following the judgment of Hon'ble Apex Court rendered in the case of CIT vs. Sri Mangayarkarasi Mills P. Ltd. .....

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0/04/2010 for assessment year 1990-91. 2. First we take up the appeal of the Revenue i.e. I.T.A. No.486/Lkw/2010. 3. Ground No. 1 is as under: 1. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in deleting the addition of ₹ 83,69,631/- on account of Proportionate premium on redemption of debenture without appreciating the fact that no premium was payable before expiry of 7 years. 4. Learned D. R. of the Revenue supported the assessment order whereas l .....

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#39;ble Apex Court rendered in the case of Madras Industrial Development Corpn. Ltd. vs. CIT 225 ITR 802 wherein it was held that discount of debentures is revenue expenditure allowable proportionately over the period of debentures. Respectfully following this judgment of Hon'ble Apex Court, we decline to interfere in the order of CIT(A) on this issue. Ground No. 1 is rejected. 6. Ground No. 2 is as under. 2. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on fa .....

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learned CIT(A) as per Para 5 of his order and in this Para, learned CIT(A) has reproduced a chart containing details of total amount claimed by the assessee of ₹ 5,03,487/-. This detail contains details of 10 different years for which deduction is claimed by the assessee in the present year to the extent of 1/10th of the total amount incurred by the assessee in respective years. The Assessing Officer has allowed deduction of ₹ 2,17,718/- in respect of five such years and disallowed .....

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pointed out by Learned D.R. of the Revenue, we do not find any reason to take a contrary view in the present year. Accordingly, Ground No. 2 is rejected. 9. Ground No. 3 is as under: 3. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in allowing the debentures issue expenditure without appreciating the facts that the assessee had issued these debentures to part finance capital cost of company's tyre cord and naylon units as well as to part finance compa .....

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paper book. 11. We have considered the rival submissions. We find that the issue is covered in favour of the assessee by the judgment of Hon'ble Supreme Court in the case of India Cements Ltd. vs. CIT (Supra). Respectfully following the same, we decline to interfere in the order of CIT(A) on this issue. This ground is rejected. 12. Ground No. 4 is as under: 4. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in allowing the 100% equity issue expenses. 1 .....

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s dated 21/04/1995 and hence, reference was not made by the Assessing Officer to this judgment and disallowance was made by him on some different basis but once the judgment has been rendered by Hon'ble Apex Court and the matter is covered against the assessee by this judgment, the relief allowed by learned CIT(A) without considering that judgment is not proper and therefore, the order of CIT(A) on this issue cannot be sustained. We, therefore, reverse the order of CIT(A) and restore that of .....

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R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86 and relevant page is available on pages 123 to 125 of the paper book. 17. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86 and Learned D.R. of the Revenue could not point .....

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d D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that the disallowance has been confirmed by the Tribunal in assessee s own case for assessment year 1988-89 in I.T.A. No.2633/Del/94, copy of which is available on pages 26 to 27 of the paper book. 20. We have considered the rival submissions. Since Learned A.R. of the assessee has fairly conceded that the issue in dispute is covered in favour of th .....

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r Kota Guest House. 22. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86 and relevant pages are available on pages 113 to 114 of the paper book. 23. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal .....

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ed u/s 37(4) of the I. T. Act. 25. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1982-83 in I.T.A. No.53/Del/86 and relevant pages are available on pages 287 to 288 of the paper book. 26. We have considered the rival submissions. We find that the issue regarding mess expen .....

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rtainment expenditure ignoring that these expenses hit by provisions contained u/s 37(2A) of the I.T. Act. 28. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86 and relevant pages are available on pages 117 to 118 and 121 to 122 of the paper book. 29. We have considere .....

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as erred in law and on facts in allowing relief of ₹ 34,55,544/- being the disallowance on account of proportionate interest on the interest free loans to M/s J. K. Satoh when the Assessing Officer has established that the advances had been made to the subsidiary company out of bank overdraft. 31. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of .....

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d D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 33. Ground No. 9 is as under: 9. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in holding the know-how fee of ₹ 37,38,838/- as revenue expenditure. 34. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of lea .....

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considered the rival submissions, perused the material available on record and gone through the orders of the authorities below and the Tribunal decision cited by Learned A.R. of the assessee. We find that this issue has been discussed by the Assessing Officer in Para 12 on page No. 51 & 52 of the paper book. In this Para, it is noted by the Assessing Officer that this claim has been made by the assessee u/s 35AB and the assessee has paid and capitalized this technical knowhow amounting to & .....

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e and in this manner 1/6th of such amount is allowable in the succeeding five years also but it has to be ensured that the assessee is not claiming depreciation also on this expenditure capitalized by the assessee. Hence, to ensure that the assessee is not claiming double deduction in respect of this expenditure, first by claiming u/s 35AB and again by claiming depreciation on such expenses, we feel it proper that the matter should go back to the file of the Assessing Officer to verify this aspe .....

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eding year and if the assessee is able to do so, no disallowance should be made in the present year as has been claimed by the assessee to the extent of 1/6th of these two expenses being ₹ 37,38,838/- and ₹ 5,43,436/-. With these observations, this ground is allowed for statistical purposes. 36. As per above Para, we find that the issue was restored by the Tribunal to the file of the Assessing Officer for fresh decision with the direction that the assessee should establish before the .....

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s as under: 10(a) That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in restricting the disallowance up to the extent 50% on account of expenses on Kamla Retreat ignoring that these expenses are hit by section 37(4) and 37(5) of the Act. 38. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribuna .....

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in the present year, we do not find any reason to take a contrary view. This ground is rejected. 40. Ground No. 10(b) is as under: 10(b) That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in restricting the disallowance of ₹ 1,00,000/- on account of expenses related to Kamla Retreat. 41. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this iss .....

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9. Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 43. Ground No. 11 is as under: 11. On the facts and in the circumstances of the case the Ld. CIT(A) has erred in holding that surplus receipts over refunds in the cops deposits account was not the income of the assessee and thereby deleting the addition of ₹ 31,47,981/-. 44. Learned D. R. of the Revenue sup .....

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case for assessment year 1985-86 and 1988-89. Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 46. Ground No. 12 is as under: 12. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in deleting the disallowance of ₹ 4,12,886/- on account of Air-Craft Expenses even though the assessee could not provide the details of person .....

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he rival submissions. We find that this issue is covered in favour of the assessee by Tribunal orders for various years such as assessment year 1981-82, 1982083, 1983-84, 1985-86, 1986-87 and 1989-90. Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 49. Ground No. 13 is as under: 13. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on .....

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year 1983-84, 1984-85, 1985-86, 1986-87 and 1988-89 and relevant orders are available in paper book. 51. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by in favour of the assessee by Tribunal orders for various years such as assessment year 1983-84, 1984-85, 1985- 86, 1986-87 and 1988-89. Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary v .....

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has been decided by learned CIT(A) as per Para 21 of his order appearing on pages 28 to 30 of his order, which is reproduced below for the sake of ready reference:- 21. Ground No.18: Capital Expenditure Debited to Profit & Loss A/c.- ₹ 2,38,09,100/-. This issue has been dealt with by the AO in his order at pages 45 & 46. The facts of the case are that in the report of Spl. Auditors, they have pointed out certain items of capital expenditure which were debited by the appellant in t .....

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harges 230239 9 Revenue Stamp Papers 5100 10 Expenses on Raising Loan 125000 11 Insurance Premium 3881 12 Store Consumption 1593235 13 Computer Maintenance 29205 14 Employees Welfare Expenses 31453 15 License fee 3676 16 Office Maintenance 44073 17 Technical Consultancy 592506 18 Others 472919 Total 23163516 He further argued that disallowances have been solely rested upon report of the Spl. Tax Auditors. He also stated that item16 wise detailed reply was given to the Sp. Tax Auditors as well as .....

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r contrary to the explanation put on record by the appellant with a view to discharge burden of proof which was upon Ld. AO, disallowance has been made by treating expenditure of perfect revenue nature as capital. In the appellant own case for assessment year 1994-95, my predecessor had vacated the disallowance at Para 40.ii, page 35-36 and Para 44.iii page 37. He also stated that in A.Y.1987- 88, in appellants' appeal before me, I have also allowed entire expenses except the expenses relati .....

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garkarasi Mills (SC) (2009), the appellant gets relief of balance amount of ₹ 1,04,80,843/-(Rs.2,31,63,516 (-) ₹ 1,26,82,673). The AO is also directed to allow depreciation on ₹ 1,26,82,673/-. (Relief- ₹ 1,04,80,843/-) The appellant also stated that there has been a double addition of ₹ 6,18,807/- under the head "Touring Expenses" and ₹ 26,787/- under the head "Travelling Expenses" as reported by spl. Tax auditors in Annexure 1A of their re .....

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ndling, transport expenses, insurance premium, office maintenance etc. and a clear finding has been given by learned CIT(A) that these expenses are of revenue in nature. Considering the nature of expenses, we are of the considered opinion that no interference is called for in the order of CIT(A) on this issue because these expenses cannot be stated to be capital expenditure. Hence, we decline to interfere in the order of CIT(A). Ground No. 14 is rejected. 55. Ground No. 15 is as under: 15. That .....

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for assessment year 1984-85, 1988-89 and 1989-90 and relevant pages are available in paper book. 57. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1984-85, 1988-89 and 1989-90 and Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 58. Ground No. .....

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8-89 and 1989-90. 60. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1988-89 and 1989-90 and Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 61. Ground No. 17(a) is as under: 17(a) That the Commissioner of Income Tax (Appeals)-II, Kanpur has er .....

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rder dated 29/09/2010 restored the matter back to the file of the Assessing Officer for re-examination in the light of the appellate decision for earlier years, copy of which is available on pages 247 to 248 of the paper book. 63. We have considered the rival submissions. We find that admittedly, in assessment year 1994-95, the Tribunal has restored the matter back to the file of the Assessing Officer for fresh decision and accordingly, in the present year also, we set aside the order of CIT(A) .....

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even though the claim was hit by provisions of section 43A. 65. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1984-85. 66. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case fo .....

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nsport Service 167 ITR 474 (RAJ.) 68. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1993-94 and relevant pages are available on pages 179 to 180 of the paper book. 69. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by .....

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7(1) of the Act. 71. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1993-94 and relevant pages are available on pages 179 to 180 of the paper book. 72. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal ord .....

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d exclusively for business purposes. 74. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1995-96 and relevant pages are available on page 262 of the paper book. 75. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the .....

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s. 77. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86 and relevant pages are available on page 180 and 181 of the paper book. 78. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee .....

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earned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1981-82, 1982-83 & 1985-86. 81. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1981-82, 1982-83 & 1 .....

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D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1981-82, 1982-83, 1993-94 & 1995-96. Copy of the order is available on paper book. 84. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own .....

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by section 37(2A) of the Act. 86. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86, 1993-94 & 1995-96. Copy of the order is available on paper book. 87. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the T .....

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y for business purposes. 89. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1983-84. Copy of the order is available in paper book. 90. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s .....

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. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1993-94 and 1995-96. Copy of the order is available in paper book. 93. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for as .....

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the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). 96. We have considered the rival submissions. We find that it is noted by CIT(A) in Para 28(e) of his order that the Assessing Officer has disallowed a sum of ₹ 1,57,969/- stating that the amount was given to the employees of the company for expenditure and other ad hoc expenses for which no details/vouchers have been kept. He has also given a finding that in assessment year 1995-96, the CIT( .....

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the fact that section 350 of the Companies Act does not permit change in WDV of fixed assets on account of their revaluation as well as the WDV cannot be changed on account loss due to exchange rate fluctuations, because there is no section under the companies act permitting this on the lines of section 43A of the I.T. Act, 1961. 98. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this .....

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n to take a contrary view. This ground is rejected. 100. Ground No. 22 is as under: 22. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in allowing relief of ₹ 19,57,470/- being the disallowance on account of proportionate interest on the interest free loans to M/s ASFL & M/s J. K. Satoh Agricultural Machines Ltd., while the Assessing Officer has established that the advances had been made to the subsidiary company out of bank overdraft. 101. Lear .....

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s own case for assessment year 1984-85, 1985-86, 1988-89 & 1989-90. Learned D.R. of the Revenue could not point out any difference in facts in the present year and therefore, we do not find any reason to take a contrary view. This ground is rejected. 103. Ground No. 23 is as under: 23. That the Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in deleting the addition on account of enhancement value of opening stock. 104. Learned D. R. of the Revenue supported the .....

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enhancement of valuation of Opening stock because value of the closing stock was enhanced in the A.Yr. 1989-90 which became the opening stock of the year under consideration but the same was disallowed by AO on the ground that the issue has not become final and pending before appellate authorities. The facts remains that in the assessment order for the assessment year 1989-90, value of closing stock of raw-material and finished goods were enhanced by ₹ 2,22,35,679/- at pages 295 to 305 of .....

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uments placed before me. I have also gone through the order for the assessment year 1989-90 referred above. Since addition has been upheld by my predecessor in A.yr. 1989-90, the AO is directed to revise the value of opening stock by ₹ 2,22,35,679/- for the year under appeal. The ground No. 28 is, therefore decided in favour of the appellant. (Relief - Directions) 105.1 From the above Para from the order of CIT(A), it is seen that the claim of the assessee for enhancement in opening stock .....

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e the order of CIT(A) and restore the matter to the file of Assessing Officer for fresh decision. The assessee should submit copy of the Tribunal order for assessment year 1989-90 and if it is found that the addition in closing stock was upheld by the Tribunal then the assessee deserves relief in the present year but if the addition in assessment year 1989-90 has been deleted by the Tribunal then no relief is called for in the present year as has been claimed. The Assessing Officer should pass n .....

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arned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1985-86. We find that the issue was decided by learned CIT(A) on the basis that the Assessing Officer is directed to quantify the assessee s claim for investment allowance subject to deduction in the year of creation of necessary .....

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7; 6,34,147/- on account of presentation of articles even though the expenditure hit by section 37(2A) of the Act. 109. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1988-89 in I.T.A. No.2633/Del/94 and relevant order is available on pages 25 and 26 of Part-I of the paper .....

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the Tribunal to the extent of 30% of such expenses. Accordingly, in the present year also, we hold that the disallowance to the extent of 70% of the expenses should be deleted and in this manner, we confirm the disallowance to the extent of 30% of the expenses. This ground is partly allowed. 111. Ground No. 25(b) is as under: 25(b) That the Commissioner of Income Tax (Appeals)-!!, Kanpur has erred in law and on facts in deleting the disallowance upto 50% i.e. ₹ 1,39,182/- being expenses o .....

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espect of expenses for employees. He also submitted that in the present year, the CIT(A) has confirmed the disallowance to the extent of 50% and relief was allowed for 50% and therefore, there is no infirmity in the order of learned CIT(A). 113. We have considered the rival submissions. We find that the order of CIT(A) is in line with the Tribunal order in assessee s own case where relief was allowed to the extent of 50% of the expenses on the basis that such expenses are in respect of employees .....

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R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is squarely covered in favour of the assessee by the Tribunal order in assessee s own case in I.T.A. No.795/Del/87 for assessment year 1983-84 and copy of relevant order is available on pages 347 and 349 of the paper book. 116. We have considered the rival submissions. We find that this issue is covered in favour of the assessee by the Tr .....

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ness of the assessee. 118. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is squarely covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 1993-94 and 1994-95 and copy of relevant order is available on pages 200 to 231 of the paper book. 119. We have considered the rival submissions. We find that this issue is covered in favour .....

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wing deduction of ₹ 2,53,743/- being expenses on foreign travelling on the wives of the Directors of the Company by not appreciating the facts of the case and the judicial pronouncement relied upon by the appellant. 122. It was submitted by Learned A.R. of the assessee that this issue is identical to ground No. 2 in assessee s appeal for assessment year 1987-88 in I.T.A. No.336/Lkw/2010 and this appeal is already heard by the Tribunal and therefore, the issue in the present year may be dec .....

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vour of the assessee by the Tribunal order in assessment year 1983-84 and 1984-85 and the Tribunal deleted the disallowance in that year. In the present year, Learned D.R. of the Revenue could not point out any difference in facts and therefore, in the present year also, we do not find any reason to take a contrary view and therefore, in line with the Tribunal decision in assessee s own case for assessment year 1987-88, this issue is decided in favour of the assessee. This ground is allowed. 124 .....

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of learned CIT(A). 126. We have considered the rival submissions. We find that it is noted by learned CIT(A) on page No. 17 of his order that out of foreign travelling expenses in respect of four spouses of directors of the assessee company, the expenses of ₹ 17,301/- regarding Mrs. R. Singhania is allowable otherwise also because she is a qualified Doctor and was looking after the hospital for employees at Kota plant of the assessee company. The CIT(A) has confirmed this disallowance in .....

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e no difference in facts could be pointed out by Learned D.R. of the Revenue, we delete this disallowance by respectfully following the Tribunal order. Accordingly ground No. 2(a) is allowed. 127. Regarding ground No. 2(b) of the appeal, Learned A.R. of the assessee reiterated the same contentions which were raised before the CIT(A). Learned D. R. of the Revenue supported the order of learned CIT(A). 128. We have considered the rival submissions. We find that it was the submission of the assesse .....

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erefore, without pointing out any single reason for making disallowance, the disallowance made by the Assessing Officer on this basis alone that this is reported by special tax auditors that this much expenditure is incurred on guests is not justified and therefore, we delete this disallowance. Ground No. 2(b) is allowed. 129. Ground No. 3 is as under: 3. Guest House Expenses d) Confirming the addition of ₹ 1,66,962/- on account of depreciation on guest house without appreciating that the .....

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n its appeal for assessment year 1987-88 in I.T.A. No.336/Lkw/2010 as per ground No. 13(a) and 13(b) and since this appeal is already heard, this issue may be decided in line with the decision of the Tribunal in assessment year 1987-88. Learned D.R. of the Revenue supported the order of CIT(A). 131. We have considered the rival submissions. We find that in assessment year 1987-88 also, similar issue was raised by the assessee before the Tribunal and in that year, as per Para 263 of the Tribunal .....

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bunal order in assessee s own case for assessment year 1985-86. Accordingly, in the present year also, the disallowance of ₹ 1,00,000/- being depreciation on other assets of guest house is deleted and accordingly, ground 3(b) is allowed. 133. Regarding ground No. 3(c) i.e. in respect of ad hoc disallowance of ₹ 1,00,000/- towards other maintenance expenses of guest house, Learned A.R. of the assessee reiterated the same contentions which were raised before CIT(A). Learned D. R. of th .....

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him in assessment year 1987-88, a further addition of ₹ 1 lac will be appropriate and in this manner, he has confirmed the disallowance of ₹ 1 lac out of total disallowance of ₹ 10.02 lac. It could not be shown by Learned A.R. of the assessee that in assessment year 1987-88, any relief was allowed by Tribunal on this issue and therefore, the order of CIT(A) is in line with the order of CIT(A) in assessment year 1987-88, which is already upheld by the Tribunal on this issue and .....

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d therefore, in the present year also, this issue may be decided on similar line. 137. Learned D. R. of the Revenue supported the orders of the authorities below. 138. We have considered the rival submissions. We find that in assessment year 1987-88, this issue was decided by the Tribunal as per Para 270 of its order and it was held by the Tribunal in that year that since CIT(A) has upheld the disallowance of 50% of the expenses, his order is in line with the Tribunal order for assessment year 1 .....

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n its appeal for assessment year 1987-88 as per ground No. 3 in that year and therefore, in the present year also, this issue may be decided on similar line. 141. Learned D. R. of the Revenue supported the order of learned CIT(A). 142. We have considered the rival submissions. We find that in assessment year 1987-88, this issue was decided by the Tribunal as per Para 223 of its order against the assessee by following the judgment of Hon'ble Apex Court rendered in the case of Britannia Indust .....

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ar 1987-88, this issue was decided by learned CIT(A) in favour of the assessee and against this decision of CIT(A), Revenue filed appeal before the Tribunal and this issue was raised by the Revenue in its appeal as per ground No. 41 and therefore, in the present year also, this issue may be decided on similar line. 145. Learned D. R. of the Revenue supported the order of learned CIT(A). 146. We have considered the rival submissions. We find that it is noted by the Tribunal in Para No. 139 of the .....

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Court in assessment year 1982-83, consequential relief can be allowed in the present year. Hence, we confirm the disallowance on this issue with these observations. Accordingly ground No. 6 is rejected along with these observations. 147. Ground No. 7 is as under: 7. Rate and Taxes Not allowing depreciation of ₹ 51,622/- on WDV of the expenses offered as being capital expenditure under the head "Licence Fee" in earlier year. 148. Learned A.R. of the assessee reiterated the same co .....

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. In the assessment order, it is noted by the Assessing Officer on page No. 41 that in assessment year 1989-90, the CIT(A) has confirmed the disallowance of depreciation on such capital expenditure of ₹ 2,32,572/-. We are of the considered opinion that merely because the assessee has incurred a capital expenditure, the depreciation cannot be allowed unless the assessee is able to establish that such capital expenditure has resulted into creation of a capital asset and what is the nature of .....

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his ground is rejected. 150. Ground No. 8 is as under: 8. Interest Paid In not allowing a sum of ₹ 1,05,733/- being the amount of genuine interest paid by appellant. 151. It was submitted by Learned A.R. of the assessee that similar issue was raised by the assessee in its appeal for assessment year 1987-88 as per ground No. 6 in that year and therefore, in the present year also, this issue may be decided on similar line. 152. Learned D. R. of the Revenue supported the order of learned CIT( .....

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favour of the Revenue. This ground is rejected. 154. Ground No. 9 is as under: 9. Capital Expenditure debited to Profit & Loss A/c In confirming the disallowance of ₹ 1,26,82,673/- being expenses incurred on repairs to Plant & Machinery held as capital expenditure by Special Tax Auditors without appreciating that the opinion of special tax auditors was not sacrosanct. 155. It was submitted by Learned A.R. of the assessee that similar issue was raised by the assessee in its appeal f .....

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inst the assessee as per Para No. 261 by following the judgment of Hon'ble Apex Court rendered in the case of CIT vs. Sri Mangayarkarasi Mills P. Ltd. [2009] 315 ITR 114 (SC). Accordingly, in the present year also, this issue is decided against the assessee. This ground is rejected. 158. Ground No. 10 is as under: 10. Cash payment in excess of ₹ 10,000/- Confirming disallowance of an order of ₹ 4,11,645/- being genuine cash payment in excess of ₹ 10,000/- though all these p .....

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. 161. We have considered the rival submissions. We find that in assessment year 1987-88, this issue was decided by the Tribunal as per Para 253 of the Tribunal order and in that year, it is noted by the Tribunal that it was conceded by the assessee that this issue is covered against the assessee by the tribunal order for assessment year 1988-89. Accordingly, in the present year also, this issue is decided against the assessee. This ground is rejected. 162. Ground No. 11 is as under: 11. Employe .....

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year also, this issue may be decided on similar line. 164. Learned D. R. of the Revenue supported the order of learned CIT(A). 165. We have considered the rival submissions. We find that identical issue was raised in assessment year 1987-88 as per ground No. 9 and as per Para 251 of the Tribunal order and in that year, this issue was decided against the assessee. Accordingly, in the present year also, this issue is decided against the assessee. This ground is rejected. 166. Ground No. 12 is as u .....

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be decided on similar line. 168. Learned D. R. of the Revenue supported the order of learned CIT(A). 169. We have considered the rival submissions. We find that in assessment year 1987-88 while deciding ground No. 5 in that year, it was held by the Tribunal that 50% disallowance out of guest house expenses is justified and accordingly, in the present year also, part (a) of ground No. 12 is rejected in line with our decision for assessment year 1987-88. 170. Regarding part (b) of ground No. 12, w .....

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and it is not shown by the assessee that in assessment year 1987-88, the Tribunal has allowed any relief to the assessee over and above the relief allowed by learned CIT(A), we do not find any reason to interfere in the order of CIT(A) on this issue. Accordingly part (b) of ground No. 12 is rejected. 171. Ground No. 13 is as under: 13. Sales Promotion Expenses (a) Not allowing ₹ 1,65,585/- holding it to be entertainment expenses. (b) Upholding disallowance of ₹ 2,76,694/- (30% of to .....

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8, the issue in dispute was regarding confirming disallowance of ₹ 6,356/- holding it to be entertainment expenditure and deleted the disallowance of ₹ 2,51,313/- being expenditure on presentation articles to the extent of 30% of the total expenditure. In the present year also, the issues in dispute are similar i.e. Disallowance of ₹ 1,65,585/- by holding it to be entertainment expenditure and upholding disallowance to the extent of 30% of total disallowance. In assessment year .....

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