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2015 (7) TMI 685 - ITAT PUNE

2015 (7) TMI 685 - ITAT PUNE - TMI - Disallowance of Provision for warranty obligation - Held that:- As relying on assessee’s own case for assessment years 1998-99 and 1999-2000 [2014 (12) TMI 680 - ITAT PUNE] we find that this issue has been decided in favour of the assessee wherein held that the assessee made a provision on account of provision for warranty with respect to the products sold - Considering the opening balance of provision, the differential amount of provision was debited to the .....

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ld land - Held that:- This issue has been decided against the assessee in assessment years 1998-99 and 1999-2000 by the Tribunal wherein held an accepted position that the issue regarding assessee’s claim for deduction of proportionate premium of leasehold land amortized and charged to the Profit & Loss Account for the year under consideration is liable to be decided in terms of the judgement of the Hon’ble Supreme Court in the case of Govind Sugar Mills Ltd. vs. CIT, (1997 (7) TMI 16 - SUPREME .....

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ization while recognizing incomes on application of percentage of completion method in the case of long term contracts in the light of the AS-7 issued by the ICAI. Accordingly, this ground in the appeal of the assessee is accepted.- Decided against revenue.

Disallowance of expenditure on computer software - Held that:- A perusal of the order of the Co-ordinate Bench in assessee’s own case for assessment years 1998-99 and 1999-2000 shows that the Tribunal followed the judgement of the .....

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turing operations of the assessee. Such softwares have been identified as Autocad, project management software, designing software, etc.. The assessee is in the business of manufacturing of boilers and heat transfer equipment and therefore the aforesaid softwares form part of its profits making apparatus and thus it is liable to be considered as capital expenditure in view of the judgement of the Hon’ble Bombay High Court in the case of Raychem Rpg. Ltd. (supra). - Decided against assessee.

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by the CIT(A) and we find no force in the Ground of Appeal raised by the Revenue. With regard to assessee’s claim for allowance of depreciation @ 100% in respect of plant & machinery used in the manufacture of heat pumps is concerned, the same has been appropriately denied by the lower authorities. The CIT(A) has rightly pointed out that machinery & plant used in the manufacture of heat pumps is not eligible for depreciation @ 100% as it does not find a place in any of the items in the Deprecia .....

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hereby affirmed.- Decided against assessee

Addition on account of Lease Rental income - Held that:- The assessee admittedly maintains books of account according to the mercantile system of accounting. However, the assessee in its books of account have not recognized the lease rental income due from (i) Modi Alkalies; (ii) Inertia; (iii) Parasrampuria Industries Ltd.; and, (iv) Parasrampuria International Ltd. on the ground that these companies are in financial distress, therefore, no .....

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t:- This issue was raised by the Revenue in its appeal for assessment year 1998-99 wherein the Co-ordinate Bench affirmed the findings of the Commissioner of Income Tax (Appeals allowing the claim of the assessee for deduction u/s 80-I/80-IA of the Act with respect to the industrial undertakings manufacturing products called Woodpac and Process Integrated Boilers. - Decided against revenue.

Computation of deduction under section 80HHC - AO while recomputing the deduction added excise .....

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). We, therefore, remit these issues to the file of the Assessing Officer to re-compute the deduction u/s. 80HHC, accordingly. - Decided in favour of assessee for statistical purposes.

Deduction under section 35AB allowed in respect of lump-sum fee for technical know-how paid in earlier years - CIT(A) has directed the Assessing Officer to allow deduction u/s 35AB of the Act in respect of know-how fee whose innings u/s 35AB of the Act have began in the past and where the balance eligi .....

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th reference to the amounts payable for process know-how is concerned, the same in our view has been appropriately decided by the CIT(A). Notably, the CIT(A) has noticed that assessee is following the mercantile system of accounting and the word “paid” has been defined in section 43(2) of the Act to include the incurrence of liability also. In coming to such conclusion, the CIT(A) has followed the judgement of the Hon’ble Bombay High Court in the case Padamjee Pulp and Paper Mills Ltd. (1993 (10 .....

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es that so far as the claim of deduction of 1/6th cost is concerned, the same was allowed by the Assessing Officer in the respective years. In view of the aforesaid factual matrix, the direction of the CIT(A) is quite infructuous and in-fact was not called for. As a consequence, the decision of the CIT(A) on this aspect is set-aside as being infructuous. - Decided in favour of revenue for statistical purposes.

Provisions for reimbursement of medical expenses - CIT(A) allowed claim - H .....

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certificates, not recovered - Held that:- In the instance case, the assessee under similar circumstances has written off the amount of TDS certificates not received. Therefore, in our considered view it has to be allowed as bad debts. We find no infirmity in the order of CIT(A). - Decided in favour of assessee.

CIT(A) has rightly directed the Assessing Officer to exclude 90% of the amount of lease rental for computing deduction under section 80HHC. - Decided against revenue. - ITA Nos .....

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Revenue. ITA No.1247/PN/2005 has been filed by the assessee impugning the order of the Commissioner of Income Tax (Appeals) dated 17.02.2005 for the assessment year 2000-01 passed under section 143(3) of the Act. The Revenue has filed Cross Appeal in ITA No.1290/PN/2005. The assessee has filed appeal in ITA No.1248/PN/2005 against the order of the Commissioner of Income Tax (Appeals) dated 17.02.2005 for the assessment year 2001-02 passed under section 143(3) of the Act. The Revenue has filed Cr .....

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essories and treasury operations. The assessee filed its return of income for the assessment year 2000-01 on 30.11.2000 declaring total income of ₹ 14,88,97,010/-. In assessment year 2001-02, the assessee filed its return of income on 31.10.2001 declaring total income of ₹ 8,20,84,180/-. The return of income for both the impugned assessment years was subject to scrutiny assessment. During the course of scrutiny assessment, the Assessing Officer made additions/disallowances in the inc .....

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(xi) Claim of deduction under section 80IA. Aggrieved by the assessment orders in the respective assessment years, the assessee filed appeals before the Commissioner of Income Tax (Appeals). 3. The Commissioner of Income Tax (Appeals) vide separate impugned order for assessment year 2000-01 and assessment year 2001-02 both dated 17.02.2005 partly accepted the appeals of the assessee. Against the findings of the First Appellate Authority, both, the assessee and the Revenue have come in appeal be .....

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DR agreed with the statement of the ld. AR. 5. Since, the issues raised in the appeals for the assessment years 2000-01 and 2001-02 are common, all the four appeals (ITA Nos. 1247, 1248, 1290 & 1291/PN/2005) are taken up together for adjudication. The Ld. AR of the assessee has placed on record a copy of order of the Tribunal dated 15.12.2014 in assessee s own case in ITA No.1245/PN/2005 and ITA No.1246/PN/2005. 6. The assessee in its appeal for the assessment year 2000-01 has assailed the .....

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6.1 The Revenue in its appeal for the same assessment year has raised six grounds. In the appeal of the Revenue ground Nos.5 and 6 are general in nature, therefore, they do not require any adjudication. The ground Nos.1 to 4 in Revenue s appeal are as under :- (i) Provision made in accordance with AS-7 (same as ground No.iii of assessee s appeal). (ii) Claim of depreciation @ 100% allowed on certain items of plant (counter to ground No.v of assessee s appeal). (iii) Deduction allowed under secti .....

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llowed the same by following the order of CIT(A) in the earlier assessment years. 7.1. The Ld. AR of the assessee pointed out that in assessment year 1998-99 similar ground was raised by the assessee. The Co-ordinate Bench of the Tribunal decided the issue in favour of the assessee. 7.2. After perusal of the order of Co-ordinate Bench dated 15.12.2014 in assessee s own case for assessment years 1998-99 and 1999-2000 we find that this issue has been decided in favour of the assessee. The findings .....

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of the fact that it is under an obligation to provide warranty for a period of one to two years on the products sold by it on account of any manufacturing defect found later. In such a situation, assessee was obliged to replace the product or repair the product free of cost during the period of warranty. The Assessing Officer as well as the CIT(A) disallowed the deduction on the ground that the Provision for warranty was only a contingent liability. This stand of the income-tax authorities is si .....

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ars 1994-95 and 1995-96 was followed and issue was allowed in favour of the assessee. Following the aforesaid precedents, which continue to hold the field, we direct the Assessing Officer to give effect to the aforesaid precedents, and the assessee accordingly succeeds on this Ground. Since there has been no change in the facts and circumstances in the assessment year under consideration, we respectfully follow the decision of the Co-ordinate Bench. This ground of appeal is accordingly decided i .....

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ion premium paid on leasehold land by following the order of the Commissioner of Income Tax (Appeals) in assessment year 1993-94. In appeal, the Commissioner of Income Tax (Appeals) has confirmed the findings of the Assessing Officer. 8.1 The Ld. AR of the assessee fairly submitted that this issue has been decided against the assessee in assessment years 1998-99 and 1999-2000 by the Tribunal. We observe that this issue has been considered by the Co-ordinate Bench in assessment years 1998-99 and .....

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easehold land amortized and charged to the Profit & Loss Account for the year under consideration is liable to be decided in terms of the judgement of the Hon ble Supreme Court in the case of Govind Sugar Mills Ltd. vs. CIT, (1998) 232 ITR 319 (SC) against the assessee. Accordingly, the orders of the authorities below on this aspect are upheld and assessee fails. Accordingly, ground No. 2 in the appeal of assessee is dismissed. 9. The third ground raised by the assessee in appeal relates to .....

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lient as per schedule of payments. The bills raised are always more than the revenue that should be recognized on the basis of project completion method. The adjustment is required to be made to adjust excess billing. The adjustment is made in accordance with AS 7 by creating a provision Contribution Equalization Provision . The Assessing Officer rejected this method of making adjustment by the assessee. In the first appeal, the Commissioner of Income Tax (Appeals) partly accepted the claim of t .....

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, the Tribunal vide its order dated 03.09.2014 (supra) in the assessee s own case has upheld the stand of the assessee by following the decision of the Pune Bench of the Tribunal on a similar issue in the case of Thermax Babcock & Wilcox Ltd. vs. DCIT vide ITA Nos.157 & 158/PN/1995 dated 11.05.2001 for assessment years 1990- 91 & 1991-92. The Tribunal in its order dated 03.09.2014 (supra) noted that in the case of Thermax Babcock & Wilcox Ltd. (supra) which was a group company of .....

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round too. As a consequence, whereas Ground of Appeal of the assessee is allowed that of the Revenue is dismissed. There has been no change in the facts and circumstances in the present year, nor there is any change in the accounting treatment given by the assessee. We do not find any reason to deviate from the view taken by the Co-ordinate Bench in assessment years 1998-99 and 1999-2000. Accordingly, this ground in the appeal of the assessee is accepted and the ground raised by the Revenue in i .....

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he findings of the Assessing Officer. 10.1 The Ld. AR of the assessee pointed out that an identical issue was raised in the appeals for assessment years 1998-99 and 1999-2000 by the assessee, as well as, the Revenue. The Co-ordinate Bench dismissed this ground raised in the appeals of both the parties. 10.2 A perusal of the order of the Co-ordinate Bench in assessee s own case for assessment years 1998-99 and 1999-2000 shows that the Tribunal followed the judgement of the Hon ble Bombay High Cou .....

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8 (Bom.). The Hon ble Bombay High Court upheld the order of the Tribunal whereby the expenditure incurred on acquisition of software which did not form part of the profit making apparatus of the assessee was treated as a revenue expenditure. In the said context, it is to be noted that the CIT(A) has given a finding that expenditure of ₹ 22,16,107/- was incurred on acquisition of software connected with the manufacturing operations of the assessee. Such softwares have been identified as Aut .....

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6,107/- is unjustified having regard to the judgement of the Hon ble Bombay High Court in the case of Raychem Rpg. Ltd. (supra). Further, the CIT(A) has recorded a finding that expenditure to the extent of ₹ 17,97,051/- has been incurred on acquisition of routine standard softwares such as Windows 95, MS Office, etc. which are revenue in nature. Ostensibly, assessee s business is of manufacturing of boilers and other heat transfer equipment and the aforesaid softwares merely facilitate ass .....

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Ltd. (supra). In the result, the Ground of Appeal No.7 of the assessee as well as the Grounds of Appeal No.7.1 & 7.2 of the Revenue are dismissed. Respectfully following the order of Tribunal in earlier assessment years in assessee s own case, we dismiss this ground in the appeal of assessee. 11. The fifth ground in appeal of the assessee is with respect to claim of 100% depreciation on plant and machinery. The Revenue has also impugned the findings of the Commissioner of Income Tax (Appeals .....

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as assailed the findings of the Commissioner of Income Tax (Appeals) in respect of all the plants except Plant No.11. 11.2 Similar claims were made by the assessee in respect of Plant No. 11 and the Revenue in respect of other plants (excluding Plant No. 11). The issue was decided by the Tribunal in assessee s own case for assessment years 1998-99 and 1999-2000 as under :- 35. Now, we may first take-up assessee s claim for depreciation 100% with respect to the plant & machinery used in the m .....

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s/fluid heating systems, in our view, is not justified. The Assessing Officer has attempted to read into the statute a word which is conspicuous by its absence. Therefore, in our view, having regard to the item (r) read with item (e) of Entry 3(xiii) of the Depreciation Table, the claim of the assessee has been rightly allowed by the CIT(A) and we find no force in the Ground of Appeal raised by the Revenue. 36. Now, with regard to assessee s claim for allowance of depreciation @ 100% in respect .....

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ee as well as the Grounds of Appeal Nos.8.1 & 8.2 of the Revenue are dismissed. The issue raised by both the sides are identical to the one already adjudicated by the Tribunal. Both the sides have not been able to controvert the findings of the Tribunal in earlier assessment years. We find no reason to take a contrary view. Accordingly, the ground with respect to claim of depreciation in assessee s appeal and the appeal of Revenue is dismissed. 12. The sixth ground raised by the assessee in .....

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he same. The CIT(A) following the decision of her predecessor restricted the disallowance to 2.5% of the gross income. Not being satisfied with the order of the CIT(A), assessee is in appeal before us. 46. On this aspect, the Ld. Representative for the assessee conceded that the disallowance as confirmed by the CIT(A) has been a subjectmatter of consideration by the Tribunal in assessment year 1997-98 and the same stands confirmed vide order dated 03.09.2014 (supra). In view of the aforesaid pre .....

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d. AR of the assessee submitted that the assessee is also engaged in the business of leasing some of the products manufactured by it. In notes attached to the return of income, the assessee has mentioned that lease rentals of ₹ 57,75,268/- have not been included in the total income. The method of accounting followed by the assessee is in line with Accounting Standard I prescribed by CBDT under section 145 of the Act. The lease rentals in respect of (i) Modi Alkalies, (ii) Inertia, (iii) Pa .....

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e same should have been included in total income of the assessee. 13.2 In first appeal, the Commissioner of Income Tax (Appeals) agreed with the proposition of the Assessing Officer, however, the Commissioner of Income Tax (Appeals) directed the Assessing Officer to give relief to the assessee in following assessment year by treating the lease rental amount as bad debt. The Ld. AR of the assessee contended that once the assessee has declared the amount as non recoverable and has written-off as b .....

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ossing over from one assessment year to the next assessment year. The Commissioner of Income Tax (Appeals) ought to have restricted to the issue in assessment year 2000- 01 only. To support his submissions, the Ld. DR placed reliance on the judgements of Hon ble Supreme Court of India in the case of ITO vs. Murlidhar Bhagwan Das reported as 52 ITR 335 (SC) and CIT vs. Manick Sons reported as 74 ITR 1 (SC). The Ld. AR of the assessee controverting the submissions of the Ld. DR submitted that befo .....

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vs. Murlidhar Bhagwan Das (supra) was considered and distinguished. 13.4 We have heard the rival submissions made by both the sides and have perused the orders of the authorities below. We have also considered the judgments on which both the sides have placed reliance. The assessee is a public limited company and its accounts are subject to audit. The assessee admittedly maintains books of account according to the mercantile system of accounting. However, the assessee in its books of account ha .....

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) has upheld the findings of the Assessing Officer in principle which in our opinion is the correct proposition. Accordingly, the same is upheld. The First Appellate Authority directed the Assessing Officer to allow claim of the assessee in subsequent assessment year as write off of bad debts. It is an undisputed fact that the assessee has not received rental incomes from the aforesaid companies in the impugned assessment year. Since, the rental incomes have not been actually received, therefore .....

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dings of the Commissioner of Income Tax (Appeals) with respect to allowability of deduction under section 80-IA of the Act to the assessee in respect of its unit Woodpack . The Ld. AR of the assessee submitted at the outset that this issue was considered and decided in favour of the assessee by the Co-ordinate Bench of the Tribunal in Revenue s appeal in assessment year 1998-99 and assessment year 1999-2000. The ld. DR admitted the fact, however, she strongly defended the findings of Assessing O .....

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ngs, namely, (i) Woodpac (manufacturing) - ₹ 21.84 lacs; and, (ii) Process Integrated Boilers - ₹ 138.06 lacs. The only reason weighing with the Assessing Officer to deny the deduction u/s 80-I/80-IA of the Act in respect of the two industrial undertakings was that similar claim was rejected in the re-assessment proceedings for assessment year 1992-93. Subsequent to assessment year 1992-93, and upto assessment year 1997-98 also the claim was disallowed by the Assessing Officer. 66. O .....

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148 of the Act. For assessment year 1992-93, the action of the Assessing Officer to initiate proceedings u/s 147/148 of the Act was quashed by the appellate authorities and it has been stated before us in the course of hearing that the same has been affirmed by the Hon ble Bombay High Court vide its order in Income Tax Appeal (L) No.815 of 2009 dated 24th June, 2009. From assessment years 1993-94 to 1997-98 the claim of the assessee for deduction u/s 80-I/80-IA of the Act has been upheld by the .....

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alled Woodpac and Process Integrated Boilers. As a consequence, the order of the CIT(A) is hereby affirmed. 14.2 The Ld. DR has not been able to controvert the findings of the Tribunal in the earlier assessment years. The facts and circumstances in the assessment year under appeal are identical. We do not find any reason to take a different view. Accordingly, this ground of appeal of the Revenue is dismissed. 15. In result, the appeal of the assessee as well as the appeal of the Revenue for asse .....

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nder appeal. 2. The learned CIT (Appeals) erred in confirming action of the Assessing Officer in attributing ₹ 15 lacs as expenditure incurred in relation to dividend and interest-free income rejecting the contention of the Appellant that no such expenditure was, in fact, incurred for earning such income and accordingly none was so attributable. In any event, the estimate made by the AO and confirmed by the CIT(A) is high-pitched. 3. The learned CIT (Appeals) erred in confirming disallowan .....

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es of the case and in law the learned CIT(Appeals) erred in confirming addition of ₹ 5,60,000/- made by the Assessing Officer to the income of the appellant when in fact he should have deleted the same. 6. The learned CIT (Appeals) erred in not disposing of the ground of appeal concerning disallowance, as capital expenditure, an amount of ₹ 74,78,682/- being the cost of computer software. 7. On the facts and in the circumstances of the case and in law the learned CIT Appeals erred in .....

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CIT(A), having confirmed that the following items of income were rightly included in total turnover, erred in failing to direct the AO not to exclude them from the profits of the business; the action of the AO in including the said receipts in total turnover and also excluding them under Explanation (baa) has, in any event, doubly impacted the claim of the Appellant to deduction u/s 80HHC: 1 Service Charges 4,15,02,309 2 International Service charges 69,89,818 The learned CIT(A) further erred i .....

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ommon expenses. 11. The learned CIT (Appeals) erred in confirming & assessing income of ₹ 2,01,25,745/- under the head 'Other Sources' hence rejecting the contention of the appellant that it was assessable under the head 'Business income' Your appellant reserves the right to add to, alter or amend any of the above grounds of appeal, if necessary. 18. The first ground raised by the assessee in its appeal for assessment year 2001-02 relates to Retention Money forming part .....

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the assessee as not pressed. 20. The third ground of appeal raised by the assessee in appeal is with regard to provision for warranty obligation. Similar ground was raised by the assessee in assessment year 2000-01 in ITA No.1247/PN/2005. Undisputedly, the facts and circumstances in the present assessment year and the earlier assessment year are similar. Therefore, this ground of appeal of the assessee is allowed for the reasons stated in para 7 above. 21. The fourth ground raised by the assess .....

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h addition has been made by the Assessing Officer in the assessment order. Even before us, the ld. AR of the assessee has not made any submission on this ground. Therefore, this ground of appeal of the assessee is dismissed. 23. The sixth ground raised by the assessee in its appeal is with regard to disallowance of expenditure on acquiring computer softwares. The Revenue has also impugned the findings of CIT(A) on this issue in ground No.5 of its appeal. This issue has been considered in appeal .....

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of assessee, as well as Revenue. Both the sides have not been able to show any distinguishing factor in the present assessment year. We find no reason to deviate from the view taken in earlier assessment years. Accordingly, this ground of appeal of the assessee and the Revenue is rejected for the details reasons given in para 10 hereinabove. 24. The seventh ground raised by the assessee in its appeal is with regard to claim of depreciation at the rate of 100% on plant and machinery installed in .....

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und Nos.8, 9 and 10 of appeal of the assessee is directed against the findings of the CIT(A) in respect of deduction under section 80HHC claimed by the assessee. On the other hand, the Revenue in ground Nos.9 and 10 of its appeal has assailed the relief granted to the assessee in computation of deduction under section 80HHC. 25.1 The Assessing Officer rejected the assessee s computation of deduction under section 80HHC. The Assessing Officer while recomputing the deduction added excise duty and .....

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Brokerage/Insurance 13,056,009 xi) Miscellaneous receipts 20,452,388 The Assessing Officer further excluded 90% of the following items from the business profits: Misc. Income/receipts 20,452,388 USA - Service charges 41,502,309 International Service Charge 6,989,818 Premium on forward contract 240,826 25.2 In appeal before the CIT(A), the assessee placed reliance on the order of the Tribunal in ITA No.970/PN/2001 for assessment year 1997-98 in assessee s own case. The CIT(A) in the light of the .....

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e have examined the order of the Co-ordinate Bench in ITA No.970/PN/2001 decided on 03.09.2014 in assessee s own case. We observe that majority of the items that have been disputed by the Revenue have already been considered by the Tribunal and decided in favour of the assessee. The CIT(A) has granted relief to the assessee in accordance with the decision of the Tribunal referred above. The ld. DR has not been able to controvert the findings of the Tribunal. Thus, the ground raised by the Revenu .....

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d in export turnover cannot be included in total turnover. As far as miscellaneous receipts are concerned, the contention of the assessee is that the same is covered by the order of the Hon ble Bombay High Court in the case of Pfizer Ltd. (supra). We, therefore, remit these issues to the file of the Assessing Officer to re-compute the deduction u/s. 80HHC, accordingly. Thus, ground Nos. 8, 9 and 10 of appeal of the assessee are allowed for statistical purposes. 26. In ground No.11, the assessee .....

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espect of lump-sum fee for technical know-how paid in earlier years. This ground has been considered by the Tribunal in assessee s own case for assessment year 1998-99. The Co-ordinate Bench decided the issue with following observations :- 5. Apart from the aforesaid, another issue relating to the determination of deduction u/s 35AB of the Act before the CIT(A) was in relation to lump-sum fee for know-how paid in the earlier years. On this aspect, assessee had submitted before the CIT(A) that in .....

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in the past and where the balance eligible period u/s 35AB of the Act was not over. Against the aforesaid decision of the CIT(A), Revenue has raised the following Grounds of Appeal in its cross-appeal :- 2.1 On the facts and in the circumstances of the case, the Ld. CIT(A) erred in directing to allow deduction of 35AB in respect of lumpsum fee for know-how paid in earlier years, when in fact the present appeal lies for A.Y. 1998-99 only. 2.2 The CIT(A) ought to have restricted herself on the iss .....

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incurred by way of process know-how fee u/s 37(1) of the Act is liable to be decided against the assessee following the judgement of the Hon ble Supreme Court in the case of M/s Drilcos (India) Pvt. Ltd. vs. CIT, (2012) 348 ITR 382 (SC). Therefore, following the ratio of the judgement of the Hon ble Supreme Court in the case of M/s Drilcos (India) Pvt. Ltd. (supra), the expenditure incurred by the assessee for acquiring process know-how fee is to be allowed amortization in terms of section 35AB .....

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(A) has noticed that assessee is following the mercantile system of accounting and the word paid has been defined in section 43(2) of the Act to include the incurrence of liability also. In coming to such conclusion, the CIT(A) has followed the judgement of the Hon ble Bombay High Court in the case Padamjee Pulp and Paper Mills Ltd. (supra). At the time of hearing, the Ld. Representative for the assessee relied upon the decision of the Bangalore Bench of the Tribunal in the case of M/s Amco Powe .....

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we may take-up the Ground of Appeal Nos. 2.1 & 2.2 in the appeal of the Revenue wherein the CIT(A) has directed the Assessing Officer to allow deduction u/s 35AB of the Act in respect of know-how fee whose innings u/s 35AB of the Act have began in the past and where the balance eligible period u/s 35AB of the Act was not over. 10. In this context, it was a common point between the parties that the Assessing Officer has been allowing deduction to the assessee to the extent of 1/6th since asse .....

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irection of the CIT(A) is quite infructuous and in-fact was not called for. As a consequence, the decision of the CIT(A) on this aspect is set-aside as being infructuous. Thus for statistical purposes Grounds of Appeal No.2.1 & 2.2 of the Revenue are treated as allowed. Since the issue raised in the instant appeal of the Revenue is identical and both sides have not been able to controvert the facts and circumstances in the impugned assessment year, we decided the ground of appeal of Revenue .....

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or reimbursement of medical expenses. The Ld. AR of the assessee submitted that annual amount due to each employee is credited to his personal Medical Reimbursement Account. It is left to the discretion of employee to withdraw the amount as reimbursement, as and when required or to accumulate and claim at the time of retirement. The Assessing Officer held that since the amount has not been quantified or paid, under mercantile system of accounting, the expenditure cannot be said to have accrued o .....

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le Supreme Court of India in the case of Bharat Earth Movers vs. CIT reported as 245 ITR 428 (SC). The Ld. DR vehemently defended the order of the Assessing Officer and prayed for reversing the findings of the Commissioner of Income Tax (Appeals) on this issue. On the other hand, the Ld. AR of the assessee placed reliance on the findings of the Commissioner of Income Tax (Appeals). 29.2 Both sides heard. Records perused. We are of considered opinion that the amount of medical reimbursement are i .....

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income recognition from the contract activity in accordance with Accounting Standard 7 of ICAI. Similar issue was raised by the assessee as well as by the Revenue in assessment year 2000-01. The issue has been decided in favour of the assessee by placing reliance on the order of the Tribunal in assessee s own case for assessment year 1998-99. Since the facts and circumstances in the present assessment year are identical, this ground of appeal of the Revenue is dismissed for the similar reasons .....

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assessee decided to write off the value of TDS certificates, not recovered. The Assessing Officer disallowed the claim of assessee. In first appeal the CIT(A) allowed the claim of assessee by placing reliance on the decision of Mumbai Bench of Tribunal in the case of M.J. Exports Ltd. vs. JCIT reported as 88 ITD 18 (Bom.). 31.1 It is an undisputed fact that the assessee has accounted gross amount in its books of accounts and has paid tax thereon. It is also not disputed that the assessee has no .....

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to further buttress his submissions has drawn support from the order of Co-ordinate Bench of the Tribunal in the case of Kailash Vahan Udyog Ltd. vs. DCIT in ITA No.1077/PN/2011 for assessment year 2004-05 decied on 31.01.2013. In the said case, the assessee had not received TDS certificates from its customers. The assessee had already accounted for the said amount in respective years. The Tribunal held that the assessee in earlier years had considered the above amount in its turnover and shown .....

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evenue is with respect to deduction under section 80-IA claimed by the assessee. This issue has been considered in assessment year 2000-01 in the appeal of the Revenue. Since, there has been no change in the facts in the current assessment year, for the reason given in paragraph 14 above, this ground of appeal of the Revenue is dismissed. 33. The ground No.11 and 12 in the appeal of the Revenue are general in nature, therefore, they require no adjudication. 34. In the result, the appeal of the a .....

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Lease Rental Income ₹ 1,53,21,000/-; and, (ii) Insurance Refunds ₹ 33,92,019/-. The assessee in its return of income while computing deduction under section 80HHC had included certain items viz. (i) Rental income; (ii) Exchange gain; (iii) Excise duty refund; (iv) Sales tax refund; and, (v) Insurance refund in the profits of business. In re-assessment proceedings, the Assessing Officer while re-computing the deduction under section 80HHC reduced 90% of the incomes received by the as .....

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the assessee has come in second appeal before the Tribunal. 35.3 Shri H.P. Mahajani appearing on behalf of the assessee submitted that both lease rental income as well as insurance refund received during the relevant period are integral part of the business income eligible for deduction under section 80HHC of the Act. The ld. AR submitted that the assessee apart from manufacturing and selling of steam boilers, water exchangers, water treatment plant, carbon and metal film resistors, etc. is also .....

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hand, Smt. M.S. Verma representing the Department vehemently placed reliance on the order of the Commissioner of Income Tax (Appeals). 35.4 Both sides heard. Orders of the authorities below perused. The only issue raised by the assessee in appeal is whether lease rental incomes and insurance refunds received during the relevant period fall within the ambit of Explanation (baa) of section 80HHC. A bare perusal of section shows that deduction under section 80HHC is available on the profits derive .....

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lauses (iiia), (iiib), (iiic), (iiid) and (iiie) of section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India; 35.5 As per assessee s own admission, the assessee is giving on lease certain self-manufactured products like exhaust gas boilers, vapor absorption head pumps, chillers, etc.. .....

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