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2015 (11) TMI 290 - ITAT DELHI

2015 (11) TMI 290 - ITAT DELHI - TMI - Disallowance of prorata depreciation - Held that:- When a loan is waived/written off by an assessee, it is not an allowable deduction as it is capital in nature and similarly when the loan is waived in favour of assessee it retains its capital nature and does not result into a taxable receipt. It further submitted that when an asset is revalued up-ward depreciation allowance as per Income Tax Act remains as per WDV of assets. Similarly, the assessee pleaded .....

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any on railways for the wagons not reaching their destination and being reversed in all cases where the railways have been able to prove their delivery at some plant or stock yard of the assessee though not the original destination, appears to be a regular feature, in past many years. Thus there is sufficient force in the submissions of the assessee and this is a regular feature, which is normal debit in almost every year.Thereafter he further held that since this debit of ₹ 102 lakhs is o .....

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Disallowance of interest claimed on KFW Germany loan transfer to Foreign Exchange Fluctuation Reserve - Held that:- Admittedly this issue has arisen for the A.Y. 1998-99 onwards to the A.Y. 2002-03. The ITAT had deleted the disallowance in all these years. For the A.Y. 2007-08 the ITAT upheld the order of the Ld.CIT(A), where this disallowance has been deleted.

Depreciation on assets not in active use is covered in favour of the assessee and against the Revenue for all t .....

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Disallowance u/s 43B of provident fund dues deposited within the grace period - Held that:- The fact that the PF dues were deposited within the grace period, allowed under the respective Act, and before the due date of submitting the return u/s 139(1) of the Act is not in dispute - See Commissioner of Income Tax Versus AIMIL Limited and others [2009 (12) TMI 38 - DELHI HIGH COURT] wherein held the assessee can get the benefit if the actual payment is made before the return is filed, - .....

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the disallowance of pro-rata depreciation of ₹ 4,302.73 lakhs on account of downward revaluation of assets (by reduction) in A.Y. 2000-2001. 2. That the appellant seeks leave to add, amend, alter, abandon or substitute any of the above grounds at the time of hearing of appeal." ITA 4279/Del/2013 1. "The Ld. CIT(A) erred in law and on the facts in deleting the addition of prior period expenses amounting to Rs.l02 lacs". 2. "The Ld. CIT(A) erred in law and on the facts i .....

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IT(A) erred in law and on the facts in deleting the disallowance on depreciation on "Fiber Optic Computer Networking" and UPS amounting to ₹ 5.73 lacs". 6. "The Ld. CIT(A) erred in law and on the facts in deleting the disallowance made u/s 43B of the Income Tax Act, 1961, amounting to ₹ 297.67 lacs". 7. "The Ld. CIT(A) erred in law and on the facts in restoring back the matter to the file of the AO for verification on account of depreciation on the intan .....

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7; 6S1S.09 lacs made on account of LTC," 11. "The appellant craves to amend modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal." 2. Facts of the case:- The assessee is a Public Sector Undertaking and it filed its return of income on 30.9.2009 declaring income of ₹ 10,08,853.11 lakhs. This return of income was revised on 25.3.2009 declaring income of ₹ 10,09,125.59 lakhs. The A.O. completed the assessment u/s 143(3) .....

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i KK Jaswal, the Ld.Sr.D.R. on behalf of the Revenue and Shri MP Rastogi, the Ld.Counsel for the assessee. 5. On a careful consideration of the facts and circumstances of the case, on perusal of orders of lower authorities, material placed on record, we hold as follows. 6. We first take up assessee's appeal in ITA 3867/Del/2013 for the A.Y. 2009-10. 7. Admittedly the very same issue in the assessee's own case arose for the A.Ys 2000-2001, 2001-02 and 2002-03 as well as in the subsequent .....

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072 crores granted by it to Indian Iron & Steel Co. Ltd. and the balance amount of ₹ 3001 crores was transferred to capital reserve which was utilized by the assessee to re-value down wards its fixed assets which had got capitalized at a high value on account of various expenses during construction. The Assessing Officer disallowed the depreciation on proportionate basis on reduction amount of assets relying upon the provisions of section 43(1), 43(6) & 32 (1) which according to hi .....

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assessee. The assessee submitted before the Assessing Officer that when a loan is obtained if it is of a capital nature and when loan is utilized, it does not become an expense. Therefore, when a loan is waived/written off by an assessee, it is not an allowable deduction as it is capital in nature and similarly when the loan is waived in favour of assessee it retains its capital nature and does not result into a taxable receipt. It further submitted that when an asset is revalued up-ward depreci .....

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ITAT in its order dated 25.6.2009 for assessment years 2000-01 to 2002-03 had confirmed the similar addition. Following the same, the Ld CIT(A) confirmed the action of Assessing Officer. 7.1. Consistent with the view taken therein, we dismiss this ground of the assessee. 8. In the result the appeal of the assessee is dismissed. 9. We now take up Revenue's appeal in ITA 4279/Del/2013. 10. The first ground of appeal is regarding allowability of prior period expenses of ₹ 120 lakhs. The .....

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to Ludhiana Stock yard only. Ludhiana records them in Material Diversion Statement and takes it into stock. The railways, in due course of time trace the wagons not delivered at its destination but at another place. Then they give the details to the company and it verifies them, after which it makes the necessary adjustments in accounts. It so happened, that TMT Steel dispatched on IPT (Inter Plant Transfer) basis in FY 2007-08 got delivered at BSO (Branch Sales Office) Bhilai in February 2008. .....

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7 of the Act CIT [A] has been allowing similar Prior Period Expenses from AY 2001-02 onwards on the basis of crystallization / accrual-including AY 2007-08. 10.2. The First Appellate Authority has allowed the claim of the assessee by observing that lodging of the claim by the company on railways for the wagons not reaching their destination and being reversed in all cases where the railways have been able to prove their delivery at some plant or stock yard of the assessee though not the original .....

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eted in this year also. 10.3. We find no infirmity in the order of the First Appellate Authority. Hence we uphold the same and dismiss this ground of the Revenue. 11. The next issue is regarding allowability of depreciation on water supply and sewerage plant. 11.1. Admittedly this issue is covered in favour of the assessee and against the Revenue by the decision of the ITAT in a ssessee's own case for the A.Y. 2007-08 in order dt. 25.10.2012 in ITA 1488/Del/2011. The findings are at para 46 .....

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1998-99 onwards to the A.Y. 2002-03. The ITAT had deleted the disallowance in all these years. For the A.Y. 2007-08 the ITAT upheld the order of the Ld.CIT(A), where this disallowance has been deleted. The issue has been discussed at paras 46 to 48 of that order. For the sake of brevity, we do not extract the same. Consistent with the view taken therein, we dismiss this ground of the Revenue. 14. The next ground of Revenue is on the issue of depreciation on assets not in active use of ₹ 2 .....

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dmittedly this issue is covered in favour of the assessee by the order of the Tribunal for the A.Y. 2007-08, wherein the Revenue was directed to grant depreciation at the rate of 60%, by following the judgement of the Jurisdictional High Court in the case of CIT vs. BSES Yamuna Powers Ltd. (in ITA 1267 order dt. 31.8.2010. Consistent with the view taken therein we dismiss this ground of the Revenue. 16. The next ground is on disallowance u/s 43B of provident fund dues deposited within the grace .....

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