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2015 (11) TMI 1008

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..... g temple expense. - Decided in favour of assessee. Addition made on account of cess on green leaf - CIT(A) allowed claim - Held that:- This issue is covered by the decision of Hon’ble jurisdictional High Court in the case of AFT Industries Ltd. V. CIT (2004 (7) TMI 81 - CALCUTTA High Court ), wherein it has been decided by Hon’ble jurisdictional High Court that cess on green leaf is a normal business expenditure and once the Hon’ble jurisdictional High Court decides the issue in favour of assessee, same is covered - Decided in favour of assessee. Non-deduction of TDS on expenses of commission payment u/s. 195(1) - CIT(A) allowed claim - Held that:- Considering the Assessee's claim that the commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. Assessee's income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to deduct TDS on foreign payments. - Decided in favour of assessee. Deduction of wealth tax while computing book profit u/s. 115JB - Held th .....

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..... n petition delay can be condoned. In view of concession given by Ld. Counsel for the assessee, we condone the delay and admit the appeal for hearing. 3. It is also noticed that the revenue has moved adjourned petition in almost 19 cases out of the listed case of 23. This en block adjournment is not possible and hence, the possible case, we have taken up for hearing and decided the issue by rejecting the adjournment petition. In this case also, we have rejected the adjournment petition and heard the appeal. 4. The first issue in this appeal of revenue is as regards to the order of CIT(A) allowing deduction in respect of PF ESI payments without considering the provisions stipulated in section 36(1)(va) of the Act. For this, revenue has raised following ground no.1: 1. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in directing the AO to allow deduction in respect of Pf and ESI without considering the provisions stipulated in Sec.36(1)(va). 5. We have heard Ld. Counsel for the assessee and gone through facts and circumstances of the case. Briefly stated facts are that the assessee claimed deduction of PF and ESI payments amounting to ₹ .....

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..... second issue in this appeal of revenue is against the order of CIT(A) in allowing puja expenses and temple expenses as business expenses. For this, revenue has raised following ground no.2: 2. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in directing the AO to allow puja expense for ₹ 2,90,237/- and temple expense for ₹ 2,74,535/- since such expenses are non-business expenditure and the assessee company could not establish the nexus between the necessity of such expenditure and the purpose of the business carried on by the assessee company. 8. We have heard Ld. Counsel for the assessee and gone through facts and circumstances of the case. Briefly stated facts are that the AO disallowed puja expenses and temple expenses for the reason that these are not for a legitimate requirement of the business. The CIT(A) allowed the claim of the assessee. Aggrieved, revenue came in second appeal before Tribunal. 9. At the outset, Ld. Counsel for the assessee relied on the decision of Coordinate Bench of this Tribunal in assessee s own case in ITA No. 589/K/2012 for AY 2007-08 dated 19.12.2013, wherein Tribunal has allowed as under: Aggr .....

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..... u/s. 195(1) of the Act thereby invoking the provisions of section 40(a)(ia) of the Act. For this, revenue has raised following ground no. 4: 4. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in deleting the addition of ₹ 11,35,554/- on account of non deduction of TDS u/s. 40(a)(ia) in view of the judgment given by the Supreme Court in the case of M/s. Transmission Corporation of India reported in 239 ITR 587. 13. At the outset, Ld. Counsel for the assessee relied on the decision of Coordinate Bench of this Tribunal in assessee s own case in ITA No. 589/K/2012 for AY 2007-08 dated 19.12.2013, wherein Tribunal has allowed as under: 7. We have heard rival contentions and gone through facts and circumstances of the case. We find that Assessing Officer treated the commission paid to foreign agent as non allowable expenses as assessee failed to deduct TDS and he disallowed the commission to the extent of ₹ 11,35,554/-. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee by observing vide para-7.1 of his order as under:- 7.1 It is seen that AO made this disallowance on the basis of Supreme Court .....

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..... r this, revenue has raised following ground no.5: 5. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in allowing the deduction of Wealth Tax while computing profit u/s. 115JB without considering the fact that as per Explanation-1, Wealth Tax cannot be deducted to ascertain book profit u/s. 115JB. 15. We have heard Ld. Counsel for the assessee and gone through facts and circumstances of the case. Briefly stated facts are that the AO while computing book profit u/s. 115JB of the Act adjusting the book profit by the amount of provision made for Wealth Tax Act ₹ 1.20 lac. Aggrieved, assessee preferred appeal before CIT(A), who relying on the decision of Coordinate Bench of ITAT in the case of Usha Martin Industries Ltd. Vs. CIT (2003) 81 TTJ 158 (Cal) and allowed the claim of assessee. We find no infirmity in the order of CIT(A) as he allowed the claim of assessee by relying on the decision of ITAT in the case of Usha Martin Industries Ltd., supra. This ground of appeal of revenue is dismissed. 16. The sixth issue in this appeal of revenue is against the order of CIT(A) in deleting the disallowance of bad debt. For this, revenue has raised f .....

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..... ng that of Supreme Court and Calcutta High Court also support even alternate view taken by appellant that expenditure incurred for advancing money to subsidiary company is allowable as bad debt and even as business loss. The claim of appellant is therefore allowable as bad debt and even as business loss. The claim of appellant is therefore allowable in view of pronouncement of jurisdictional High court and Apex court. Even now, it is very clear from the Apex Court decision in case of TRF Ltd. Vs. CIT 323 ITR 398 (SC) that after 1st April, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee . Respectfully following the ratio laid down by Hon ble Calcutta High Court and Apex Court, the claim of appellant for bad debt of the amount advanced to M/s. Kanoi Plantation Pvt. Ltd. is directed to be allowed. As the issue is covered in favour of assessee by the decision of Hon ble Supreme court in the case of TRF Ltd., Supra, we find no infirmity in the order of CIT(A) and the same is hereby confirmed. Accordingly, this issue of revenue s app .....

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..... of dead plants but by going through the volume of expenditure he made disallowance. Hon ble Calcutta High Court in the case of Tasati Tea Ltd., supra has considered the issue and allowed the claim of replacement of plants in existing area against dead plants by observing as under: But, however, we are not inclined to interfere with the order allowing the expenditure of ₹ 4,68,615/- as a revenue expenditure, though on different grounds, inasmuch as if the plants are raised and maintained in a nursery for being utilized for the purpose of re-plantation without any expansion of the plantation area or replantation in an abandoned area, then it cannot be said to be a capital expenditure. Capital expenditure involves an investment increasing the capital for higher profit. The expansion means extension of plantation to an additional area. An area already abandoned, if replanted would be an expansion of the area under cultivation for the previous year concerned. The maintenance of an area already under cultivation cannot be treated to be an expansion of the plantation nor can it be treated to be an investment or expansion adding to the capital already invested. On the other hand .....

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