TMI Blog2010 (11) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... al work-in-progress that had been capitalized during the year in case it is ultimately held that the appellant is entitled to deduction for scientific research expenditure in the year of capitalization. 4. The Ld. CIT(A) erred in not directing the Additional Commissioner to allow deduction for the expenditure of ₹ 9,16,30,000/- being premium paid on leasehold land, as revenue expenditure 5. The Ld. CIT(A) erred in not directing the Additional Commissioner to allow deduction for the expenditure of ₹ 2,29,98,000/- being expenditure on right of way as revenue expenditure 6. Without prejudice to the above, the Ld. CIT(A) ought to have directed to allow proportionate deduction for expenditure incurred during the year and during the earlier years on leasehold land and right of way. 7. The Ld. CIT(A) ought to have specifically directed to allow deduction of ₹ 5,70,91,700/- u/s. 80IB in respect of AU-V Gujarat refinery. 8. The Ld. CIT(A) erred in not specifically directing the Additional Commissioner to allow deduction u/s. 80IB of ₹ 68,71,26,000/- in respect of profit of marketing division of GHP unit. 9. The Ld. CIT(A) erred in directing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liberty to move this Tribunal for recalling of this order and restoration of its appeal if the requisite approval of C.O.D. is obtained in future with respect of ground Nos. 1,7,8 9. 5. Ground Nos. 10 to 16 raised by the assessee read as follows: 10.The Ld. CIT(A) erred in confirming the action of the Asstt. Commissioner in disallowing the appellant s claim for deduction of the amount of ₹ 3,94,01,265/- u/s. 80HHC in respect of the following exports: (a) Export of ATF to foreign airlines (b) Export of petroleum products produced in the refinery like naptha, furnace oil, benzene, etc. 11. The Ld. CIT(A) ought to have held that the appellant was entitled to the entire amount of deduction u/s. 80HHC as claimed by the appellant, subject only to variation based on the amount of profits assessed under the head profits and gains of business or profession . 12. The Ld. CIT(A) erred in holding that a sale of ATF to foreign airlines is not of the nature of exports. The Ld. CIT(A) ought to have appreciated the fact that the ATF was in fact exported out of India and payment thereof had been received in convertible foreign exchange. Hence as per the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. MODVAT/CENVAT reversal on chemical (Input) 9,64,228/- 2. MODVAT/CENVAT reversal on stores and spares (capital goods) 31,90,680 3. Power and Fuel (LDO) issued to Coke Calcination Unit (CCU) at barauni refinery 81,37,219 4. Fixed water charges levied by Gujarat Government 7,32,42,513 5. Licence fee demand received from department of Telecom, Bhuj 9,14,41,637 6. Hire charges 30,99,438 7. Expenses pertaining to security force at Tikrikalan Bottle Plant 30,60,000 8. Error in posting purchase of AFFF type 3% foam concentrate (Chemical additive, item code -6516151014) 6,71,670 9. Survey expenses 2,22,60,225 10. Error in reconciliation and adjustment of Crude Oil Loan 32,24,31, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 set aside the file of the AO wherein it has been held as follows: The assessee s case is that this expenditure had crystallized during the year and was not in the nature of prior period expenses. It was submitted that the assessee s activities are divided into 5 divisions, viz., marketing, refinery, pipeline, research development and Assam Oil Division. It is further submitted that the assessee has 184 terminals and depots and six refineries all over India. It is pleaded that in view of such vast operations at the year end liabilities are provided on estimate basis and may result into, under provisioning or over provisioning in some cases. It is claimed that such difference in estimates have been classified as prior period expenses in the accounts. It is submitted that the actual liability in the cases have crystallized during the year and though the provision was made in the earlier year, such a provision was subject to variation and that these differences were claimed as expenditure during the year. It is further argued that Accounting Standard -2 notified u/s. 145 by the Central Board of Direct Taxes pertains to disclosure of prior period and extraordinary items and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the liability to pay crystallized or materialized only when the Asstt, Labour Commissioner passed the order. Before this the liability was uncertain, vague and inchoate. Thus it was directed that the amount in question should be allowed in the year in which it is materialized. The Calcutta High Court in the case of CIT Vs Padmavati Raje Cotton Mills 203 ITR 375 (Cal) was considering the allowability of market fee levied by way of an ordinance. In this case though the ordnance was issued on 15.5.1980, the demand for market fee was made by the Collector on 4.3.1983. It was held that market fee is deductible in the assessment year 1983-84 by observing that this part of the statutory liability, in this case, admittedly accrued in the year in question and has became real and enforceable in the year in question, though the same is referable to the earlier assessment years. So the test laid down by the Court is that the year of allowability is when the said liability has become real and enforceable. The Hon ble Gujarat High Court in the case of Saurashtra Cement Chemical Industries Vs CIT 213 ITR 523 (Guj) held as follows: Merely because an expenses relates to a transaction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing decisions: CIT Vs Brockhover B.V. (Bombay High Court judgement dt. 7.6.2000 in Appeal No. 315 of 2000 ONGC Vs DCIT 83 ITD 151 (Del)SB) 13. The Committee of Disputes held on 15th Nov. 2007, the permission has been granted. 14. Before us the Ld. Counsel for the assessee submitted as follows: The appellant relies on the following decisions : CIT Vs Woodward Governor India P. Ltd (SC) 312 ITR 254 CIT Vs Brockhover B.V. (Bombay High Court judgement dt. 7.6.2000 in Appeal No. 315 of 2000) Tribunal order in the case of Brockhover 15. We find that the matter is to be sent back to the AO with respect to exchange rate difference law claimed as revenue expenditure, to be decided in the light of CIT Vs Woodward Governor India P. Ltd (SC) 312 ITR 254 after giving an reasonable opportunity to the assessee. 16. Ground No. 26 27 raised by the assessee reads as follows: 26. The Ld. CIT(A) erred in confirming the action of the Additional Commissioner in levying interest under Sec. 234D. The appellant denies liability towards interest u/s. 234D. 27. The Ld. CIT(A) ought to have appreciated that interest under Sec. 234D can be charged only in cases where the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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