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M/s Siemens Ltd., [as successor to Siemens VAI Metal Technologies Pvt Ltd. (formerly known as VAI Engineering and Automation (P) Ltd.) ] Versus Income Tax Officer, Ward-2 (4) , Kolkata

2017 (11) TMI 853 - ITAT KOLKATA

Allowance of claim under the provision of 35DD - deduction being 1/5th of the restructuring expenses - Held that:- As the matter was now sub juice before the Tribunal, therefore, the assessee did not make any claim being 1/5th of restructuring expenses in the subsequent year. However, assessee is very much entitled for 1/5th of the expenditure in the five assessment years . Thus Assessee is very much entitle for restructuring expense u/s. 35DD of the Act. Accordingly, we direct the AO to allow t .....

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Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 28.12.2006 for assessment year 2004-05. Shri Saurabh Kedia, Ld. Authorized Representative appeared on behalf of assessee and Shri Arindam Bhattacherjee, Ld. Departmental Representative appeared on behalf of Revenue. 2. The grounds of appeal and additional grounds of appeal raised by the assessee are as follows:- 1.That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) erred in law in confirming .....

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s in connection with the approval process, in spite of which no formal approval had been granted to the appellant and has thus penalized the appellant without any violations being committed. 3. That the appellant craves leave to add to and/or amend, alter, modify or rescind the grounds hereinabove before or at the hearing of the appeal. Additional ground: The appellant company begs to take the following additional grounds of appeal in the subject appeal, which do not involve any fresh investigat .....

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sment year under consideration. (b) That on the facts and in the circumstances of the case, the Ld. CIT may please consider and allow the claim of the appellant on account of claim of 1/5th of the restricting expenditure incurred in AY 2002-03, following the principles laid down by Hon'ble ITTA in the case of VAI Engg & Automation (P.) Ld-vs-ITO[2008] 21 SOT 1 (Kol) 2. (a) That on the facts and in the circumstances of the case, the appellant is entitled to deduction of ₹ 12,61,664/ .....

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Ltd-vs-ITO[2008] 21 SOT 1 (Kol). 3. That the appellant craves leave to add to and to alter, amend, rescind or modify the grounds raised hereinabove before or at the time of hearing of the appeal. 3. The assessee has raised the additional grounds of appeal before us and we for the sake of convenience are treating the same in continuation of earlier grounds while considering the same on merits. The ld. DR raised no objection on the admission of additional grounds of appeal. Therefore the additiona .....

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usiness of consultancy, engineers and related services. The old name of assessee was VAI Engineering & Automation (P) Ltd. which was re-named as VAI Engineering and Automation (P) Ltd. vide order dated 14.08.2003 by ROC. 6. The assessee (VAI (P) Ltd) was maintaining a gratuity fund for its employees which was approved by Ld. CIT vide order dated 27.01.2003 with effect from 01.01.1997. The assessee in the year under consideration contributed a sum of ₹4,00,438/- towards the gratuity fun .....

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t contributed to gratuity fund was offered to tax in the computation of income inadvertently. But during the course of assessment proceedings, the claim of expenditure was made before the AO. But the claim of it was rejected by the AO without adducing any reasons thereon. The expenditure was claimed during the assessment proceedings on the ground that it already had the approval for its gratuity fund from the Income Tax Authority. Indeed, the name of the assessee was changed and this was duly in .....

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d the assessment order and considered the submission of the appellant. The appellant company claimed the contribution of gratuity as deduction before the AO which was erroneously offered for taxation while computing the taxable income. The appellant company made an additional claim at the time of assessment proceedings on the ground that VAI India Pvt. Ltd. which was subsequently renamed as VAI Engineering & Automation (P) Ltd i.e. had the approval from the Income Tax Authorities for such fu .....

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further submitted that the same issue arose in the assessment year 2009-10 in the own case of the assessee where the Tribunal was pleased to allow the claim of assessee in ITA No.1944/Kol/2013 for A.Y 2009-10 vide order dated 28.02.2017. On the other hand, Ld DR before us submitted that Hon'ble Tribunal in assessee s own case in ITA No.1944/Kol/2013 (supra) was pleased to restore the matter back to the file of AO for verification of the facts whether necessary changes has been approved by th .....

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s claimed by assessee during the assessment proceedings for the amount contributed towards the gratuity fund but Authorities Below denied to entertain the claim of assessee for the reason as discussed above. However, we find that in the assessee s own case in ITA No.1944/Kol/2013 (supra) matter was restored back to the file of AO for fresh verification of the case. For the sake of clarity, the relevant operative portion of this order is reproduced below:- 2. We have heard Shri R.S. Biswas, Id. C .....

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,33,5771- on account of gratuity fund. The fund of the appellant company is in the name of VAI India Pvt. Ltd. and not in its present name i.e. Siemens VAI Metals Technologies Pvt. Ltd. Accordingly, the A.O. has held that the appellant did not have any gratuity fund of its own and disallowed the contribution of ₹ 46,33,5771-. The Ld. AIR has further explained that as per the order of the Hon'ble Calcutta High Court, the appellant company was merged with VAI India Pvt. Ltd. with effect .....

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ens VAI Metals Technologies Pvt. Ltd. Employees Gratuity Fund. Ref: Your letter dated 23.01.2013. Sir, With reference to the captioned letter this to inform you that the matter is being considered and the approval of deed of variations are under process. The l.d. A/R has also explained that the necessary approvals for the Siemens VAI Metals Technologies Pvt, Ltd Employees Superannuation Fund and Siemens VAI Metals Technologies Pvt Ltd. Employees Gratuity Fund would be received shortly. In view o .....

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d of Variation of aforesaid Superannuation Fund and the Gratuity Fund, the additions of ₹ 23,42,193/- and ₹ 46,33,577/- on account of contributions to the Superannuation Fund and the Gratuity Fund respectively are to be treated as confirmed. For statistical purpose, these grounds of appeal are allowed . 3. We do not find any infirmity in this order of the first appellate authority. The Id. CIT(Appeals) has directed the Assessing Officer to verify the facts and pass necessary conseque .....

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/- and ₹12,61,664/- being 1/5th of the restructuring expenses of ₹37,88,563/- and ₹63,08,319/- respectively. The assessee in its additional ground sought the deduction of restructuring expenses for ₹7,57,713/- and ₹ 12,51,664/- being 1/5th of total restricting expense in view of the order of Hon'ble Tribunal in assessee s own case in ITA No. 874/Kol/2007 for A.Y 2002-03 dated 28.09.2007. At the threshold it is important to understand the history of the case whic .....

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imed by assessee in respective years. 13. The assessee against the order for the AY 2002-03 preferred an appeal before Ld. CIT(A) who upheld the order of AO and subsequently order of Authorities Below was affirmed by Hon'ble Tribunal in ITA No.874/Kol/2007 (supra) the relevant extract of the order is reproduced below:- … .. In the light of these facts of this case, we are of the considered opinion that the expenditure of ₹ 37,88,563/- was incurred for purposes of amalgamation/me .....

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