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TMI Blog2014 (1) TMI 1843X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as 'the Act' in short). Another common issue is regarding deletion of addition made by the Assessing Officer by disallowing 80% depreciation on complete structure of Wind Turbine Generator (WTG) machine. For the sake of convenience, we will narrate facts obtaining in the A.Y. 2007-08. 3. The assessee is engaged in the business of manufacturing and exports of readymade garments. For A.Y. 2007-08, the assessee-firm filed its return of income on 19/10/2007, declaring total income of Rs. 5,85,49,410/-. As per Annexure-B to the Form 3CD, it was noticed that the employees contribution to PF/ESI has been deposited late. The assessee was asked to explain as to why this delayed payment should not be disallowed. In response to the same, the assessee submitted as under:- "Assessee submitted that it has given details of PF and ESI contribution of employees deducted and paid. The due date of deposit of PF & ESI is 15 days from date of payment of wages etc. which in assessee's case is 7th day of the month following immediate previous month i.e. wages of March are paid by 7th April and so on. As such the due date of payment of PF & ESI was due on 21st of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution before the due date of filing of return, it cannot be disallowed under section 36(1)(va) of the Act. We have gone through the decision of the Tribunal inter-alia, therefore, by respectfully following the same specifically the Tribunal's order in assessee's own case, for A.Y. 2005-06 dated 13/01/2011, we confirm the impugned deletion and cannot allow ground No. (i) of the Revenue's appeal. 6. The other common ground raised, as ground No.(ii) is regarding allowance of 80% depreciation on the complete structure of Wind Turbine Generator Machine (WTGM) by the Ld. CIT(A) as against not allowed by the Assessing Officer. 7. Facts of this ground are that the assessee has claimed depreciation on the entire WTGM of Rs. 1,77,20,157/- @ 80% i.e. half rate which comes to Rs. 78,70,222/- by treating the civil construction and other parts as the essential parts of WTGM. The Assessing Officer, however, disallowed depreciation to the tune of Rs. 19,32,923/- which pertained to civil construction and other allied parts which are not found by him as eligible for depreciation @ 80%. However, ld. CIT(A) has held that the expenditure incurred on installation and commission on WTGM can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bine Generator Machine. (ii) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in holding that depreciation @ 80% has to be allowed on Wind Turbine Generator Machine without segregation investment on building part and on electric item without appreciation that depreciation @ 80% is allowable on Wind Turbine Generator Machine and not on electrical fittings and building etc. 3. The appellant craves its right to additional, amend or alter any of the grounds on or before the hearing." 12. In the CO, no material ground has been raised and it simply supported with the finding of Ld. CIT(A). After hearing both sides, we are of the opinion that the grounds raised by the Revenue in this year also are same and similar. Therefore, with the similar reasoning, we dismiss grounds Nos. 1 & 2 of Revenue's appeal. The CO being simply supported has to be dismissed either. 13. Accordingly, the appeal of the Revenue and CO of the assessee stand dismissed. 14. I.T.A.No. 136/Jaipur/2013 and CO No. 16/Jaipur/2013 are directed against the order of Ld. CIT(A) dated 27/11/2012. In Revenue's appeal, the following grounds have been raised:- "(i) Deleting addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. This deletion has been supported by the assessee vide ground No. 1(ii) of its cross objection. Similarly, the assessee has raised one more ground as ground No.2 in its CO, which pertains to disallowance of expenses under section 14A of the Act. 17. The facts apropos ground No. (ii) of Revenue's appeal are that from the bank interest charged and debited in the P & L account amounting to Rs. 1,56,99,642/- which included amount debited by way of forward cancellation charges amounting to Rs. 1,27,50,914/- and Rs. 2,11,588/- which were debited and credited respectively were noticed by the Assessing Officer. The Assessing Officer sought explanation from the assessee-firm, who was exporting fashionable readymade garments. The assessee explained that in order to protect against volatility of Dollar price which could be downward anytime, the assessee entered into a forward contract with the Bank of Baroda, IBB Branch, Jaipur, and has assessee incurred a loss of Rs. 1,25,39,326/- (Rs. 1,27,50,914/- - Rs. 2,11,588/-), but the Assessing Officer has disallowed this net amount of Rs. 1,25,39,326/- on the reasoning that it is a speculation loss, which is not covered under the proviso a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court rendered in the case of CIT VS. Badridas Gauridu (P) Ltd. 261 ITR 256 (Bom) and that of Hon'ble Calcutta High Court rendered in the case of CIT Vs. Soorajmull Nagarmull 129 ITR 169 (Cal) are relevant. In all these cases, it has been held that where the foreign exchange contracts were only incidental to the assessee's regular course of business, these cannot be treated as disallowance in Foreign Exchange resulting in speculation loss. Accordingly, we are also satisfied with the findings of Ld. CIT(A) and do not find merit in the Revenue's appeal and as such ground No. (ii) stands dismissed. 19. With our above finding, supportive ground taken by the assessee in its CO as become only of academic in interest. 20. The assessee has raised one more material ground taken as ground No.2 which is against confirmed addition of Rs. 82,583/- under section 14A of the Act. 21. Facts of this ground are that the Assessing Officer disallowed proportionate expenditure of Rs. 82,583/- under Rule 8D incurred to earn tax free dividend income of Rs. 1,06,762/-. The case of the assessee is that it had invested a sum of Rs. 4,11,48,707/- in various mutual funds and after re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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