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2018 (10) TMI 193

Deduction u/s.37 - contribution made by the assessee for non-business purposes viz. Contribution to Ranbaxy Community Health Care Society and contribution to Ranbaxy science foundation - Held that:- The pension would be paid to the employees upon their resignation or retirement or to the member of the family in event of premature death of the employee the liability was ascertained through scientific method. The claim of deduction on the basis of provision made for future liability which is ascertainable and ascertained through scientific statistical data is well recognized through series of judgments. We do not see the Tribunal has therefore committed any error. Our attention was however drawn to the judgment in case of Dishergarh Power Sup .....

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itted that by very nature of things, the bonds were convertible. The expenditure should therefore be seen as increasing the share capital of the company and therefore capital in nature. Since the facts on record suggest that the conversion of bonds into shares never took place and the entire borrowed amount was repaid with redemption premium, keeping a contention of the counsel for the Revenue open this question is not considered. - R/TAX APPEAL NO. 1159 of 2018 - Dated:- 1-10-2018 - MR AKIL KURESHI AND MR B.N. KARIA, JJ. For The Petitioner (s) : Mr.Varun K.Patel (3802) ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Tax appeal is admitted for consideration of following substantial questions of law :- (A) Whether in the facts and c .....

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that expenditure incurred towards issue of share capital is allowable as revenue expenditure ? 4. Question No.(3), noted above, is an element of question we have already admitted. This is therefore not separately considered. 5. Question No.(1) pertains to the assessee's claim of deduction of provision made for the purpose of pension payable to the employees which provision was made on the basis of actuarial. The Assessing Officer objected to such deduction and disallowed the same in the order of assessment. The issue was carried in the appeal by the assessee. CIT (Appeals) deleted the same. Matter went to the Tribunal at the hands of the Revenue. The Tribunal ruled in favour of the assessee. It was noticed that the pension was payable t .....

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ibunal ruled in favour of the assessee. Tribunal, in impugned order, noted that the expenditure was incurred for vehicles, computers and other assets provided to the employees of the company who are working at the approved research facility and were directly engaged in the research and development activities. Thus, the expenditure was held to be related to the inhouse research activity. This question is therefore not considered. 7. Question No.(4) pertains to the revenue expenditure claimed by the assessee towards convertible bonds. The Assessing Officer was of the opinion that since the bonds were convertible, the expenditure should be treated as capital in nature. CIT (Appeals) allowed the deduction. The Tribunal confirmed the same while .....

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