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2018 (12) TMI 456

Allowable revenue expenditure u/s 37(1) - assessee company paid compensation for vacating the land, within the leased area - Held that:- Assessee has incurred an expenditure of ₹ 60 lacs during the previous year relevant to impugned assessment year and a claim u/s 37(1) was made during the course of assessment proceedings. The fact of incurrence of the expenditure and the fact that the said expenditure has been incurred for the purposes of the business has not been disputed. - In the .....

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ed in favour of assessee - Addition towards contribution to PF and ESI - Held that:- The assessee company has deposited employee’s contribution to PF and ESI with delay of few days from the due dates, however the same were deposited before the due date of filing of the return of income U/s 139(1) which is evident from the order of the Assessing Officer. It was further submitted that the matter is squarely covered in favour of the assessee by the decisions in case of CIT vs. State Bank of Bik .....

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- and, restricting such claim to ₹ 52,98,858/-, for the reason that such amount was claimed as a deduction in the return of income filed by the assessee company for the relevant previous year. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by allowing deduction under section 37(1), of the entire amount of ₹ 60,00,000/-, as claimed by the assessee company before the ld. AO, in the assessment proceedings and b .....

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the addition of ₹ 13,70,733/- made for depositing the employees contribution to PF & ESI beyond the prescribed time limit provided in the respective Act. (iii) Whether in the facts and circumstances of the case and in law the Ld. CIT(A) was justified in holding that the employees contribution to PF & ESI are governed by the provisions of Section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961. 2. Regarding ground no. 1 of the assessee s appeal and the g .....

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following the same, he disallowed the depreciation claimed of ₹ 52,98,858/- made by the assessee. 3. On appeal, the ld. CIT(A) following the decision of the Coordinate Bench in assessee s own case for A.Y. 2013-14 (ITA No. 572/JP/2017 order dated 01.09.2017) allowed the claim of the assessee U/s 37(1) however the quantum of claim was restricted to ₹ 52,98,858/- and her relevant findings are as under:- However, it is seen that in the return filed for the relevant year a deduction of .....

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ted that the finding of the ld. CIT(A) that the claim of the assessee company U/s 37(1) of the Act cannot be greater than the amount originally claim in the return is not correct and ld. CIT(A) has misplaced her reliance on the decision in case of ACIT vs. Subh Laxmi Construction Co. (2003) 1 SOT 587 and ITO vs. New Mitherwal Construction Co. (2002) 120 Taxman 82 as the facts in those two cases are total different from the present case. In both these cases, entire mechanism of determining the as .....

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et Profit % was estimated by the ITAT which resulted into the assessed income being lower than the returned income which was subsequently rectified by ITAT. It is a trite law that the powers of the ITAT are different from the powers, as assigned under the statute, to the AO, and CIT(A). The ITAT has to pass orders thereon as it thinks fit. Thus, the ITAT, cannot go beyond the grounds of the appeal filed before it by aggrieved party and its powers are restricted to granting relief to the extent a .....

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them, during the proceedings, even to the extent that the assessed income may go lower than the returned income. Both AO and CIT(A) are entrusted with the responsibility of assessing income/passing orders in accordance with the law and not to take any benefit of any mistake committed by the assessee. In the aforementioned judgments, relied by ld. CIT(A), no claims were made by the assessees before the lower authorities. However, in the present case, the assessee consistently made the claim befo .....

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on ble Supreme Court in the case of National Thermal Power Company Limited [1998] 229 ITR 383 (SC). In this case, assessee had deposited its funds not immediately required by it on short term deposits with banks. The interest received on such deposit was offered by the assessee company itself for tax and the assessment was completed on that basis. This, inclusion of the interest income was not challenged by the CIT(A), however, before the ITAT the company contended that such interest income was .....

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been recast and are entirely different from the old provisions. A notice under sub- section (2), which will be issued only in cases picked up for scrutiny, is now issued only to ensure that the assessee has not understated his income or has not computed excessive loss or has not underpaid the tax in any manner while furnishing his return of income. This means that under the new provisions, in an assessment order passed under section 143(3) in a scrutiny case, neither the income can be assessed a .....

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e Income Tax Rules, then in such case at the time of assessment AO will apply the correct rate as prescribed in the rules. This will result in a situation where assessed income would be lower than returned income. Therefore, even if returned income is higher, assessing officer in regular assessment can determine the assessed income at an amount lower than returned income by allowing all the deductions to which the assessee is lawfully entitled. 6. The ld. DR is heard who has relied on the order .....

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venue account, provided the expenditure does not acquire any capital asset. Payments made for removal of restriction, obstruction or disability may result in acquiring benefits to the business, but that by itself would not acquire any capital asset. 25. In the instant case, during the relevant previous year, the assessee company paid an amount of ₹ 35,00,000, to Mr. Ranga, S/o Mr. Panchiya Meena. It is the contention of the AR that the amount has been paid as compensation to the land owner .....

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support of his contentions, the ld AR has submitted various documents such as undertaking for surrender of land by land owner, surrender Letter or Samarpan Patra executed by the Land owner, chain of events documented by Tehsildaar, letter written by Land Owner to Tehsildaar surrendering the land, report of Tehsildaar for verification of facts and evidence that the land surrendered by Mr. Ranga was mutated in the name of the Government of Rajasthan in the revenue records. It has been contended t .....

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act that assessee wishes to carry on the mining area in that area, the assessee was required to pay compensation to the land owner so that the latter doesn t obstruct or challenge the carrying of the mining activity underneath the surface of land which belongs to him. The payment is for the purposes of removing the disability or obstruction and to facilitate the carrying on its business. No fresh rights have been acquired by the assessee by virtue of paying the said compensation. The assessee wa .....

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e has been incurred for the purposes of the business has not been disputed. In the return of income, the assessee has claimed depreciation of ₹ 52.98 lacs however, the said depreciation relates to expenditure incurred in earlier years and which has been capitalized as well as expenditure incurred during the year under consideration on which depreciation has been claimed. In the earlier year i.e, AY 2013-14, the whole of the expenditure has been allowed as revenue expenditure and therefore, .....

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ew days from the due dates, however the same were deposited before the due date of filing of the return of income U/s 139(1) of the Act which is evident from the order of the Assessing Officer. It was further submitted that the matter is squarely covered in favour of the assessee by the decisions of the Hon ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur 43 taxman.com 411 and CIT vs. Jaipur Vidyut Vitran Nigam Ltd. 49 taxman.com 540. 10. We find that the ld CIT(A) .....

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