TMI Blog2019 (12) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of CIT(A) in holding that the late delivery charges paid by the assessee were in the nature of expenditure carried out during the course of carrying on the business. The said late delivery charges were levied by the OEM customers, who were given specific orders to the assessee for delivery within time frame, but because of the delay in the project, clause for L.D. charges was applied and the amount was recovered from the assessee. In the totality of the above said facts and circumstances, we are of the view that the said expenditure is duly allowable in the hands of assessee. Accordingly, we hold so Disallowance of depreciation on windmill at 80% as it was commissioned on 09.08.2007 - AO noticed that high rate of depreciation was also claimed on civil work and installation of electrical lines - HELD THAT:- As decided in own case apellant was entitled to higher depreciation on the electrical line for transmission of the power generated. The Assessing Officer is directed to call for the breakup of each of these items of expenditure and allow accelerated depreciation on the items mentioned - ITA No.1776/PUN/2017 - - - Dated:- 20-12-2019 - Shri Anil Chaturved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of assessment proceedings, AO on perusing the Profit and Loss account noticed that assessee had claimed ₹ 2,01,41,391/- on account of discount. The assessee was asked to prove the genuineness of expenditure to which the assessee gave the details. On perusing the details, AO noticed that assessee had given discounts at various rates but however the rate of discount was not reflected in its policy manual and the discount ranged between 5 to 10% to few selected customers. AO was of the view that normally higher discount is offered for non standard products where the prices are quoted on higher price and the margin was also good. The submission of the assessee of offering discount on the product range was not found acceptable to the AO. AO was of the view that there was neither any compelling necessity to incur the expenditure on account of discount nor had the other parties claimed the discount. He was of the view that assessee has inflated the expenditure by offering accelerated discount. He accordingly disallowed the claim of the discount to the extent of ₹ 2,01,41,391/- and added it to the income. Aggrieved by the order of AO, assessee carried the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings. The role of the distributors was not only to sell the goods but to collect the payments and also to provide pre and after sales services, carried out sales promotion activities and gave feedback about the business prospects of the items, competition and sales activities to the assessee. The assessee was dealing in certain standard products and it was offering discounts ranging from 5% to 15% of the sales price to its distributors and the dealers. There were certain non standard products which had higher price and even had higher profit margins, on which the assessee was giving higher percentage of discount to the extent of 25%. The said policy was followed by the assessee across the country in respect of all its distributors and dealers. The assessee had furnished complete details in respect of sale price, profit cost and other costs, discount allowed and the profit made before taxes, which are reproduced by the Assessing Officer at pages 11 to 14 of the assessment order. The Assessing Officer had also reproduced distribution policy manual at pages 15 to 22 of the assessment order, which provides complete and exhaustive list of the responsibilities of the distributors which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de its addition. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who decided the issue in favour of the assessee by observing as under : 8.3 DECISION: I have perused the assessment order and the submission of the appellant carefully. I do not find any reason to disagree with the contention of the appellant and also the findings and decision given by my colleague in A.Yrs. 2010-11 2011-12. Following the said decision, I delete the addition of ₹ 3,02,411/- on account of late delivery charges disallowed by the AO. Ground No.4 raised by the appellant is allowed. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us. 7. Before us, Ld. D.R. supported the order of AO. Ld.A.R. on the other hand reiterated the submissions made before AO and Ld.CIT(A) and further submitted that identical issue arose in assessee s own case for A.Y. 2010-11 2011-12 in Revenue s appeal and the Co-ordinate Bench of the Tribunal vide order dated 24.10.2017 has dismissed the Revenue s appeal. He thus supported the order of Ld.CIT(A). 8. We have heard the rival submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the submission made by the appellant as above carefully. The appellant in the written submission submitted that on the similar issue for AY 2009- 10, AY 2010-11 and AY 2011-12, in case of depreciation on Electrical line for transmission of power generate, the Hon'ble CIT (A)-4, Pune vide order dated 03/03/2015 had decided the issue in favour of the appellant in its own case, thereby observing as below:- I have perused the submission made and examined the details relating to the civil foundation and electrical items that are claimed to be wind mill components. Cost of reinforced cement foundation and labour charges, incurred for erection and commissioning of windmill have been held by the jurisdictional High Court ITAT to be an integral part of the windmills and it has been held that there is no functional differentiation between the two. Therefore the cost incurred on the above items is entitled for the same rate of depreciation as that for the wind mills. The Hon'ble Bombay High Court in Cooper Foundary Pvt. Ltd., (ITA No. 1326 of 2010) and the Pune ITAT in the cases of Western Precicast Pvt. Ltd. in ITA no. 1495/PN/2011 and J. Sons Foundary Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictional ITAT cited supra, it is held that the appellant was entitled to higher depreciation on the electrical line for transmission of the power generated. The Assessing Officer is directed to call for the breakup of each of these items of expenditure and allow accelerated depreciation on the items mentioned supra. Ground no.2 for A. Ys. 2009-10 2010-11 Ground no.1 for A. Y. 2011-12 are held to be partly allowed, subject to the above remarks. 5.3.1 Following the finding and decision taken by my brother calling in AYrs 2009-10 to 2011-12, I hold the similar view and direct the AO to allow depreciation as indicated in the said order for this year also, thereby allowing the ground raised by the appellant partly. Ground NO.1 raised by the appellant partly. Ground No.1 raised by the appellant is accordingly partly allowed. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us. 10. Before us, Ld. D.R. supported the order of AO. Ld.A.R. on the other hand reiterated the submissions made before AO and Ld.CIT(A) and supported the order of Ld.CIT(A). 11. We have heard the rival submissions and perus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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