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TMI Blog2015 (11) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... ing deduction under section 80HHC of the Act. For this purpose, the Assessing Officer relied upon the order of the I.T.A.T., Chandigarh Bench in the case of Parker Cycles Inds. and M/s Allied Engineers in ITA No.637 and 638/Chd/2005 dated 12.5.2006. Relying on certain other cases, the Assessing Officer proceeded to work out the deduction under section 80HHC of the Act excluding the scrap sales from the total turnover. 4. The learned CIT (Appeals) allowed the appeal of the assessee on this issue and directed the Assessing Officer to include the figure of scrap sales in the total turn over. The learned CIT (Appeals) referred to the detailed observations made by the I.T.A.T., Chandigarh Bench in assessee's own case in an earlier year in ITA No.23/Chd/2007, whereby the appeal of the assessee was decided in its favour. The learned CIT (Appeals) observed that the order of the Hon'ble I.T.A.T., Chandigarh Bench shows that the relief granted to the assessee was on merits and it has been clearly mentioned in the order that the contrary decision in the case of Parker Cycle Inds. (supra) which was also relied upon by the Assessing Officer was based upon concession and, therefore, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an amount of Rs. 60,34,158/- on account of litigation expenses, whereas the actual amount incurred during the year was Rs. 51,88,061/-. On confronting by the Assessing Officer, the assessee submitted that 20% of the litigation expenses are claimed as expenses by the assessee in one particular year on the basis of method of accounting regularly employed. Rejecting the contention of the assessee the Assessing Officer proceeded to disallow the expenses other than what were actually incurred during the year. 11. Before the learned CIT (Appeals), it was submitted by the assessee that the expenditure being revenue in nature was spread over treating the same as deferred revenue expenditure to be claimed in five years time as a normal accounting policy which is being followed consistently and has been accepted as such by the Department. It was further stated that the deferred revenue expenditure is essentially an accounting concept as per which the expenses are essentially revenue in nature but for various reasons and also for the reason that there is presumption that the expenditure will result in benefits over a number of periods, the same is spread out and written off over a period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record. It was further submitted that the Department has not preferred any appeal against the said order of the learned CIT (Appeals). Even in assessment year 2010-11, the Assessing Officer has allowed deferred revenue expenditure, copy of which is placed in the Paper Book at pages 65 to 67. In furtherance of his arguments, the learned counsel for the assessee stated that if the Assessing Officer prefers to allow only the expenditure incurred during the year, since in earlier years 20% of expenditure claimed every year on accumulated basis have been allowed, a total reworking of the said expenses, is required to be done. 14. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. It is a matter of record that for the last so many years the assessee has been following the practice of claiming litigation expenses @ 20% in a duration of five years. From the perusal of various orders of lower authorities for various assessment years, this is also observed that the Department has been accepting the claim as such. Since there is no change in the facts during the year even the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we see nowhere this fact is emerging from this order that the addition has been made on agreed basis. However, looking to the fact that certainly there was certain discrepancy in the bonus and leave with wages register, the Assessing Officer proceeded to make disallowance, which was a very small portion of the total expenses claimed by the assessee and also to the fact that the learned CIT (Appeals) deleted the disallowance in a very summary manner, we uphold the action of the Assessing Officer in making the disallowance. The ground of appeal raised by the Revenue is allowed. 20. The ground No.3 raised by the Revenue reads as under : "3. That the Ld. CIT(A) has erred both in law and on facts in reducing the addition of Rs. 50,000/- to Rs. 10,000/- made by the AO on account disallowance of foreign traveling expenses being personal expenses while on tour, as the assessee had not produced all the bills of traveling as well as hotel lodging and boarding or local traveling taxi bills etc., during the course of assessment proceedings." 21. Briefly, the facts are that the assessee has debited an amount of Rs. 8,00,493/- under the head 'foreign travel' and as the assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth in law and on facts in deleting the addition of Rs. 50,000/- made on account of payment of bonus and leave with wages, which were not fully verifiable from the records produced by the assessee during the assessment proceedings. 30. The issue in this ground is similar to the issue in ground No.2 raised by the Revenue in ITA No.1138/Chd/2012 and the findings given in ITA No.1138/Chd/2012 shall apply to this case mutatis mutandis. 31. The ground No.3 raised by the Revenue reads as under : "3. That Ld. CIT(A) has erred both in law and on facts in deleting the addition of Rs. 50,000/- made by the AO on account of disallowance of general expenses as some vouchers pertaining to these expenses were appeared to be self made." 32. Briefly, the facts of the case are that a disallowance was made by the Assessing Officer out of general expenses pointing out that the some vouchers were self made and did not have bills. The learned CIT (Appeals) deleted the disallowance observing that the Assessing Officer has made the disallowance without any logical basis as no specific unvouched expense has been brought on record. The disallowance has been made by the Assessing Officer on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the issue in this ground is similar to the issue in ground No.1 raised by the Revenue in ITA No.1138/Chd/2012 and the findings given in ITA No.1138/Chd/2012 shall apply to this case also with equal force. 40. The ground No.2 raised by the Revenue reads as under : "2. That Ld. CIT(A) has erred both in law and on facts in deleting the addition of Rs. 50,000/- made on account of payment of bonus and leave with wages, which were not fully verifiable from the records produced by the assessee during the assessment proceedings. 41. The issue in this ground is similar to the issue in ground No.2 raised by the Revenue in ITA No.1138/Chd/2012 and the findings given in ITA No.1138/Chd/2012 shall apply to this case mutatis mutandis. 42. The ground No.3 raised by the Revenue reads as under : "3. That Ld. CIT(A) has erred both in law and on facts in deleting the addition of Rs. 50,000/- made by the AO on account of disallowance of general expenses as some vouchers pertaining to these expenses were appeared to be self made." 43. It is relevant to observe here that the issue in this ground is similar to the issue in ground No.3 raised by the Revenue in ITA No.1004/Chd/2012 and the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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