TMI Blog2023 (10) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee s own case [ 2022 (5) TMI 685 - ITAT DELHI] held that the Revenue was not justified in denying the claim of deduction on such income. Before us, Revenue has not pointed any contrary binding decision in its support. We therefore, hold that AO not justified in denying the claim of deduction u/s 80IC of the Act and thus direct the AO to grant deduction u/s 80IC on the interest income earned by the assessee. Foreign Travel Expenditure - expenses have been incurred in connection with travel to China by the staff of the company - HELD THAT:- The details have been mentioned at page no. 137 of the paper book which gives details of starting date, ending date, fair, boarding, lodging, conveyance, telephone and other expenses. In total 15 trips have been made by the employees of the company. Since, the expenses are incurred in connection with business of the assessee, we hold that no disallowance on this account is called for. R D Expenses - Allowability of expenses u/s 35(2) - R D expenses consist of establishment expenses incurred at R D units for which application for approval has not been filed during the year - HELD THAT:-The expenses as detailed consists of employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case and the legal position, the learned CIT (A) has erred in confirming an addition of Rs. 11,62,00,000/- allegedly on the ground that no commission has been charged by the appellant for providing corporate guarantee to the lenders on behalf of its associated enterprises. 2.03. That on the facts and in the circumstances of the case and the legal position, the learned CIT(A) has erred in arriving at the arm's length price of service provided by the appellant in the form of corporate guarantee to AES; whereas:- i) Providing corporate guarantee is in the nature of shareholders' activities and is not an 'international transaction' as investment in subsidiary Company is not an 'international transaction as held in the case of Vodafone India Services Private Limited and Shell India Markets Private Limited. ii) The appellant has not incurred any cost for issuing corporate guarantee and such transaction has no bearing on the profits, income, losses or assets of the appellant and it cannot be considered as an 'international transaction' in terms of section 92B of the Act. iii) The corporate guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t expenses of Rs. 1,68,25,752/- incurred at seven units on R D activities claimed u/s 35(1)(i) of the IT Act, 1961. 9. That on the facts and in the circumstances of the case and the legal position, the learned CIT (A) has erred in confirming the addition of Rs. 15,91,369/- on account of depreciation and additional depreciation on machinery purchased on 17.02.2011 and 18.02.2011 and installed on 04.03.2011. 3. Ground No. 1 is general in nature. Ground No. 2.01, 2.02 2.03 Corporate Guarantee: 4. This issue stands covered by the Co-ordinate Bench of ITAT in assessee s own case in ITA No. 6509/Del/2018 for A.Y. 2014-15 vide order dated 09.05.2022. The relevant part of the said order is reproduced as under: 8. Rebutting the argument of the ld. DR, the ld. AR alternatively argued that determination of the corporate guarantee at 1.3% is on a higher side and relied on the judgment of Hon ble High Court of Bombay in the case of CIT Vs. Everest Kento Cylinders Ltd. 58 Taxmann 254 and also on the judgment of Hon ble High Court of Bombay in the case of CIT Vs Thomas Cook (India) Ltd. in ITA No. 712 of 2017 order dated 26.08.2019. Keeping in view, the judgments o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Aggrieved by the order of AO, assessee carried the matter before the CIT(A), who following the order of his predecessor in assessee s own case for A.Y. 2008-09, upheld the action of the AO. Aggrieved by the order of CIT(A), assessee is now before us. 18. Before us, Learned AR reiterated the submissions made before the AO and CIT(A) and further submitted that against the order of CIT(A) for A.Y. 2008-09, assessee had carried the matter before the Tribunal. The Tribunal vide order dated 30.09.2019 in ITA No.4695/Del/2012 has decided the issue in favour of the assessee by holding that the provision made in respect of Shahenshah Scheme is on a scientific basis. He further submitted that the Coordinate Bench of Tribunal had deleted the similar additions made by AO in A.Y. 2007-08 2006-07. He pointed to the relevant findings in the synopsis filed by him. He therefore submitted that since the issue in the year under consideration is identical to that of earlier years, therefore following the order of tribunal in earlier years, the additions made by AO be deleted. 19. Learned DR on the other hand supported the order of AO in CIT(A). 20. We have heard the rival submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had credited Rs. 16,725/- and Rs. 6,334/- on account of interest income in the accounts of Baddi Unit and Haridwar Unit. The assessee was asked to show cause as to why the deduction u/s 80IC not be disallowed on such interest income as it was not derived from the business activity of the industrial undertaking. Assessee made the submissions which were not found acceptable to AO. AO was of the view that as per the provisions of Section 80IC, deduction is available only on income derived from business activity of industrial undertaking and since interest has been derived from fixed deposits, the interest was not eligible for deduction. He accordingly denied the claim of deduction u/s 80IC on such interest income. 23. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who upheld the order of AO. Aggrieved by the order of CIT(A), assessee is now before us. 24. Before us, Learned AR reiterated the submissions made before the lower authorities and further submitted that interest income was earned on the fixed deposits which was required to be maintained as per the statutory requirements of the respective state. He submitted that since the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g date, ending date, fair, boarding, lodging, conveyance, telephone and other expenses. In total 15 trips have been made by the employees of the company. Since, the expenses are incurred in connection with business of the assessee, we hold that no disallowance on this account is called for. Ground No. 8 R D Expenses: 9. The R D expenses consist of establishment expenses incurred at R D units for which application for approval has not been filed during the year. The expenses are detailed at page no. 138 139 of the paper book which consists of employee remuneration 42 employees who are engineers and managers placed at 7 different R D units. The payments made of Rs. 1,50,82,425/- consists of basic salary, HRA, Transport Allowance, Special Allowance, Mediclaim Allowance, LTA and exgratia . Further, an amounts of Rs. 17,43,376/- has been incurred on account of consumables and material costs incurred at R D units which consists of rotary, file, moulded box, Cjx209A Te Type, busbar for testing fixture, job work charges L.R, Pp edge protector, button B2, material for R D, Pcb design charges, vernier depth gauge and Allen key etc. The expenses are not covered u/s 35(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 on account of computerized format. The copies of invoices No. 79 and 80 in respect of machinery purchased from M/s Supermac Industries (India) Limited are enclosed. In the invoice No. 79, the date of purchase order has wrongly been mentioned as 02/04/2011 instead of 02.04.2010. A copy of purchase order is enclosed. The machine was received on dated 19.02.2011 in the factory premises. The copies of Inward material register dated 19.02.2011 alongwith the copy of Invoice and Transporters GR are also enclosed. The machine was installed and put to use on 4th March, 2011. In the installation report, the date of installation has been stated as 3/4/2011. The same is to be read as 4th March 2011 as per computerized format in the Alwar factory during the year. The same is also evident from the installation report at SI. No. 17 (copy enclosed) of letter filed on 16.02.2015 where the date of installation has been stated as 10/31/2010 which is to be read as 31/10/2010. The aforesaid machines have been installed on March 2011 and hence depreciation and additional depreciation was to be allowed on the same as per the provisions of section 32 and 32(1)(iia) of the IT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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