9911796707
TMI Blog2023 (4) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of the case and in law, the Ld. CIT(A), Mumbai has (a) Erred in allowing the expenditure on dies & Moulds of Rs.7,16,16,415/- as a revenue expenditure even though the expenditure on purchase the assets results in enduring benefit of the assessee and therefore constitutes expenditure of capital nature. (b) Erred in deleting the addition of Rs. 27,95,851/- representing penalty charges received from machinery suppliers despite the fact that these receipts fall within the definition of income u/s 2(24) of the Income Tax Act." (c) Erred in direction the A.O. to allow deduction of Rs. 2,36,37,738/- towards expenditure even though expenditure on purchase these assets results in enduring benefit of the assess and therefore constitution an expenditure of capital nature. (d) Erred in direction the A.O. to grand deductionu/s 80HH &801A on the profits derived from respective units without deducting depreciation of respective units which is contrary to the provisions of above section. (e) Erred in direction the A.O. to grand deduction u/s 80HH & 80IAby including duty draw back. and interest which is contrary to the decision of Supreme Court in ster ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department. 5. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 6. Considered the rival submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee in the A.Y. 1995-96. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 3493/Mum/1999 dated 20.01.2021 held as under: - "55. Considered the rival submission and material placed on record. We notice from the records that the identical issue has already been decided by the Coordinate Bench of ITAT in assessee's own case for Assessment Year: 1990-91 to 1994-95 (ITA No. 6324 & 6325/Mum/2010 and 6963 & 6964/Mum/2014) on merits. For the sake of clarity, relevant portion of the said decision is reproduced below:- 5.1. We find that for the Assessment Year 1991, 1993- 94 & 1994-95, the only ground raised by the revenue is with regard to the direction of the Ld. CIT(A) in allowing the revenue expenditure in respect of replacement of jigs and fixtures and dies and moulds. The decision restored by us in ground no. 1 for Assessment Year 1990-91 would hold good for the same. Accordingly, the grounds raised by the revenue ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9) is reproduced below:- 3. The first issue in this appeal filed by the revenue is against the deletion of an addition 22,80,791/- representing penalty charges received from machinery suppliers. Both the parties agreed that the issue is covered by the decision of this Tribunal in assessee's own case for the assessment year 1989-90 to 1992-93 wherein the receipt in question has been held as a capital receipt. The Tribunal in the above referred orders (ITA 2468/Mum/98 & ITA No. 2643/Mum/99 for the assessment year 1992-93 - 'J' Bench order dated 16 th November, 2006, paragraph 15) has dealt with the issue in the following manner in rejecting the ground raised by the Revenue:- "15. Ground no. 8 relates to the addition of Rs. 24,14,323/- being the penalty charges received from the suppliers of machineries on account of some default. The learned CIT(A) has deleted the addition following his order for Assessment Years 1989-90 to 1991-92 as well as the decision of Hon'ble Andhra Pradesh High Court in the case of Barium and Chemicals Ltd 168 ITR164. After hearing both the parties, we find that this issue is covered in favour of the assessee by the decisions of the Tribunal in assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions of the Ld.AR. 15. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1995-96. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 3493/Mum/1999 dated 20.01.2021 held as under: - "57. With regard to this ground, Ld. AR brought to our notice para 8-8.5 of assessment order and para 33 of CIT(A)'s order and submitted that the similar issue has already been decided by the Coordinate Bench of ITAT in assessee's own case for Assessment Year : 1990-91 to 1994-95 (ITA No. 6324 & 6325/Mum/2010 and 6963 & 6964/Mum/2014) on merits in favour of the assessee. 58. On the other hand, Ld. DR relied on the orders passed by revenue authorities, however he conceded that this ground is covered by the decision of ITAT. 59. Considered the rival submission and material placed on record. We notice from the records that the identical issue has already been decided by the Coordinate Bench of ITAT in assessee's own case for Assessment Year : 1990-91 to 1994-95 (ITA No. 6324 & 6325/Mum/2010 and 6963 & 6964/Mum/2014) on merits. For the sake of clarity, relevant porti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtures were replaced for the reasons stated supra, the assessee has been claiming the same as revenue expenditure for the purpose of Income Tax Act. We find that this argument was duly 'appreciated by the Id. CIT(A) and the Id. CIT(A) duly granted relief to the assessee in this regard by following the decision of his predecessor in assessee's own case for the A.Yrs 2002-03, 2005-06 and 2006-07. 60. Therefore, respectfully following the above decisions of Coordinate bench of ITAT in assessee's own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Accordingly, this ground raised by the revenue is dismissed." 16. Further, in assessee's own case for the A.Y. 1996-97 the Coordinate Bench in ITA.No. 2230/Mum/2000 dated 20.06.2022, held as under: - "16. The assessee has purchased Jigs and Fixtures to the tune of Rs.1,83,34,475/- to be used in production process. The assessee revenue. claimed the said expenditure as against the claim of assessee the Assessing Officer treated the expenditure as capital in nature and allowed depreciation on the same. In the first appellate proceedings, the CIT(A) reversed the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections 80HH and 80IA(9) involved in this case. Further, it is also submitted that the above cited case has drawn its reference from the case of Vijay Industries dated 01.03.2019 wherein the issue before the Apex Court relates to the interpretation of section 80HH relevant to AY 1979-80 and 1980-81. In the order of Vijay Industries, the Apex Court held as under "provisions of section 80AB, which is a deeming fiction to provide that for the purposes of deduction under Chapter VIA (heading C deduction in respect of certain income), only income as computed under the provisions of the Act shall be deemed to income eligible for deduction, are not clarificatory in nature and the provisions of section 80AB prospectively. are applicable Hence the same would not apply to AY 1979-80 and 1980-81. 5. As per the provision of section 80AB, for purpose of computing the deduction under this chapter, the amount of income in accordance with the provision of this Act and deduction under this chapter will be as per section 28 to 43D and depreciation will be levied as per section 32 of the Act. Further, section 80AB has been inserted in the Income Tax Act by the Finance Act No 2 and effective f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer to compute deduction u/s 80HH and 80IA without deducting depreciation from the profits of the eligible undertaking. The Revenue is in appeal against the said findings of the CIT(A). The Co-ordinate Bench in the appeal by Revenue for assessment year 1995-96 had accepted identical ground raised by the Revenue following the decision rendered in ITA No.3491/M/1999 for assessment year 1993-94 by the Tribunal in assessee's own case No contrary material has been placed before us by the Ld.Counsel for the assessee. We find no reason to take a different view. Consequently, the fining of the CIT(A) on this issue are reversed and Ground No.4 raised in the appeal by Revenue is allowed." 22. The decision relied on by the Ld. AR of the assessee in the case of Reliance Industries Limitedv. ACIT (supra) is distinguishable to the facts and related to the section 10AA, accordingly, not applicable to the instant case. Therefore, respectfully following the decision in assessee's own case for the A.Y. 1996-97 and also following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed. Accordingly, ground raised by the revenue is all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the immediate source of the subsidies is the Government would make no difference. The "profits and gains" spoken of by sections 80-IB and 80-IC have reference to net profit. And net profit can only be calculated by deducting from the sale price of an article all elements of cost which go into manufacturing or selling it. Thus understood, it is clear that profits and gains are derived from the business of the assessee, namely, profits arrived at after deducting manufacturing costs and selling costs reimbursed to the assessee by the Government concerned. Section 28(b) specifically states that income from cash assistance, by whatever name called, received or receivable by any person against exports under any scheme of the Government of India, will be income chargeable to income-tax under the head "Profits and gains of business or profession". Y cash assistance received or receivable against exports schemes are included as being income under the head "Profits and gains of business or profession", subsidies which go to reimbursement of cost in the production of goods of a particular business would also have to be included under the head "Profits and gains of business or profession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 1781/Mum/2000 dated 20.06.2022 following the decision in assessee's own case for the A.Ys. 1995-96, relevant portion is reproduced below:- "5. The first issue raised by the assessee in appeal is against the exclusion of excise duty and sales tax from total turnover for the purpose of computing deduction u/s 80HHC of the Act. A perusal of the assessment order and the order of CIT(A) would show that perse assessee's eligibility to claim deduction u/s 80HHC is not disputed. It is only some of the components of total income from exports on which the assessee has claimed benefit of deduction u/s 80HHC of the Act that have been excluded by the Assessing Officer while computing the deduction. In Assessment Year 1995-96 similar ground was raised by the assessee before the Tribunal assailing exclusion of excise duty and sales tax from the total turnover while computing deduction u/s 80HHC of the Act. The Coordinate Bench in appeal by the assessee in ITA No.3144/Mum/1999(supra) decided this issue in favour of the assessee by placing reliance on the judgment rendered by Hon'ble Supreme Court of India in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 32. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 33. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 2230/Mum/2000 dated 20.06.2022 held as under: - "We find that in assessment year 1995-96 the Assessing Officer had accepted assessee's claim of deduction u/s. 80HHC of the Act in respect of Technical Know- how Charges received from Maharastra Scooters Ltd., a State Government an Undertaking. Subsequently, the LLATE Commissioner of Income Tax (CIT) invoked the provisions of Section 263 of the Act to disallow 90% of Technical Know-how Charges on the premise that the income from Technical Know-how is not directly from export business, hence, not eligible for deduction u/s. 80HHC of the Act in full. The CIT further held that income from Technical Know-how Charges falls under the 'charges' referred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. This finding is also not legally valid. The technical know-how fees received by the assessee cannot be commission or interest or rent. The reminder is charges or any other receipts of similar nature. The work "charges" used in sub clause(i) of clause (baa) is found in the company of expressions like brokerage", "commission", "interest", "rent". If we apply the principle of "efusdem generis", the term "charges" has to be read in the company of the preceding words, such as brokerage, commission, interest, rent, etc. The brokerage or commission or interest or rent does not have any nexus with any manufacturing or processing of the core business activity that could be carried on by the assessee. Similarly, the word "charges" appearing in the company of those words also will not have any nexus with manufacturing or processing or core business activity of an assessee. The word "charges" appearing in the company of brokerage, commission interest, rent etc. cannot be singled out and imputed with a different meaning alleging a nexus with manufacturing or processing or core business activities. Efusdem generis rule is the rule of generic words following more specific ones. The rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submitted that the Ld CIT(A) has already decided the issue against the assessee and ground raised by the revenue is misconceived. 36. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 37. Considered the rival submissions and material placed on record. We observe that Ld CIT(A) has already decided the issue against the assessee and revenue has wrongly raised this ground of appeal. Therefore, the ground raised are not relevant and the issue is already decided against the assessee and the assessee also has not raised any ground in this regard. Therefore, this ground also dismissed as not maintainable. 38. With regard to Ground No. (i) which is in respect of allowing expenditure of Rs..7.42 lakhs on lease land for 99 years as revenue expenditure, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 39. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 40. Considered the submissions and material placed on record, we observe from the record that identic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been amortized relates to the payment for lease hold of land and building. The Ld. CIT(A) has dismissed the assessee's ground on the reason that this issue has been decided against the assessee by the Ld. CIT(A) in the earlier year. The Tribunal also in the A.Y. 2000-01 in ITA No.3314/M/2005 has dismissed the assessee's appeal on the following reasoning:- "6. Ground 2 relates to CIT (A)'s decision in confirming the disallowance of the assessee's claim of Rs 2,97,015/- u/s 35D. 7. During the assessment proceedings before us, the Ld AR stated that the said expenditure was incurred in connection with the issue of shares for increase in share capital. AO made disallowance basing on the apex court judgments in the case of M/s Brooke Bond India Ltd (225 ITR 798)(SC) and M/s Punjab State Industrial Development Corporation Ltd (225 ITR 792)(SC). The CIT (A) confirmed the action of the AO stating that the said expenditure should not be allowed as revenue expenditure. During the proceedings before us, Ld AR for assessee relied on various judgments including the jurisdictional High Court judgment in the case of Maharashtra Ugine and Steel Co Ltd (250 ITR 84)(Bom). After going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, this ground raised by the revenue is dismissed. 41. Further, in assessee's own case for the A.Y. 1996-97 the Coordinate Bench of the Tribunal in ITA.No. 2230/Mum/2000 dated 20.06.2022 following the decision in assessee's own case for the A.Y. 1995-96, held as under: - "20. A perusal of the impugned order shows that the Assessing Officer following the assessment made in assessment year 1995-96 has disallowed assessee's claim of proportionate write off premium paid on leasehold land Rs.7.42.135/- In first FRITH appellate proceedings the CIT(A) following the order of first appellate authority in assessment year 1985-86 and 1995-96 reversed the findings of Assessing Officer, hence, the Revenue is in appeal against the findings of the CIT(A) on this issue. We find that in assessment year 1995-96 the Co-ordinate Bench has upheld the findings of the CIT(A) by placing reliance on various decisions viz: (i) DCIT vs. Sun Pharmaceutical Industries Ltd., 329 ITR 479 (Guj); (ii) United Phosphorus Ltd. vs. ACIT, 230 Taxman 590(Guj); and (iv) Lupin Ltd. vs. JCIT in ITA No.5088/Mum/2005 for A.Y. 1994-95 decided on 02/11/2012. The Revenue has not been able to controver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n are allowed as deduction in computing the amount with reference to which such tax is charged, but does not include any tax chargeable with reference to the value of any particular asset of business or profession." In view of the Supreme Court decision in ACC Ltd. case (supra), last part of the Explanation i.e., "but does not include any tax chargeable with reference to the value of any particular asset of the business or profession" has to be read as in continuation of the beginning part of the Explanation i.e., "for the purpose of this sub-clause wealthtax means wealth-tax chargeable under the WT Act, 1957 (27 of 1957)". Thus, these two parts of the Explanation put together would read as under: "For the purpose of this sub-clause wealth-tax means wealth-tax chargeable under the WT Act, 1957 (27 of 1957), but does not include any tax chargeable with reference to the value of any particular asset of the business or profession". 8. Accordingly, the wealth-tax chargeable with reference to the value of any particular asset of the business or profession will not be covered by the prohibition clause of Section 40(a)(iia) of the IT Act, 1961, and as such wealthtax could be admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground raised by the revenue is dismissed. 48. With regard to Ground No. (k) which is in respect of allowing expenses on GDR issue as covered in section 35D, Ld. AR of the assessee submitted that Expenses amounting to Rs..11,71,99,600 incurred in connection with issue of GDR of USD 109,999,983 in the previous year relevant to A.Y.1995-96. Expenditure claimed u/s. 37(1) in AY 1995-96 disallowed relying on the decision of the Supreme Court in the case of Brooke Bond India Ltd. (225 ITR 795) - Alternative claim for deduction u/s. 35D not considered in AY 1995-96 since expansion of industrial undertaking was not completed. Copy of Assessment Order for AY 1995-96 is placed on record, Letter dated 11 February 2000 submitted before the Assessing Officer. 49. Ld. AR of the assessee relied on the following case laws: - a) CIT vs. Shree Synthetics Ltd. (162 ITR 819) b) Gujarat Narmada Valley Fertilizers Co. Ltd. vs. DCIT (ITA No. 1463/Ahd/2007 c) S.S.I. Limited vs. DCIT (85 TTJ 1049) (Chn) 50. On the other hand, Ld. DR relied on the order of the Assessing Officer. 51. Considered the submissions and material placed on record, from the submissions of the parties, we observe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 crores being gross proceeds - 8.77 crores being expenses). Further from the proceedings for A.Y. 2001-02 it was noticed that Rs.128.93 crores was invested in UTI Unit 65 scheme out of the GDR issue proceeds and since this investment was 70% of the GDR issue process, 70% of the expenses of Rs.87.73 lacs written off in that year by the assessee amounting to Rs.62 lacs was disallowed u/s. 14A as the dividend income in respect of UTI was exempt under the Act. It is mentioned by the Assessing Officer that excluding the investment in UTI the amount invested towards the cost of project is Rs.54.02 crores ( 182.95 crores - Rs.128.93 crores) and 2.5% of such cost works out to Rs.1.35 crores. Therefore 10 % of this amount of Rs.1.35 crores at Rs.13.5 lacs was allowed by the Assessing Officer under section 35D. 25. The learned CIT(A) confirmed the action of the AO. 26. The learned counsel for the assessee argued that the assessee has been allowed the identical claim since 1995-96 by the Income-tax Department and it is only in the impugned year where the Department has doubted its decision when there is no change of the facts and circumstances of the case. 27. The learned DR, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1996 - BAL purchased assorted items of equipments at the original cost of purchase, i.e.Rs..6,92,22,335/-- The assets were leased back to JCT. Further, he brought to our notice the decision of the Coordinate Bench in assessee's own case for the Assessment Year 1996-97 and by referring to Para No.24 he submitted that depreciation on such assets claimed and allowed by the order of the Tribunal in the earlier year by dismissing the revenue ground in AY 1996-97. During the year under consideration, BAL has claimed depreciation on the opening written down value of the block which includes the above assets. Once depreciation allowed in earlier year and such asset forms part of block of assets, depreciation ought to be allowed in subsequent years. for the above proposition he relied on the following case law: (a) Director of Income-tax (International Taxation) - II v. HSBC Asset Management India Private Limited [2014] 47 taxmann.com 286 (Bombay) (b) Commissioner of Income-tax 7 v. Sonic Biochem Extractions Private Limited (ITA No. 2088 of 2013) (Bombay) (c) CIT V. G.N.Agrawal (Individual) 217 ITR 250 57. On the other hand, Ld. DR relied on the order of the Assessing Officer. 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Punjab State Electricity Board and the Electricity Board claimed deduction in respect of lease rental, the Department allege that sale of asset to third party and the same asset being taken on lease for claiming deduction in respect of lease rental is a colorable device to reduce tax liability and have denied the same. The Tribunal decided the issue in favour of the assessee holding the transaction of sale and lease back of asset as genuine. The Revenue carried the issue in appeal before the Hon'ble High Court raising following substantial question of law: "Whether on the facts and in the circumstances of the case, the income-tax Appellate Tribunal is legally correct in holding that in the present case/ no colourable device has been adopted by the assesses, even when the intention of the assessee behind drafting the agreements between the assessee and the financial institution was to reduce the tax liability artificially of both the parties and as such the ratio of the decision of the hon'ble apexcourt in the case of McDowell Ltd. v, CTO [1985] 154 ITR 148 (SC) has wrongly been, interpreted" The Hon'ble High Court rejected the appeal of Revenue by holding as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is not a ploy to reduce tax incidence and is an accepted arrangement. In view of our above findings, we see no merit in Ground No.11 raised by the Revenue, hence, the same is dismissed." 59. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed and the issue involved in relation to transaction with JCT Ltd are similar to the above findings in relation to transaction with PSEB, accordingly, ground raised by the revenue is dismissed. 60. With regard to Ground No. (k) which is in respect of taxability of surplus on account of redemption of preference shares, debentures, bonds, certificate of deposits as revenue receipts and not under the head "Capital Gains" and not allowing indexation of such gains of Rs..4,60,02,985/-. Ld. AR of the assessee submitted that the ground of appeal raised by the revenue is infructuous as in the Assessment Order, the Assessing Officer himself assessed such surplus on redemption under the head "capital gain". Further, he submitted that the indexation benefits to be allowed on long term capital assets. In addition to the above, Ld. AR of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, which is in respect of redemption of treasury bills, Ld. AR of the assessee brought to our notice the letter dated 10.03.2000. He submitted that Surplus on redemption was shown as short- term capital gains in the return of income out of abundant caution. Redemption results in total extinguishment of securities other than by way of transfer and is not be covered within the definition of transfer as per section 2(47). In support of the above contentions, he relied on the decision of the Hon'ble Supreme Court in the case of Vania Silk Mills Pvt. Ltd. v. CIT (191 ITR 647) (SC). 66. On the other hand, Ld. DR relied on the order of the Assessing Officer. 67. Considered the rival submissions and material placed on record, we observe from the record that the issue involved in this ground of appeal is similar to the grounds of appeal raised in Ground No. (K). However, the surplus received on redemption of treasury bills was shown as short term capital gain in the return of income out of abundant caution by the assessee itself and the same was sustained by the Ld.CIT(A). However, before us in the grounds of appeal revenue has raised this issue that the above said surplus has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decided the issue in favour of the Revenue. Thus, in view of uncontroverted findings of the Co-ordinate Bench in assessee's own case in the immediately preceding assessment year, ground No.8 in appeal by the Revenue is allowed." 69. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, grounds raised by the revenue is allowed. Therefore, we are not inclined to sustain the findings of the Ld.CIT(A), accordingly, ground raised by the revenue is dismissed. 70. In the result, appeal filed by the Revenue is partly allowed. C.O. NO. 96/MUM/2002 (ASSESSEE CROSS OBJECTION) 71. Assessee has raised following grounds in its cross objection: - "I. DEDUCTION UNDER SECTION 80HHC 1.1 On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the contention of the Joint Commissioner of Income-tax that income from scrap sales, miscellaneous sales and sundry sales aggregating to Rs.50,78,91,907/- are includible in 'total turnover for the purpose of computing the deduction under section 80HHC. 1.2 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of new dies and moulds used during the year represented only replacements either on account of wear and tear of the dies or on account of change in the design of the press part for the production of which the aforesaid dies and moulds have been used and hence ought to be allowed as a deduction. V. TAXABILITY OF SURPLUS ON REDEMPTION OF SECURITIES 5.1 On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in holding that the surplus arising on redemption of securities is chargeable to tax. The Commissioner of Income-tax (Appeals) failed to appreciate that on maturity/ redemption of the securities, the said asset ceases to exist and the extinguishment of the right in the asset is on account of the extinguishment of the asset itself and is not a transfer of the right because the asset ceases to exist." 72. Further, assessee has raised following additional grounds: - "1. On the facts and in the circumstances of the case and in law, it is prayed that while computing 'indirect costs attributable to the export of trading goods for the purpose of deduction under section 80HHC of the Income-tax Act, 1961 (the Act), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 75. Considered the rival submissions and material placed on record, we observe that as the said additional grounds are legal grounds, wherein, the facts are on record and facts do not require fresh investigation, following the decision of Hon'ble Supreme Court in the case of National Thermal Power Co., Limited v. CIT 229 ITR 383 (SC), we admit the said additional grounds of appeal. 76. With regard to Ground No. 1 which is in respect of exclusion of scrap sales, miscellaneous scrap sales and sundry sales from total turnover for the purpose of calculating deduction u/s. 80HHC of the Act. Ld.AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal and decided the issue in favour of the assessee and against the department. 77. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 78. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 1781/Mum/2000 dated 20.06.2022 following the decision in assessee's own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 these very items were excluded from total turnover while computing deduction u/s 80HHC of the Act. In assessment year 1995-96, the assessee carried the issue in appeal before the Tribunal in ITA No.3144/Mum/1999 (supra). The Co-ordinate Bench after placing reliance on the decision rendered by Hon'ble Supreme Court of India in the case of CIT vs. Punjab Stainless Steel Industries Ltd. 364 ITR 144 decided the issue in favour of assessee. Since, in the impugned assessment year there is no distinguishing feature, we see no reason to take a different view. Consequently, additional ground No.1 of the appeal is allowed." 79. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the assessee is allowed. 80. With regard to Ground No. 2 which is in respect of entertainment expenses, Ld.AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal and decided the issue in favour of the revenue and against the assessee. 81. On the other hand, Ld. DR has fairly accepted the submissions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1995-96 similar arguments were raised by the Id. Counsel for the assessee and the same were rejected by the Tribunal. The decisions on which the ld. Counsel has placed reliance have already been considered and distinguished by the Tribunal. We see no reason to take a contrary view. Following the order of Co-ordinate Bench in assessee's own case on same set of facts ground No.3 raised by the assessee is dismissed." 83. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the assessee is dismissed. 84. With regard to Ground No. 3 which is in respect of disallowance of fines and penalties, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal and decided the issue in favour of the revenue and against the assessee. 85. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 86. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the revenue for the A.Y. 1993-94. Whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y accepted the submissions of the Ld.AR. 93. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in the immediately preceding assessment year in ITA.No. 1781/Mum/2000 dated 20.06.2022 following the decision in assessee's own case for the A.Y. 1995-96, held as under: - "5.3 In additional ground No.2 of the appeal the assessee has assailed exclusion of certain expenses i.e. "indirect cost" attributable to export of trading goods for the purpose of deduction u/s 80HHC of the Act. In first appellate proceedings the CIT(A) directed the Assessing Officer to exclude expenses attributable to other Income and export incentive, estimated at 10%. We find that similar issue had come up before the Co-ordinate Bench in assessee's own case for the Assessment Year 1995-96 (supra). The Tribunal after examining the issue placed reliance on the decision of Hon'ble Supreme Court of India in the case of Hero Exports vs. CIT 295 ITR 454 and the decision of Special Bench of the Tribunal in the case of Surendra Engineerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue has been decided by the Tribunal in immediately preceding Assessment Year in favour of the 8.2 In the case of Zandu Pharmaceuticals Ltd. vs CIT(supra) it has been held that while computing profits and gains of the concerned undertaking only expenses relating thereto can be deducted. The expenses attributable to other unit or head office expenses which have no relevance to the Industrial undertaking cannot be deducted in respect of the said undertaking while computing profit and gains of the said undertaking for the purpose of computing deduction u/s 80HH, 801 and 80IA of the Act. The Co-ordinate Bench in assessee's own case for Assessment Year 1995 96 following the ratio laid down in the case of Zandu Pharmaceuticals Ltd.(supra) allowed identical ground raised in the appeal before the Tribunal. Since, there hasbeen no change in the facts and legal position in impugned assessment year, the additional ground No.3 of the appeal is decided in favour of the assessee." 98. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee is allowed. 104. With regard to additional Ground No. 5, which is in respect of deduction on account of provision for doubtful debts in the year of actual write-off, if the same is not allowed in the year of provision. As we have adjudicated the additional ground No. 4 in favour of the assessee, this ground becomes infructuous. Accordingly, ground raised by the assessee is kept open at this stage. 105. With regard to additional ground No. 6 which is in respect of exclusion of provision for doubtful debts written back in A.Y. 1997-98, of which no deduction was allowed in the year of making the provision, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assessee and against the department. 106. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 107. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1996-97. While deciding the issue, the Coordinate Bench of the Tribunal in the immediately prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue crops us at the assessment stage. These additional grounds are thus treated as partly allowed. 31. Therefore, respectfully following the above decisions of Coordinate bench of ITAT in assessee's own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Therefore, we remit this issue to the file of AO to follow the findings in the consequential order passed in Assessment Year 1993-94 and 1994-95 in assessee's own case. Accordingly, this ground is allowed for statistical purposes," For parity of reasons we restore this issue back to the file of Assessing Officer to decide the same in line with the aforesaid directions. The additional ground No.5 ofthe appeal is allowed for statistical purpose." 108. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1996-97 is respectfully followed, accordingly, ground raised by the assessee is allowed for statistical purpose. 109. In the result, cross objection filed by the assessee is partly allowed. 110. To sum-up, appeal filed by the revenue as well as cross objection filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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