TMI Blog2024 (1) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Central Government and difference between the amount payable on maturity and the discounted value of the treasury bills at the time of issue was treated as interest on securities - HELD THAT:- We find that in the case of British Bank of Middle East v/s CIT [ 1998 (6) TMI 82 - BOMBAY HIGH COURT] held that the difference Between the amount payable on maturity and discounted value of the treasury bills at the time of issue is interest on securities. The ITAT, Mumbai in the case of the assessee itself for the A.Y. 1998-99 [ 2023 (8) TMI 1422 - ITAT MUMBAI] and A.Y. 1997-98 [ 2023 (4) TMI 1288 - ITAT MUMBAI] has decided the issue in favour of the assessee. The co-ordinate bench of the ITAT in the case of the assessee itself after following the decision of the Hon ble Supreme Court in the case of CIT v/s Grace Collis [ 2001 (2) TMI 9 - SUPREME COURT] that surplus on redemption of treasury bills is to be taxed under the head Capital Gains. Therefore, we direct the AO to assessee the same as capital gains. Therefore, this ground of appeal is allowed. Nature of expenses - Rejecting the claim of deduction of expenditure incurred with respect to Masala Grinder and toaster - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s defined in sec. 80-O of the Act and it is eligible for deduction u/s 80-O. Following the decision of ITAT as referred above, this ground of appeal of the assessee is allowed. The AO is directed to allow the claim of deduction u/s 80-O of the Act. Computation of deduction u/s 80HHC - While computing indirect cost attributable to export of trading goods for the purpose of computing deduction under section 80HHC, expenses attributable to other income and export incentive estimated at 10% thereof ought to be excluded - HELD THAT:- Identical issue on similar fact has been adjudicated in favour of the assessee by co-ordinate bench of ITAT [ 2023 (4) TMI 1288 - ITAT MUMBAI] A.Y 1997-98 wherein after examining the issue placed reliance on the decision of Hon'ble Supreme Court of India in the case of Hero Exports [ 2007 (11) TMI 13 - SUPREME COURT] and the decision of Special Bench of the Tribunal in the case of Surendra Engineering Corporation vs. ACIT [ 2002 (12) TMI 199 - ITAT BOMBAY-H] and decided the issue in favour of assessee. Deduction u/s 80HH and 80-IA - Common Expenditure not specifically incurred towards the tax incentive unit ought not to be considered for com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery suppliers is capital in nature. In this regard, the Tribunal has followed the decision rendered in AY 1993-94, wherein it was decided in favour of the assessee following the decision rendered by Hon'ble Andhra Pradesh High Court in the case of Barium and Chemicals Ltd [ 1987 (2) TMI 18 - ANDHRA PRADESH HIGH COURT] Deduction of expenditure incurred in respect of jigs and fixtures as revenue expenditure allowed. Allowing corresponding adjustment in the opening stock under section 145A - HELD THAT:- During the course of appellate proceedings before us the ld. Counsel has also referred the decision of Hon ble Bombay High Court in the case of CIT Vs. Mahalaxmi Glass Works (P) Ltd. [ 2009 (4) TMI 182 - BOMBAY HIGH COURT] After considering the judicial pronouncements referred by the ld. Counsel and the judicial pronouncements relied upon by the ld. CIT(A) in his finding we don t find any reason to interfere in the decision of ld. CIT(A) holding that while making addition of unused modvat credit corresponding adjustment in the opening stock should also be made. Therefore, this ground of appeal of the revenue is dismissed. Foreign travel expenses of wife of MD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation (baa), after following his order for assessment year 1998-99. Penalty u/s 271(1)(c) - difference between the returned income and the assessed income on account of issue pertaining to reduction of deduction u/s 80HHC - HELD THAT:- As we find that assessee has claimed deduction u/s 80HHC of the Act on the basis of the separate audit report furnished u/s 80HHC(4) of the Act and certified by the auditor as per the tax audit report. CIT(A) has deleted the penalty on the reason that merely that the AO included or excluded certain items within the term indirect cost that should not be a basis for levying penalty u/s 271(1)(c) for concealing particulars of income or furnishing inaccurate of income thereof. As decided in the case of CIT Vs. Reliance Petro Products Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] held that a mere making a claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars in respect of income of the assesse. Considering the above facts and findings we find no infirmity in the decision of ld. CIT(A) in deleting the impugned penalty therefore this ground of appeal of the revenue is dismissed. Penalty for claiming ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the course of appellate proceedings before us revenue has not brought any material contrary to the finding given by the ld. CIT(A), therefore, we don t find any merit in this ground of appeal of the revenue and the same stand dismissed. Interest u/s 234B - HELD THAT:- During the course of appellate proceedings before us the assessee submitted that it has paid the total advance tax of Rs. 204,00,00,000/- whereas assessed tax comes to Rs. 195,36,36,406/- and 90% of the assessed tax comes to Rs. 175,82,72,765/-, therefore, there was no shortfall in payment of advance tax. During the course of appellate proceedings before us revenue has not brought any material contrary to the submission and finding of the ld. CIT(A) therefore, this ground of appeal of the revenue also stand dismissed. - ABY T VARKEY, JUDICIAL MEMBER SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For the Appellant : Ms. Vasanti Patel Shri Charu Mittal For the Respondent : Shri. Krishna Bandi ORDER PER AMARJIT SINGH :- 1. All these appeals filed by the assessee and revenue are interconnected and based on identical issue and facts, therefore, for the sake of convenience these appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 dated 20.01.2021 and vide ITA No. 1781/Mum/2000 dated 20.06.2022. 6. We find that coordinate bench of the ITAT in the above referred decisions have decided the issue in favour of the revenue. Therefore, following the decisions of Co-ordinate Bench assessee as referred above, we do not find any merit in this appeal. This Ground of appeal of the assessee stand dismissed. Ground No. 2 Taxability of surplus on redemption of Treasury bills under the head Profits and Gains of Business . 7. During the assessment year, the AO noticed that the assessee has received surplus on redemption of Treasury bills of Rs. 19,26,772/- during the year under consideration. The AO discussed at Para 1.8 of the assessment order that the treasury bills were sold by the Reserve Bank of India on behalf of the Central Government. The difference between the amount payable on maturity and the discounted value of the treasury bills at the time of issue was treated as interest on securities. The AO has relied upon the decision of the Hon ble Bombay High Court in the case of British Bank of Middle East v/s CIT [233 ITR 251]. 8. The assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 55,500/-. 14. During the year the assessee incurred expenditure in respect of fines and penalties aggregating to Rs. 55,500/-. The AO has disallowed the claim of this expenditure and the Ld. CIT(A) has sustained the disallowance. 15. After hearing both the sides and perusal of material on record, we find that similar claim of expenses was decided against the assessee by the co-ordinate bench of ITAT in the case of the assessee itself vide ITA No. 9564/Mum/2004 (A.Y. 1998-99), ITA No. 5030/Mum/2005 (A.Y. 1997-98). Following the decision of the co-ordinate benches this ground of appeal of the assessee stand dismissed. Ground No. 7 Deduction in respect of Wealth Tax paid Rs. 12,96,152/- 16. During the course of assessment the AO disallowed the assessee s claim of deduction of wealth tax paid during the relevant financial year amounting to Rs. 12,56,152/- 17. The Ld. CIT(A) has sustained the addition. The assessee has submitted that similar issue on identical facts in the case of the assessee from A.Y. 1995-96 to A.Y. 1998-99 have been decided in favour of the assessee. We have perused the decision of the ITAT in the case of the assessee for A.Y. 1998-99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olombia. The assessee has claimed deduction u/s 80-O of the Act on the aforesaid amount received. However the AO had disallowed the claim of deduction stating that it was not in the nature of drawing, design, invention, patent and trademarks, therefore, the same was not allowed for deduction u/s 80-O of the Act. The Ld. CIT(A) has sustained the disallowance made by the AO. 22. Heard both the sides and perused the material on record. We find that identical issue on similar fact in the case of the assessee itself has been adjudicated by the co-ordinate bench of ITAT in the favour of the assessee for the A.Y. 1998-99 vide ITA No. 9564/Mum/2004. In the above referred decision it was noticed that in accordance with the agreement that assessee has given license to assemble its scooters models. The assessee permits the same and accordingly supplied the drawings relating to those parts and collects technical knowhow fee. The co- ordinate bench held that the technical knowhow fee received by the assessee would fall under the category of Royalty as defined in sec. 80-O of the Act and it is eligible for deduction u/s 80-O. Following the decision of ITAT as referred above, this ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench on the issue. Following the decision of Tribunal in assessee's own case for the immediately preceding Assessment Year, the additional ground No.2 of the appeal is allowed. 94. 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. Following the decision of the co-ordinate bench as referred above, this ground of appeal is allowed. Additional Ground of appeal 2- Common Expenditure not specifically incurred towards the tax incentive unit ought not to be considered for computing the deduction under section 80HH and 80-IA 25. In support of its claim, the ld. Counsel has referred following decisions of coordinate benches wherein similar issue on identical fact has been decided in favour of the assessee vide ITA No. 3493/Mum/1999 (1995-96), 1781/Mum/2000 (1996-97), 5030/Mum/2001 (1997-98). The relevant extract of the decision is reproduced as under : 97. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le computing deduction under section 80HH and 80IA 27. During the course of assessment, in support of its claim the ld. Counsel submitted that similar issue on identical facts has been decided by the co-ordinate bench of ITAT in favour of the assessee in the case of assessee itself vide ITA No. 3493/Mum/1999 (1995-96), 1781/Mum/2000 (1996-97), 5030/Mum/2001 (1997-98). 28. In the above referred decision the issue was decided in favour of the assessee after following the decision in favour of the assessee after following the decision of the co-ordinate bench on the basis of the decision of the Hon ble Supreme Court in the case of CIT v/s Meghalaya Steels Ltd. (2016) (383 ITR 217) SC. Following the decision of the co-ordinate bench, we direct the AO to allow deduction u/s 80 IA of the Act in respect duty draw back and interest income. Additional Ground No. 4 If duty Drawback and interest is excluded while computing deduction under section 80HH and 80 IA, then only the net interest and net drawback should be excluded 29. Since additional ground No.3 is allowed, therefore, this ground of appeal become infructuous and the same stand dismissed. Additional Grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection laid down by the co-ordinate bench in the aforesaid decision. Therefore, this ground of appeal is allowed for statistical purpose. Additional Ground of Appeal No. 6: 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: 30. Since we have adjudicated the additional ground no. 5 as supra therefore, this ground of appeal become infructuous and same stand dismissed. Revenue appeal ITA No. 1933/Mum/2005 Ground No. 1 Deduction under section 35D in respect of GDR issue expenses: Rs. 11,71,99,600/- 31. During the course of assessment the AO has disallowed the expenses amounting to Rs. 11,71,99,600/- incurred in connection with the issue GDR of USD 109,999,983 million relevant to A.Y. 1995-96. The Ld. CIT(A) allowed the appeal of the assessee. The Ld. CIT(A) held that expenditure of Rs. 11,71,99,600/- was covered u/s 35D and the assessee was entitled to pro deta deduction u/s 35D in that assessment year. 32. Heard both the sides and perused the material on record. We find that similar issue on identical fact has been adjudicated in favour of the assessee by the co-ordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97-98. The relevant extract of the decision of the ITAT for A.Y. 1998-99 vide ITA No. 5952/Mum/2004 is reproduced as under :- 15.3 We heard the parties on this issue and perused the record. We notice that the AO had disallowed the claim of depreciation only on the ground that it was not a genuine lease transaction, i.e., it is a finance transaction entered under the garb of lease transaction. The above said view of the AO has since been rejected by Ld CIT(A) and Tribunal in AY 1996-97 and 1997-98. Hence the basis on which the disallowance of depreciation made by the AO has already been reversed. The ld D.R has raised a new contention that the Explanation 4A should be applied to this lease transaction, which is not the case of the AO. Accordingly, we do not find it necessary to consider the new contention raised by Ld D.R. Accordingly, following the decision rendered by the co- ordinate benches in the assessee's own case, we confirm the order passed by Ld CIT(A) on this issue. 33. Therefore, following the decision of ITAT as above, we do not find any merit in this ground of appeal of the Revenue and the same stand dismissed. Ground No. 3 Allowing deduction in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um/2001 (A.Y. 1997-98), 8952/Mum/2004 (1998-99). The relevant extract of the decision vide ITA No. 8952/Mum/2004 for A.Y. 1998-99 is reproduced as under :- 7.0 Ground no.4 urged by the revenue relates to decision of Ld CIT(A) in holding that the penalty charges received from machinery suppliers amounting to Rs. 30,06,738/- is capital receipt. This is also a recurring issue. In AY 1997-98 (supra), the Tribunal has followed the decision rendered in AY 1995-96, wherein it was held that the penalty charges received from machinery suppliers is capital in nature. In this regard, the Tribunal has followed the decision rendered in AY 1993-94, wherein it was decided in favour of the assessee following the decision rendered by Hon'ble Andhra Pradesh High Court in the case of Barium and Chemicals Ltd (168 ITR 164). Consistent with the view taken in the earlier year, we uphold the decision rendered by Ld CIT(A) on this issue. 37. Following the decision of mentioned above, we do not find any error in the decision of Ld. CIT(A). Therefore, this ground of appeal of the revenue is dismissed. Ground No. 5- Allowing deduction of expenditure incurred in respect of jigs and fixtures a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the ld. CIT(A) held that while making addition of unused modvat credit corresponding adjustment in the opening stock should also be made. 48. Heard both the sides and perused the material on record. During the course of appellate proceedings before us the ld. Counsel has also referred the decision of Hon ble Bombay High Court in the case of CIT Vs. Mahalaxmi Glass Works (P) Ltd. (2009) 318 ITR 116 (Bom). After considering the judicial pronouncements referred by the ld. Counsel and the judicial pronouncements relied upon by the ld. CIT(A) in his finding we don t find any reason to interfere in the decision of ld. CIT(A) holding that while making addition of unused modvat credit corresponding adjustment in the opening stock should also be made. Therefore, this ground of appeal of the revenue is dismissed. Ground No. 8 Allowability of deduction in respect of foreign travelling expenses of wife of Managing Director : Rs. 5,43,184/- 49. During the course of assessment, the AO noticed that expenditure pertaining to foreign travel of wife of Managing Director was claimed as deduction. The AO stated that same was not incurred for the purpose of business, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business or commercial expediency in incurring expenses on foreign trips of wife of M D, but deleted the addition on the basis of quantum of expenditure, status of the M D and approval by Board. These are not the proper reasons for allowing this type of expenditure, as held by the jurisdictional High Court. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and confirm the disallowance made by the AO. 52. After following the decision of coordinate bench on the similar facts and issue as referred above find merit in this ground of appeal of the revenue, therefore, this ground of appeal of Revenue is allowed. Ground No. 09 Deleting disallowance of proportionate interest expense attributable to earning exempt income Rs. 1,07,79,990/- 53. This is undisputed fact that the assessee company was having sufficient own interest free fund which were more than investment made on which exempt income was earned. However, during the course of assessment the AO has disallowed the interest expenses amounting to Rs. 1,07,79,990/- and treated as attributable to earning exempt income. 54. The Ld. CIT(A) has deleted the addition. After hearing both the sides and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel submitted that these expenditure pertaining to assessment year 1998-99 were crystalized during the year under consideration, therefore, the same was correctly debited to the profit and loss account. The ld. Counsel has also submitted that identical issue on similar fact has also been adjudicated by the ITAT for assessment year 1998-99 vide ITA No. 8952/Mum/2004. We have perused the decision of ITAT as referred above wherein the claim of such expenses pertaining to assessment year 1997-98 were allowed during the assessment year 1998-99 on the ground that same were crystallized during the assessment year 1998-99. Following the decision of ITAT and considering the fact that impugned expenses were crystallised during the year under consideration we don t find any infirmity in the decision of ld. CIT(A) on this issue, therefore, this ground of appeal of the revenue is dismissed. Ground No. 11: 58. During the course of assessment the assessing officer has reduced 90% of the following items from the profit of the business while computing the deduction u/s 80HHC. a. Technical know-how: Rs. 4,57,7,672 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 160,11,024/- in respect of excess deduction claimed by the assessee u/s 80HHC of the Act and against penalty levied of Rs. 26,015/- for claiming deduction u/s 80-O of the Act. 64. The assessing officer has levied penalty on the difference between the returned income and the assessed income on account of issue pertaining to reduction of deduction u/s 80HHC of the Act. During the course of penalty proceedings ld. CIT(A) has deleted the impugned penalty holding that neither the assessee has concealed particulars of income nor furnished inaccurate particulars of income. 65. Heard both the side and perused the material on record. During the course of assessment the assessing officer has recomputed the claim of deduction u/s 80HHC of the Act after making various adjustment. However, the ld. CIT(A) has deleted all the adjustment except inclusion of sale of scrap and other miscellaneous receipt while computing turnover and computation of indirect cost. Thereafter the AO has levied penalty u/s 271(1)(c) on the difference in the amount of deduction claimed in the return of income and the amount allowed to the assessee as per assessment the order. After hearing both the side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot adjudicated the ground of levy of penalty u/s 271(1)(c) of Act amounting to Rs. 672,67,079/-. As discussed supra the ld. CIT(A) has already adjudicated ground of appeal of the assessee vide order dated 16.10.2006 holding that penalty levied u/s 271(1)(c) has been deleted on all the issued, therefore, this Cross Objection filed by the assessee has become infructuous the same stand dismissed. ITA No. 3055/Mum/2005 Ground No. 1: Taxability on surplus on redemption of securities as Capital Gains Rs. 1,94,19,926:- 70. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 1 of appeal vide ITA No. 2125/Mum/2005 as adjudicated supra in this order, therefore, applying the finding of ITA No. 2125/Mum/2005 as mutatis mutandis this ground of appeal of the assessee is also dismissed. Ground No. 2: Taxability on surplus on redemption of treasury bills as business income and not as Income from other sources Rs. 25,80,519/-: 71. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 2 of appeal vide ITA No. 2125/Mum/2005 as adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Therefore, this ground of appeal stand dismissed. Ground No.10 11: Exclusion of deduction u/s 80-IB for the purpose of computing deduction u/s 80HHC with respect to profit on traded goods: Rs. 18,78,052/-: Without prejudice to Ground No. 10, CIT(A) erred in not giving finding on the alternative plea that the assessing officer erred in taking profit of plant II at Rs. 92,75,35,870 instead of Rs. 77,97,32,447/-: 79. During the course of assessment the assessing officer has reduced an amount for Rs. 18,78,952/- on the ground that for similar amount deduction has been claimed u/s 80-IB of the Act, therefore, the same lead to double deduction. 80. The ld. CIT(A) has upheld the finding of the assessing officer. 81. Heard both the sides and perused the material on record. During the course of appellate proceedings before us the ld. Counsel referred the decision of Hon ble jurisdictional Bombay High Court in the case of Associated Capsules (P) Ltd. Vs. DCIT, Mumbai (2011) 197 taxman 84 (Bom) wherein it is held that after allowing of deduction computed under various provisions under heading C of chapter VI-A do not exceed 100% of profit of business of the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 3) b. ITAT AY 1997-98 (ITA No. 5030/Mum/2001, para no. 23 to 26, pg. no. 16 to 19 With the assistance of ld. representative we have perused the decision of ITAT the relevant extract of the decision is reproduced as under: 7.0 Ground No.4 and 5 urged by the assessee relate to the deduction claimed u/s 80IA of the Act, wherein the question is whether the duty drawback and interest income are eligible for deduction u/s 80IA of the Act. The co-ordinate bench has dealt with identical issues in the assessee s own case in AY 1997-98 in ITA No.5030/Mum/2001 (Revenue s appeal) and the Tribunal has held that the assessee is eligible for deduction u/s 80IA in respect of both the income referred above. In this regard, the co-ordinate bench has followed the decision rendered by Hon ble Supreme Court in the case of CIT vs. Meghalaya Steels Ltd (2016)(383 ITR 217)(SC). Following the order passed by the co-ordinate bench, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to allow deduction u/s 80IA of the Act in respect of duty draw and interest income. Following the decision of ITAT as referred above we direct the AO to allow the deduction u/s 80IA in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore this ground of appeal stand dismissed. ITA No.2655/Mum/2005 Ground No. 1: Deduction under Section 35D in respect of GDR issue expenses Rs. 3,45,06,99,697/-: 94. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 1 of appeal vide ITA No. 1933/Mum/2005 as adjudicated supra in this order, therefore, applying the finding of ITA No. 1933/Mum/2005 as mutatis mutandis this ground of appeal of the revenue is also dismissed. Ground No. 2: Depreciation in respect of sale and lease back transaction with JCT Limited Rs. 1,13,56,789/-: 95. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 2 of appeal vide ITA No. 1933/Mum/2005 as adjudicated supra in this order, therefore, applying the finding of ITA No. 1933/Mum/2005 as mutatis mutandis this ground of appeal of the revenue is dismissed. Ground No. 3: Allowing deduction in respect of expenditure incurred on dies and moulds as revenue expenditure: Rs. 35,29,43,838/-: 96. Since the facts and the issue involved in this ground of appeal is similar to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 19,50,000/- were allowable after relying on the decision of Hon ble Madras High Court as referred above. 101. Heard both the sides and perused the material on record. During the course of appellate proceedings before us the ld. D.R has not brought any material in contradictory to the findings of ld. CIT(A), therefore, we don t find any merit in this appeal of the revenue the same stand dismissed. Ground No. 7: Allowing deduction in respect of proportionate premium on leasehold land: Rs. 24,73,932/-: 102. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 6 of appeal vide ITA No. 1933/Mum/2005 as adjudicated supra in this order, therefore, applying the finding of ITA No. 1933/Mum/2005 as mutatis mutandis this ground of appeal of the revenue is dismissed. Ground No. 8: Allowability of deduction in respect of foreign travelling expenses of wife of Managing Director: Rs. 5,84,925/-: 103. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 8 of appeal vide ITA No. 1933/Mum/2005 as adjudicated supra in this order, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA 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 of CIT vs. Laxmi Machine Works, 290 ITR 667. The facts germane to the issue raised the present appeal are admittedly identical to the facts in Assessment Year 1995-96, therefore, following the decision of Co-ordinate Bench the ground No.1 raised in the appeal is allowed for parity of reasons. Following the decision of ITAT as supra we don t find any merit in this ground of appeal, therefore, the same stand dismissed. Ground No. 11: Exclusion of 90% of the following from the profits of the business while computing deduction under section 80HHC:- a. Technical know how: Rs. 4,38,66,301 b. Insurance claims: Rs. 1,05,09,269 c. Miscellaneous receipts: Rs. 17,38,04,358 d. Sundry Credit Balance: Rs. 40,06,317 e. Bad Debts recovered: Rs. 32,858 f. Provision no longer required: Rs. 11,21,94,570 107. Since the facts and the issue involved in this ground of appeal is similar to the facts and issue involved in the ground no. 11 of appeal vide ITA No. 1933/Mum/2005 as adjudicated s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 94. 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. Following the decision of the ITAT we don t find any merit therefore, this ground of appeal of the revenue stand dismissed. Ground No. 13: Allowance of deduction u/s 40(a)(i) in respect of expenditure incurred in foreign currency: Rs. 26,69,904/-: 109. During the year under consideration the assessee has incurred expenditure in foreign currency amounting to Rs. 194.85 lacs and tax at source had been deducted wherever applicable and in some cases no tax was deducted. The assessing officer has disallowed the amount of Rs. 26,62,904/- u/s 40(a)(i) in respect of the following expenditure: Sr. No. Particulars Rs. 1. Research and development expenses 13,04,852 2. Motor Car Expenses 34,354 3. Truck Van Expenses 39,838 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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