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2019 (8) TMI 1826 - ITAT KOLKATADisallowance of additional depreciation on energy saving devices - HELD THAT:- We find that there are no additions during the year to the block of assets where the rate of depreciation is at the rate of 80%. The assessee has claimed the depreciation on the opening written down value as on 01/04/2010. Later as quoted the order of the jurisdictional Bench of the ITAT in the case of Damodar Valley Corporation [2016 (7) TMI 747 - ITAT KOLKATA] and upheld the claim of the assessee. We find no infirmity in the same. The submissions of the ld. D/R that this case-law does not refer to a period prior to 01/04/2013, the date on which the amendment has come into effect, is not correct. Hence, we uphold the findings of the ld. CIT(A) and dismiss this ground of the revenue. Disallowance u/s 14A r.w.r. 8D - CIT(A) held that the assessee company has duly discharged the onus by proving that loan funds were utilised for business purpose and not for making any investments - HELD THAT:- We uphold these findings and dismiss this ground of the revenue as the factual findings of the ld. CIT(A) have not been controverted by the ld. D/R as held when no dividend income was earned from the investments during the year, then no disallowance can be made u/s 14A of the Act with reference to cost of such investments - Disallowance made by AO set aside - Decided in favour of assessee. Disallowance of foreign exchange fluctuation loss - HELD THAT:- MTM loss recognized at the year-end with reference to unrealized forward contracts was in the nature of real loss and therefore allowable as deduction from the profits of the business. Disallowance of recruitment expenses - HELD THAT:- In the instant case, the assessee did not want to spread over of this expenditure over a period of five years as in the return field by it, it had claimed the entire interest paid upfront as deductible expenditure in the same year. In such a situation, when this course of action was permissible in law to the assessee as it was in consonance with the provisions of the Act which permits the assessee to claim the expenditure in the year in which it was incurred, merely because a different treatment was given in the books of account cannot be a factor which would deprive the assessee from claiming the entire expenditure as a deduction. It has been held repeatedly by this Court that entries in the books of account are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act. Disallowance of delayed contribution of EPF/ESI - HELD THAT:- As the amounts in question have been paid by the assessee before the due date of filing of the return u/s 139(1) of the Act, the ld. CIT(A) rightly followed the decision of the Hon’ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] and deleted the addition. Thus, this ground of the revenue is dismissed. TP Adjustment on account of recharacterisation of equity as loan - HELD THAT:- The term 'income' has to be understood as per the provisions of Section 2(24) of the Act and therefore capital receipts/ transactions will not fall within the ambit of 'income. The Hon'ble Court [2014 (10) TMI 278 - BOMBAY HIGH COURT] thus held that the amount received on issue of share capital including the premium is undoubtedly on capital account. Therefore, absent express legislation, no amount received, accrued or arising on capital account transaction can be subjected to tax as 'income'. The Hon'ble High Court therefore agreed with the assessee's case that capital receipts received by the assessee on issue of equity shares cannot be considered as 'income' and therefore cannot be subject to provisions of Chapter X of the Act. Even though the decision of the Hon'ble Bombay High Court in the context of investment made by foreign holding company in its Indian subsidiary; in my considered view, the ratio decidendi in that decision will equally apply to the appellant's case which is an Indian holding company of its Cyprus subsidiary. Addition to be deleted.
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