2010 (11) TMI 953 - AT - Income Tax

Summary

Issues Involved:
1. Consideration of revised return.
2. Disallowance u/s 43B.
3. Deduction for scientific research expenditure.
4. Premium paid on leasehold land as revenue expenditure.
5. Expenditure on right of way as revenue expenditure.
6. Deduction u/s 80IB for AU-V Gujarat refinery.
7. Deduction u/s 80IB for marketing division of GHP unit.
8. Exclusion of provisions for doubtful debts and investments while computing book profit u/s 115JB.
9. Carry forward of capital losses.
10. Deduction u/s 80HHC for export of ATF and petroleum products.
11. Disallowance of prior period expenses.
12. Disallowance of exchange loss on foreign currency loan.
13. Levy of interest u/s 234D.

Summary:

1. Consideration of Revised Return:
The Ld. CIT(A) erred in not specifically directing the Additional Commissioner to consider the revised return filed by the assessee on March 31, 2004. This ground was dismissed due to lack of approval from the Committee on Dispute (COD).

2. Disallowance u/s 43B:
The Ld. CIT(A) confirmed the disallowance of Rs. 1,24,28,956 u/s 43B for sales tax collected but not paid by the due date. This ground was dismissed as it was not permitted by COD.

3. Deduction for Scientific Research Expenditure:
The Ld. CIT(A) did not direct the Additional Commissioner to allow deduction of Rs. 14,79,82,217 for expenditure on capital work-in-progress capitalized during the year. This ground was dismissed due to lack of COD approval.

4. Premium Paid on Leasehold Land:
The Ld. CIT(A) did not direct the Additional Commissioner to allow deduction of Rs. 9,16,30,000 as revenue expenditure. This ground was dismissed as it was not permitted by COD.

5. Expenditure on Right of Way:
The Ld. CIT(A) did not direct the Additional Commissioner to allow deduction of Rs. 2,29,98,000 as revenue expenditure. This ground was dismissed due to lack of COD approval.

6. Deduction u/s 80IB for AU-V Gujarat Refinery:
The Ld. CIT(A) did not specifically direct the Additional Commissioner to allow deduction of Rs. 5,70,91,700 u/s 80IB. This ground was dismissed as it was not permitted by COD.

7. Deduction u/s 80IB for Marketing Division of GHP Unit:
The Ld. CIT(A) did not specifically direct the Additional Commissioner to allow deduction of Rs. 68,71,26,000 u/s 80IB. This ground was dismissed due to lack of COD approval.

8. Exclusion of Provisions for Doubtful Debts and Investments u/s 115JB:
The Ld. CIT(A) did not direct the Additional Commissioner to exclude Rs. 14,85,00,000 for doubtful debts and Rs. 2,00,00,00,000 for investments while computing book profit u/s 115JB. This ground was dismissed as it was not permitted by COD.

9. Carry Forward of Capital Losses:
The Ld. CIT(A) did not specifically direct the Additional Commissioner to allow the carry forward of capital losses for set-off in subsequent years. This ground was dismissed due to lack of COD approval.

10. Deduction u/s 80HHC for Export of ATF and Petroleum Products:
The Ld. CIT(A) erred in confirming the disallowance of Rs. 3,94,01,265 u/s 80HHC for exports. The Tribunal followed earlier decisions against the assessee, holding that sales of ATF and bunker oil to foreign airlines and ships are not exports and fall under the prohibitory ambit of Sec. 80HHC(2)(b).

11. Disallowance of Prior Period Expenses:
The Ld. CIT(A) confirmed the disallowance of various prior period expenses. The Tribunal set aside the issue to the AO to consider item-wise whether the liability crystallized during the year, following the principles laid down in various judicial decisions.

12. Disallowance of Exchange Loss on Foreign Currency Loan:
The Ld. CIT(A) confirmed the disallowance of Rs. 29,00,000 for exchange loss on foreign currency loan. The Tribunal remanded the matter to the AO to decide in light of the Supreme Court decision in CIT Vs Woodward Governor India P. Ltd.

13. Levy of Interest u/s 234D:
The Ld. CIT(A) confirmed the levy of interest u/s 234D. The Tribunal allowed the assessee's ground, following the Bombay High