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Issues involved: Cross appeals regarding time-barred appeal, deduction of product development expenses, Modvat credit, depreciation u/s.32, expenses on plastic pallets, provision for advertisement expenses.
Time-barred appeal: The assessee's appeal was time-barred by six days, but it was contended that the appeal was submitted in time as per the receipt date of the CIT(A)'s order. The delay was condoned, and the appeal was admitted for hearing. Deduction of product development expenses: The assessee claimed deduction for product development expenses related to introducing new cereal varieties. The Assessing Officer treated the expenditure as capital in nature, but the CIT(A) directed to delete this addition. The Tribunal upheld the CIT(A)'s decision based on precedent. Modvat credit: The Assessing Officer included unutilized Modvat credit in the value of closing stock without adjusting other figures. The Tribunal set aside the order, directing the AO to decide afresh in accordance with relevant judgments and section 145A. Depreciation u/s.32: The Tribunal upheld the denial of depreciation u/s.32 based on a previous decision against the assessee in a prior assessment year. Expenses on plastic pallets: The Tribunal allowed deduction for expenses on plastic pallets under section 37(1) as it was not considered as repairs and maintenance but as otherwise deductible. The Tribunal directed to disallow any depreciation allowed on treating the amount as capital expenditure. Provision for advertisement expenses: The Tribunal granted deduction for expenses payable to M/s.Group M Media India Private Limited as invoices were raised before the end of the year. For expenses payable to HTA, additional evidence was filed, and the matter was restored to the AO for fresh consideration under the mercantile system of accounting. In conclusion, the Revenue's appeal was dismissed, and the assessee's appeal was partly allowed, with the order pronounced on May 20, 2011.
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