9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 1306 - AT - Income TaxContribution to State Renewable Fund - allowable expenditure - Held that - In the earlier year also similar issue arose before the Tribunal and the Tribunal was pleased to delete the disallowance pertaining to assessment year 2007-08 stating that the amount was set apart not for shareholder but it was provided for the benefits of the employees. Addition of prior period expenses - Held that - The ld. CIT (A) has given a finding of fact that with respect to the Head Office an amount of 96, 08, 000/- pertains to reversal of double income booked in F.Y. 2002-03 with respect to maintenance charges. The ld.CIT (A) has given further finding of fact that an amount of 2, 94, 25, 000/- with respect to the Head Office pertains to wrong entry of interest income in FY 2002-03 13, 75, 43, 459/- is required to be apportioned to 80IA units accordingly this will be deducted for the purpose of working out deduction under section 80IA of the Act. Thus the AO reduced the allowable deduction accordingly. However the ld. CIT (A) after considering the submissions of the assessee restricted the disallowance to 6, 98, 93, 301/- against 8, 20, 34, 909/-.The assessee has demonstrated that the authorities below have taken incorrect figure of turnover. Another contention of the assessee is that the amount related to Head Office is already apportioned and therefore there was no need for apportionment of the same. We find merit in the contention of the ld. Counsel for the assessee. Therefore the ground raised in the appeal of the revenue is dismissed. Confirmation of prior period expenses - Held that - The factum of the contention that the amount is not a prior period expenditure requires verification at the end of the AO whether this income was wrongly booked in earlier years is to be verified by making further enquiry. Therefore we set aside the order of ld. CIT (A) and restore the matter to the file of the AO for verifying the contention of the assessee that the amount represents reversal of income. In case the AO finds that it is a reversal of income wrongly booked in earlier years in that event he would delete the disallowance. This ground of the assessee is allowed for statistical purposes. Disallowance of deduction under section 80IA - Held that - Firstly the turnover as taken by the AO and the ld. CIT (A) is incorrect. Secondly the assessee himself has considered the expenditure against the income eligible for deduction under section 80IA. Thirdly the allocation of head office expenditure as done by the lower authorities is not correct. Therefore the authorities below were not justified in disallowing the claim of deduction under section 80IA. We find merit in the contention of the ld. Counsel for the assessee. However the figures are required to be verified from the accounts of the assessee. Therefore the orders of the authorities below are set aside on this issue. The issue of claim of deduction under section 80IA is restored back to the file of the AO to verify the contention of the assessee as made in the written brief. In case the AO finds that the figures as given in the written brief matches with the books of account of the assessee he would accordingly recompute the deduction allowable to the assessee. Needless to say that the AO would give sufficient opportunity to the assessee for furnishing the evidences in support of its claim. These grounds of the assessee are allowed for statistical purposes.
Issues Involved:
1. Allowability of ?10,00,000/- contribution to State Renewable Fund as expenditure. 2. Deletion of addition of ?1,94,34,645/- out of prior period expenses. 3. Restriction of disallowance of deduction under section 80IA to ?6,98,93,301/- against ?8,20,34,909/-. 4. Disallowance of prior period expenses of ?55,28,017/- pertaining to Jodhpur Unit. 5. Allocation of 'payment to and provision for employees' and 'administrative expenses' for determining income from BOT projects for deduction under section 80IA. Detailed Analysis: 1. Allowability of ?10,00,000/- Contribution to State Renewable Fund as Expenditure: The revenue contended that the CIT (A) erred in holding the contribution as allowable expenditure. The Tribunal referenced its earlier decisions in similar cases for previous years, where it was held that the contribution to the State Renewable Fund was allowable. The Tribunal found no reason to deviate from its earlier stance and dismissed the revenue's ground, confirming the CIT (A)'s decision to allow the expenditure. 2. Deletion of Addition of ?1,94,34,645/- Out of Prior Period Expenses: The revenue challenged the deletion of the addition made by the AO for prior period expenses. The Tribunal noted that the CIT (A) had accepted the assessee's explanation that the expenses were reversals of income wrongly booked in earlier years. The CIT (A) provided a detailed analysis, distinguishing between genuine prior period expenses and reversals of earlier income. The Tribunal upheld the CIT (A)'s decision, dismissing the revenue's ground. 3. Restriction of Disallowance of Deduction Under Section 80IA to ?6,98,93,301/- Against ?8,20,34,909/-: The revenue argued that the CIT (A) was incorrect in reducing the disallowance. The Tribunal reviewed the detailed submissions and calculations provided by both the AO and the CIT (A). The CIT (A) had recalculated the turnover and expenses, leading to a revised disallowance. The Tribunal found the CIT (A)'s approach reasonable and dismissed the revenue's ground, affirming the revised disallowance. 4. Disallowance of Prior Period Expenses of ?55,28,017/- Pertaining to Jodhpur Unit: The assessee contended that the CIT (A) erred in not allowing the claim for prior period expenses, which were actually reversals of income wrongly booked in earlier years. The Tribunal acknowledged that the CIT (A) did not provide a detailed explanation for rejecting the assessee's claim. The Tribunal set aside the CIT (A)'s order on this issue and remanded it back to the AO for verification. The AO was instructed to verify if the expenses were indeed reversals of earlier income and, if so, allow the deduction. 5. Allocation of 'Payment to and Provision for Employees' and 'Administrative Expenses' for Determining Income from BOT Projects for Deduction Under Section 80IA: The assessee argued against the allocation of these expenses, stating that the BOT projects were outsourced and did not incur such costs. The Tribunal found merit in the assessee's arguments but noted that the figures needed verification. The Tribunal set aside the orders of the lower authorities on this issue and remanded it back to the AO for verification. The AO was directed to recompute the deduction under section 80IA after verifying the figures provided by the assessee. Conclusion: The Tribunal dismissed the revenue's appeal and allowed the assessee's appeal for statistical purposes, remanding specific issues back to the AO for further verification and recomputation. The Tribunal emphasized the need for accurate verification of figures and proper allocation of expenses in determining the allowable deductions.
|
