2013 (2) TMI 883 - HC - Income Tax

Summary

Issues involved:
The judgment involves various issues related to tax assessment for the year 2001-02, including disallowance of inter corporate deposits, repairs to factory building, exclusion of miscellaneous receipts from business profits, commission paid to parties, warranty provision, and stock written off.

Disallowance of Inter Corporate Deposits (ICD):
The Tribunal deleted the disallowance of Rs. 1,00,000 written off by the assessee on account of ICD. The Tribunal's decision was upheld as it was based on a finding of fact and did not raise any question of law.

Repairs to Factory Building:
The assessee spent Rs. 2.72 crores on repairs to the factory building, which was disallowed as capital expenditure by the assessing officer. However, the Tribunal held that the expenditure was for regular repairs and did not result in enduring benefit, thus allowing it as revenue expenditure. This decision was based on a finding of fact and did not raise any question of law.

Exclusion of Miscellaneous Receipts for Deduction u/s.80HHC:
The Tribunal restored the matter to the assessing officer for fresh consideration regarding the exclusion of Miscellaneous Receipts of Rs. 19,97,515 from business profits for computing deduction u/s.80HHC. Therefore, the question did not arise for consideration.

Commission Paid to Various Parties:
The Tribunal deleted the disallowance of Rs. 2,20,84,664 paid as commission to various parties for orders obtained from government agencies. The Tribunal's decision was upheld as it was concluded in a previous case.

Warranty Provision:
The Tribunal allowed the claim of warranty provision even though the assessee failed to make a scientific and reliable estimate of the liability. This issue was covered by a previous decision and did not arise for consideration.

Stock Written Off:
The controversy was regarding the writing off of closing stock amounting to Rs. 2.17 crores. The Tribunal found that the assessee's policy of identifying and making provisions for obsolete stock was consistent and accepted by the department in earlier assessment years. As there were no distinguishable circumstances in the current assessment year, the disallowance was not justified. Therefore, the question did not need to be entertained.

The appeal was dismissed with no order as to costs.