9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 1662 - AT - Income TaxDisallowance under Peripheral Development Expenses - allowable deduction u/s.37 - AO observed that the peripheral development claimed by the assessee are not incurred wholly and exclusively incurred for the business purpose - HELD THAT - The expenditure claimed by the assessee has been incurred wholly and exclusively for business purposes as envisaged by the assessee however the AO has to verify the claim as to whether the peripheral expenditure in the corporate office is for the particular area of the employees or as a whole. Accordingly we respectfully following judicial precedence and the order of the Tribunal and we restore this issue to the file of AO to verify the nature of expenditure incurred on the peripheral areas and decide the same on merits. This ground of appeal is allowed for statistical purposes. Disallowance of interest on disputed Govt. duty (Electricity duty and water charges) - HELD THAT - As decided in own case 2012 (12) TMI 632 - ITAT CUTTACK direct the AO to allow the claim of the assessee on account of interest on disputed Govt. duty (Electricity duty and water charges) and this ground of assessee is allowed Disallowance of additional depreciation u/s.32(1)(iia) - HELD THAT - We find the issue is similar to the . 2018 (4) TMI 1754 - ITAT CUTTACK present facts and circumstances of the case and we respectfully follow the above judicial precedence of this bench of the Tribunal and remit the matter to the file of AO for reconsideration of claim of additional depreciation u/s.32(1)(iia) of the Act. Accordingly we allow this ground of assessee for statistical purposes. Disallowance u/s.14A - HELD THAT - In various decisions we find that the Tribunal has restored the disputed issue to the file of AO for re-examination and reverification and apply the provisions of Section 14A r.w.rule 8D and in the instant case the issue being similar we find that the AO has not complied with the mandatory requirement of Section 14A (2) of the Act read with Rule 8D (1) (a) of the Rules and we respectfully follow the above judicial decision of the Tribunal and remit the disputed issue to the file of AO for re-examination and verification and to decide the issue on merits after complying the mandatory requirement of the provisions of Section 14A of the Act and this ground of appeal is allowed for statistical purposes. Treatment of short term and long term capital gain - AO has treated the short-term and long-term capital gain earned by the assessee as business income of the assessee - HELD THAT - We agree with the ratio of judicial decision applicability to the present case and we direct the AO to treat the income under the capital gains and not as business income and allow this ground of appeal of the assessee. Non-deduction of credit amount under provision for leave encashment disallowed in the past assessment years u/s.43B(f) - AO made disallowance on account of provision for leave encashment u/s 43B(f) of the Act on the ground that the same is allowable only if the said expenditure has actually been paid by the assessee - HELD THAT - As relying on its earlier order has restored the disputed issue to the file of AO
Issues Involved:
1. Disallowance under "Peripheral Development Expenses" 2. Disallowance of Interest on disputed Govt. duty (Electricity Duty and water charges) 3. Disallowance of claim of Additional Depreciation u/s.32(i)(iia) of the Act 4. Disallowance u/s. 14A 5. Treatment of Short-term Capital Gains and Long-term Capital Gains as "Income from Business" 6. Non-deduction of credit amount under Provision for Leave Encashment disallowed in past assessment years u/s.43B(f) of the Act 7. Disallowance of the loss on account of revaluation of non-moving stores and spares Detailed Analysis: 1. Disallowance under "Peripheral Development Expenses" The assessee claimed peripheral development expenses of ?22,32,20,569/-, which the AO disallowed, stating they were not incurred wholly and exclusively for business purposes. The CIT(A) restricted the disallowance to ?1,81,73,621/-. The Tribunal found that similar expenses were allowed in previous years and remitted the issue back to the AO to verify the nature of the expenditure and decide on merits. 2. Disallowance of Interest on disputed Govt. duty (Electricity Duty and water charges) The AO disallowed ?168,47,54,889/- debited by the assessee for interest on disputed government dues, stating the matter was pending before higher authorities. The CIT(A) confirmed this. The Tribunal, referencing earlier decisions in the assessee's favor, directed the AO to allow the claim, noting that the interest liability is statutory and charged on an accrual basis. 3. Disallowance of claim of Additional Depreciation u/s.32(i)(iia) of the Act The AO disallowed additional depreciation of ?30,93,207/- due to the absence of acquisition dates for individual machinery parts. The CIT(A) confirmed this. The Tribunal, following earlier decisions, remitted the matter to the AO for reconsideration, directing verification of the acquisition and installation dates. 4. Disallowance u/s. 14A The AO applied Rule 8D to disallow ?5,19,29,172/- under Section 14A, stating the assessee's suo-moto disallowance was insufficient. The CIT(A) confirmed this. The Tribunal found the AO did not comply with the mandatory requirement of recording dissatisfaction with the assessee's claim and remitted the issue back to the AO for re-examination and verification. 5. Treatment of Short-term Capital Gains and Long-term Capital Gains as "Income from Business" The AO treated the assessee's capital gains as business income, which the CIT(A) affirmed. The Tribunal, referencing a similar issue in the assessee's favor in earlier years, directed the AO to treat the income as capital gains, noting the investments were held for earning income, not trading. 6. Non-deduction of credit amount under Provision for Leave Encashment disallowed in past assessment years u/s.43B(f) of the Act The AO disallowed the provision for leave encashment, which the CIT(A) confirmed. The Tribunal, following earlier decisions, remitted the issue back to the AO to examine and allow the claim. 7. Disallowance of the loss on account of revaluation of non-moving stores and spares The CIT(A) deleted the AO's disallowance of ?8,68,70,728/- for the loss on revaluation of non-moving stores and spares. The Tribunal, referencing earlier decisions in the assessee's favor, dismissed the Revenue's appeal on this ground. Conclusion: The Tribunal partly allowed the assessee's appeal for statistical purposes, remitting several issues back to the AO for re-examination and verification. The Revenue's appeal was dismissed, and the assessee's cross-objection was deemed infructuous.
|
