2016 (4) TMI 1387 - HC - Income Tax

Allowable business expenditure - share issue expenses incurred or raising capital for purchase of plant and machinery purchase of consumables like diesel oil and coal deduction u/s 80M on the entire dividend income received payments made to Glaxo Sports Club do not fall within the purview of Section 40A(9), Head Office Administrative Expenses and interest cost be not allocated to the Nasik Units for computing the quantum of deduction under Section 80I/80IA for the Nasik Units and disallowances made by him as part of profit of eligible unit on proportionate basis for the purpose of deduction u/s 80IB and 80IB - HELD THAT - This Court dismissed the Revenue s appeal in 2013 (2) TMI 789 - BOMBAY HIGH COURT - The questions raised therein were identical to question arrived herein. No distinguishing features have been shown to us for the subject assessment year from that existing for the A.Y. 199596. In the above view question nos. (1) (2) (5) (6) (7) and (8) do not give rise to any substantial question of law. Thus not entertained. Interest on DPEA liability allowed as expenditure on year to year basis - whether interest liability was neither claimed as deduction in the return of income nor claimed as expenses in its books of account and at the best was treated as liability in the nature of contingent liability which had neither accrued nor arisen? - HELD THAT - Revenue had filed an appeal from the order of the Tribunal for A.Y. 1996-97 on an identical question this Court dismissed the Revenue s appeal. Advance license receivable by the assessee - Whether is to be taxed in the year in which the benefits actually accrue after the imports are effected and not in the year in which the licence is granted to the licencee / assessee? - HELD THAT - Issue raised herein stands concluded against the Revenue by the decision of the Apex Court in Commissioner of Income Tax Vs. Excel Industries Ltd. 2013 (10) TMI 324 - SUPREME COURT . No distinguishing features are urged before us to warrant our taking a different view from that taken in Excel India Ltd. (supra). Disallowances as part of profit of eligible unit on proportionate basis for the purpose of deduction u/s 80IB and 80IB - whether deduction u/s 80IB of the Act cannot be allowed more than what was claimed by the assessee? - HELD THAT - Question arising herein stands concluded against the Revenue the the decision of this Court in Associated Capsules (P) Ltd. Vs. Commissioner of Income Tax 2011 (1) TMI 787 - BOMBAY HIGH COURT . No distinguishing features have been pointed out in respect of the present assessee which would warrant taking a different view

Summary

Issues involved:
1. Capitalization of share issue expenses for purchase of plant and machinery
2. Allowance of entire expenditure on consumables as business expenditure
3. Treatment of interest on DPEA liability as expenditure
4. Taxation of advance license receivable
5. Allowance of deduction u/s 80M on entire dividend income
6. Estimation of expenses attributable to exempt income for deduction u/s 80M
7. Applicability of Section 40A(9) on payments made to Glaxo Sports Club
8. Allocation of Head Office Administrative Expenses and interest cost for deduction under Section 80I/80IA
9. Disallowances made by Assessing Officer for deduction u/s 80IB and 80IB

Analysis:
1. The appeal challenged the Tribunal's order on various issues, including the capitalization of share issue expenses for purchasing plant and machinery. The Counsel for the Revenue acknowledged that previous decisions favored the respondent assessee, leading to the dismissal of this question.
2. Similarly, the Tribunal's decision on allowing the entire expenditure on consumables as business expenditure was upheld based on past judgments in favor of the respondent assessee for the relevant assessment year.
3. The treatment of interest on DPEA liability as expenditure was also settled in favor of the respondent assessee through previous rulings, resulting in the dismissal of this question.
4. The taxation of advance license receivable was determined based on the timing of benefits accrual, aligning with past decisions and leading to the rejection of this question.
5. The allowance of deduction u/s 80M on the entire dividend income received was supported by previous judgments, resulting in the dismissal of this question.
6. The estimation of expenses attributable to exempt income for deduction u/s 80M was addressed based on the common P&L account maintained by the assessee, leading to the rejection of this question.
7. The Tribunal's decision on payments made to Glaxo Sports Club not falling under Section 40A(9) was upheld, resulting in the dismissal of this question.
8. Regarding the allocation of Head Office Administrative Expenses and interest cost for deduction under Section 80I/80IA, the Tribunal's direction to not allocate these expenses to Nasik Units was supported by past decisions, leading to the rejection of this question.
9. The Tribunal's direction to consider disallowances made by the Assessing Officer as part of the profit of the eligible unit for the purpose of deduction u/s 80IB and 80IB was upheld based on previous rulings, resulting in the dismissal of this question. The appeal was ultimately dismissed, acknowledging the efforts made by the Principal Commissioner of Income Tax and the Counsel for the Revenue in presenting relevant information.