2011 (6) TMI 992 - AT - Income Tax

Summary

Issues involved: Appeal against orders of Commissioner of Income Tax (Appeals) for assessment years 2003-04 and 2004-05 u/s 143(3) of the Income-tax Act, 1961.

For assessment year 2003-04:
1. Disallowance of provisions for contract contingencies: Tribunal confirms addition based on previous decision against the assessee, following Accounting Standards.
2. Addition for depreciation on plastic moulds: Tribunal upholds addition based on previous decision against the assessee.
3. Disallowance of contributions to welfare funds: Tribunal remits issue back to Assessing Officer for fresh consideration as per earlier order.
4. Treatment of ERP implementation expenses: Tribunal rules expenses as capital expenditure, denying revenue treatment for training and implementation costs.
5. Add backs for MAT purposes: Tribunal confirms add backs, dismissing the ground raised by the assessee.

For assessment year 2004-05:
1. Contract contingencies and depreciation on plastic moulds: Tribunal decides against the assessee based on previous year's order.
2. Disallowance of contributions to welfare funds: Issue remitted back to Assessing Officer.
3. Deduction of excise duty on closing stock: Tribunal directs Assessing Officer to allow deduction for excise duty paid before the due date.
4. Disallowance of section 80HHC deduction: Issue remitted back for fresh consideration.
5. Adjustment of add backs for MAT: Tribunal rejects the ground raised by the assessee.

In conclusion, both appeals by the assessee are partly allowed for statistical purposes, with specific directions given for each issue.