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2015 (12) TMI 1889 - AT - Income TaxNature of expenses - Corporate debt restructuring - replacement of remembraning cells - AO treated both these claims capital expenditure - HELD THAT - Revenue s argument seeking to treat assessee s CDR claim as capital expenditure is rejected. We rely on co-ordinate bench decision in assessment year 2004-05 2013 (11) TMI 773 - ITAT AHMEDABAD and leave it for the AO to calculate this corporate restructuring expenditure as adopted in assessment year 2004-05. Expenditure on replacement of remembraning cells - As assessee has already succeeded before the hon ble jurisdictional high court in its own case 2015 (2) TMI 118 - GUJARAT HIGH COURT rejecting the very substantial question framed in assessment year 1999-2000. There is no exception pointed out before us. We respectfully follow the same and uphold the lower appellate findings under challenge. Revenue s appeal partly accepted for statistical purposes. TDS u/s 192 - Default u/s 201(1) and (1A) - medical reimbursement - non deduction of tds - HELD THAT - The assessee has acted fairly and honestly in computing its TDS liability qua salary and other allowances paid to its employees u/s. 192 - Nor it is the Revenue s case that it has not acted in the above stated bonafide manner or that quantum of medical allowance question appears to be payment of salary in garb thereof. The case file does not reveal that these very sums stand assessed in individual employees hands. Revenue fails in controverting all of the above stated findings. We accordingly reverse lower authorities action and accept assessee s first substantive ground challenging section 201(1) and (1A) demand in question. This first substantive ground relating to medical reimbursement issue succeeds.
Issues Involved:
1. Amortization of lease rental treated as capital expenditure. 2. Disallowance of section 80IA deduction. 3. Addition to book profit for provision for bad and doubtful debts. 4. Corporate debt restructuring treated as capital expenditure. 5. Disallowance for replacement of re-membraning cells. 6. Medical reimbursement and non-deduction of TDS. Detailed Analysis: 1. Amortization of Lease Rental Treated as Capital Expenditure: The assessee challenged the lower appellate order confirming the disallowance of Rs. 11,74,000/- related to the amortization of lease rental, which was treated as capital expenditure instead of revenue. The Tribunal noted that a co-ordinate bench had already adjudicated this issue against the assessee for the assessment year 2004-05. Therefore, following the principle of consistency, the Tribunal decided against the assessee on this ground. 2. Disallowance of Section 80IA Deduction: The assessee contested the disallowance of Rs. 105.52 lacs under section 80IA, arguing that the necessary conditions stipulated therein were fulfilled. The Tribunal observed that another co-ordinate bench had decided this issue in favor of the assessee for the assessment years 2005-06 to 2007-08. Consequently, the Tribunal ruled in favor of the assessee on this ground. 3. Addition to Book Profit for Provision for Bad and Doubtful Debts: The assessee disputed the addition of Rs. 2,13,29,879/- to book profit concerning the provision for bad and doubtful debts. The Tribunal noted that this issue had been adjudicated against the assessee in its own case for the assessment year 2004-05. Therefore, the Tribunal decided against the assessee on this ground. 4. Corporate Debt Restructuring Treated as Capital Expenditure: The Revenue challenged the CIT(A)'s order deleting the addition of Rs. 33,58,000/- on account of corporate debt restructuring, which was treated as capital expenditure. The Tribunal noted that a co-ordinate bench had already decided this issue in favor of the assessee for the assessment year 2004-05, treating it as revenue expenditure. The Tribunal followed this precedent, rejecting the Revenue's argument and directing the Assessing Officer to calculate the corporate restructuring expenditure as adopted in the assessment year 2004-05. 5. Disallowance for Replacement of Re-Membraning Cells: The Revenue also contested the deletion of Rs. 13,53,98,760/- disallowed for the replacement of re-membraning cells. The Tribunal noted that the assessee had already succeeded before the jurisdictional high court in its own case for the assessment year 1999-2000. Following this precedent, the Tribunal upheld the lower appellate findings and rejected the Revenue's appeal on this ground. 6. Medical Reimbursement and Non-Deduction of TDS: The assessee raised issues regarding medical reimbursement, storage charges, and interest of Rs. 1,61,462/-. The primary contention was the non-deduction of TDS on medical reimbursement. The Tribunal noted that the assessee reimbursed medical allowances based on indemnity bonds and declarations from employees. The Assessing Officer treated this as remuneration due to the lack of evidence for actual expenditure. The CIT(A) upheld this view, stating that the medical allowances were taxable and the assessee was required to deduct TDS. However, the Tribunal found that the assessee had acted fairly and honestly in computing its TDS liability and that the Revenue had not proven otherwise. Consequently, the Tribunal reversed the lower authorities' action and accepted the assessee's argument, ruling that the assessee was not in default for non-deduction of TDS on medical reimbursement. Conclusion: - Assessee's appeal ITA 09/Ahd/2012 was partly allowed. - Revenue's appeal ITA 321/Ahd/2012 was partly allowed for statistical purposes. - Assessee's appeals ITA 461/Ahd/2012 and ITA 462/Ahd/2012 were allowed. Order Pronounced in the Open Court on 17-12-2015.
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