2013 (10) TMI 1581 - AT - Income Tax

Issues Involved:
1. Disallowance of expenditure on telephone at guest house.
2. Disallowance of expenditure on community welfare and rural development.
3. Disallowance of commission paid.
4. Disallowance on account of contribution to Marine Navy Officers Welfare Fund.
5. Claim of deduction u/s. 80HHC and 80HHE.
6. Addition of estimated amount out of conference expenditure as entertainment expenditure.
7. Charging of interest u/s. 234B.
8. Club membership expenses.
9. Deletion of addition on account of unutilized MODVAT credit.
10. Deletion of addition on account of excise duty on finished goods at bonded warehouse.
11. Deletion of addition on account of expenditure on construction of jetty at Gujarat Cement Plant.
12. Deletion of addition on account of unforeseeable losses in computation of work-in-progress on construction account.
13. Deletion of addition on account of expenses on Cement Plants.
14. Deletion of addition on account of interest and commitment charges in respect of borrowings made for Cement Projects.
15. Deletion of addition on account of expenses incurred on setting up of Nasik Glass Works.
16. Deletion of addition on account of interest on commitment charges in respect of borrowings made for Nasik Glass Works.
17. Deletion of addition on account of contribution for laying power line at Kovaya and Tadpatri Cement Plants.
18. Deletion of addition on account of expenditure incurred on mining lease.
19. Deletion of addition on account of expenditure incurred on mining.
20. Claim of deduction u/s. 80M.
21. Deletion of addition on account of salary, administration etc., to earn interest on tax-free bonds.

Summary:

1. Disallowance of expenditure on telephone at guest house:
The Tribunal confirmed the findings of the CIT(A) regarding the disallowance of expenditure on telephone at the guest house amounting to Rs.31,44,435/-, following its own decision in the assessee's case for earlier years. Ground no.1 was dismissed.

2. Disallowance of expenditure on community welfare and rural development:
The Tribunal deleted the additions made on this account, following its earlier orders in the assessee's case. Ground no.2 was allowed.

3. Disallowance of commission paid:
The Tribunal confirmed the findings of the CIT(A) regarding the disallowance of commission paid amounting to Rs.2,40,16,498/-, following its own decision in the assessee's case for earlier years. Ground no.3 was dismissed.

4. Disallowance on account of contribution to Marine Navy Officers Welfare Fund:
The Tribunal directed the Assessing Officer to delete the addition of Rs.6,32,725/-, following its earlier decision in the assessee's case. Ground no.4 was allowed.

5. Claim of deduction u/s. 80HHC and 80HHE:
a) Inclusion of scrap sales and other items of miscellaneous income in the total turnover was allowed.
b) Set off of loss of export of trading goods against profit on export of manufactured goods was dismissed.
c) Computation of indirect cost attributable to trading exports was dismissed as it was not pressed.
Ground nos. 5 & 6 were partly allowed.

6. Addition of estimated amount out of conference expenditure as entertainment expenditure:
The Tribunal directed the Assessing Officer to reduce the disallowance by 50%, providing relief of Rs.12,50,000/-. Ground no.7 was partly allowed.

7. Charging of interest u/s. 234B:
The Tribunal directed the Assessing Officer to charge interest as per law. Ground no.8 was dismissed.

8. Club membership expenses:
The Tribunal confirmed the findings of the CIT(A) regarding the club membership expenses amounting to Rs.69,70,827/-, following its earlier decision in the assessee's case. Ground no.1 was dismissed.

9. Deletion of addition on account of unutilized MODVAT credit:
The Tribunal confirmed the findings of the CIT(A) regarding the deletion of the addition made on account of unutilized MODVAT credit, following its earlier decision in the assessee's case. Ground no.2 was dismissed.

10. Deletion of addition on account of excise duty on finished goods at bonded warehouse:
The Tribunal confirmed the findings of the CIT(A) regarding the deletion of the addition of Rs.7,50,000/-, following its earlier decision in the assessee's case. Ground no.3 was dismissed.

11. Deletion of addition on account of expenditure on construction of jetty at Gujarat Cement Plant:
The Tribunal confirmed the findings of the CIT(A) regarding the deletion of the addition of Rs.9,58,

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