2009 (3) TMI 45 - HC - Income Tax

Whether Tribunal was justified in rejecting the claim of the assessee company for weighted deduction u/s 35C on expenses incurred under the head provision of tools and implements for use by farmers, expenses under the head transportation services provided of farmers and depreciation on Distillation assets question is answered in the affirmative and against the assessee

Summary

Issues:
1. Rejection of claim for weighted deduction under section 35C for specific expenses.
2. Applicability of limits for computing disallowance under Rule 6 of the Income-tax Rules, 1961.

Analysis:
1. The first issue pertains to the rejection of the claim for weighted deduction under section 35C by the Appellate Tribunal. The Court addressed three specific expenses: (a) expenses incurred under the head provision of tools and implements for use by farmers, (b) expenses under the head transportation services provided to farmers, and (c) depreciation on Distillation assets. The Court referred to previous judgments involving the same assessee and similar facts. For expenses related to tools and implements, the Court confirmed the rejection of the claim based on previous judgments. Similarly, for transportation services and depreciation on assets, the Court relied on earlier decisions and ruled against the assessee.

2. The second issue involves the applicability of limits for computing disallowance under Rule 6 of the Income-tax Rules, 1961. The Tribunal rejected the claim that limits as of 1.4.81 were applicable throughout the relevant assessment year. The Court referred to a specific judgment in the case of CIT Vs. Aorow India Ltd., reported in 229 ITR 325, where a similar issue was decided in favor of the revenue. The Court, after examining the judgment, concluded that the issue was covered, and therefore, answered the question in the negative and in favor of the assessee. Consequently, the reference was disposed of with no orders as to costs.

This comprehensive analysis of the judgment highlights the specific issues addressed by the Court, the legal interpretations made, and the final decisions rendered based on relevant precedents and legal provisions.