2019 (3) TMI 202 - AT - Income Tax

Addition of freight inward/import clearing expenses to cost of closing inventory - HELD THAT - If valuation of closing stock is changed then the value of opening stock should also be changed on the same basis or method. The closing stock of a particular year is the opening stock of the subsequent year. It is not the case of the revenue that the method of valuation of closing stock is materially affecting the accounts and profits disclosed by the assessee. This adjustment sought to be made is revenue neutral and at best may result in preponment or postponement of revenue. The issue is whether such exercise is at all required on the ground of materiality. Materiality is a concept which is well recognized both in accountancy and law. Accounting standards notified by the CBDT u/s 145(2) mandate that the concept of materiality be taken into consideration when finalizing the accounts of an assessee. Addition on account of cost of rejection of semi-finished goods and obsolete items to the value of closing stock - aforesaid rejections comprised of abnormal rejections arising in the course of manufacturing, like rejections on account of obsolescence, etc. - HELD THAT - It is not practically possible for the assessee to segregate normal and abnormal wastages embedded in the aforesaid costs and therefore, the assessee, as per consistent and regular method of accounting, accepted by the Revenue as such in the earlier years, did not consider the aforesaid expenditure for the purposes of valuation of closing inventory of finished goods. The AO/DRP was not correct in making this addition. Disallowance of provision for increase in price of material - AO held that provisions emanating from retrospective price amendments are contingent in nature and thus, not an allowable business expenditure - HELD THAT - While price revisions are pending or negotiations are on, the vendors keep on supplying the material provisionally at the agreed rates, with the understanding that pursuant to negotiations being finalized, the arrears of the amount due to them would be paid to them retrospectively. Such price revisions, being an accrued liability at the time of purchase of raw materials, are recorded in the books of accounts by the assessee. At the year end, the company estimates the additional liability on account of price revision under negotiation and makes upward/downward provision, as the case may be, in relation to material supplied until the end of the relevant year. Thus, the Assessing Officer was incorrect in disallowing this claim Disallowance of cost of scrap material - as seen that in the course of the business of manufacturing, the process generates some scrap on account of rejection of components, obsolescence of components, etc. - HELD THAT - Assessee is not dealing in scrap, and/or holding the scrap as inventory, and thus was not required to value the closing stock after taking into account the value of scrap. The Tribunal for A.Y. 2010-11 and 2011-12 while coming to the aforesaid conclusion, laid emphasis on the fact that such transaction was revenue-neutral and held that considering the size of the assessee company, it could not be expected to keep quantitative tally of miniscule items. The facts are identical in the presnt year as well. Disallowance of prior period expenses - HELD THAT - Assessee is a large sized manufacturing company which receives services from several vendors, running into hundreds. The assessee made reasonable attempt to quantify the liability incurred towards expenses during the relevant previous years and provide for it which was not doubted by the Assessing Officer. It is not practically possible to consider and provide for all expenses, in absence of relevant details/material/information for various reasons like, non-receipt of bills/invoices from the vendors, the contract terms with vendors not being settled, disputes in relation to bills received, services contracted by zonal/regional/branch officer not intimated to the head office, etc. Therefore, the assessee in our opinion has rightly claimed deduction for miscellaneous expenses aggregating pertaining to prior period Provision of Head office expense reversed in succeeding year - at the end of year, the assessee made provision for various expenses incurred during the year on the basis of reasonable estimate, since in the absence of receipt of bills/invoices from the vendors, which are received in the succeeding year, the exact amount payable there against was not ascertainable - HELD THAT - In the present Assessment Year also, the provision for advertisement expenses, has been made on the basis of actual Purchase orders and agreements and thus, has been made on reasonable and scientific basis. Detail of provisions for advertisement was submitted before the lower authorities. Further, AO in the set-aside proceedings for A.Y. 2008-09, vide order dated 26.02.2015, accepted the claim of the assessee and allowed relief on the aforementioned identical issue by observing that the assessee had computed the provision on the basis of actual Purchase Orders, which was scientific and logical in nature. Thus the issue is squarely covered by the order of the Tribunal in A.Ys. 2010-11 & 2011-12. Disallowance of alleged excessive purchases from related parties as per AS-18 - parties were not related to the assessee company in terms of section 40A (2), disallowance on ground of excessive purchase price could not have been made under that section - HELD THAT - The purchase prices of components which are purchased from various suppliers are based upon negotiations with such vendors and are different due to various factors. The assessee also prefers purchasing material from certain suppliers, due to business/commercial expediency. The said parties are not related to assessee, in terms of the provisions of section 40A(2)(b). During the relevant previous year, the assessee made total purchases of various raw materials, etc.. Out of the aforesaid total purchases, purchases from related parties, i.e., parties related to the assessee, in accordance with definition given in AS-18 issued by the ICAI and as disclosed in the notes to accounts of the audited accounts of the relevant previous year, but admittedly not related in terms of definition provided in section 40A (2) Deemed dividend addition u/s 2(22)(e) - HELD THAT - It is pertinent to note that when payments by dealers to HFCL are due to the dealers, due to convenience of facility of collection centers of the assessee available all over India, make payment into the assessee s bank account, for and on behalf of HFCL, which is in turn remitted by the assessee to HFCL in 2- 3 days. Thus, the assessee is mere custodian of the said amount. Thus, Section 2(22)(e) will not be applicable in the present case. Disallowance of payments made for advisory services availed from Hero Corporate Services Ltd. (HSCL)- HELD THAT - Assessee made elaborate submissions explaining the nature of services received from Hero Corporate Services Ltd. and nexus of same with the business of the assessee. This fact is identical with the earlier Assessment Years. The issue is squarely covered in favour of the assessee by the Tribunal s order for A.Ys. 2010-11 & 2011-12. Besides this the Revenue has accepted this issue and has not challenged the same in Hon ble High Court. Thus, this issue attains finality. TDS on quarterly target and turnover discount and Sales Discount - expenditure towards the quarterly target on turnover discount on trade discount - HELD THAT - Issue in favour of the assessee relying on the decision of Hon ble Delhi High Court in the case of CIT vs. Mother Dairy Ltd. (2012 (2) TMI 80 - DELHI HIGH COURT) and Jai Drinks Pvt. Ltd. 2011 (1) TMI 1035 - DELHI HIGH COURT , holding that the discount in question is not in the nature of commission but an incentive for higher sale targets. TDS u/s 194J - TDS on legal and professional charges - AO disallowed the aforesaid expenses, invoking section 40(a)(ia), for the failure of the assessee to deduct tax at source there from - HELD THAT - In the present Assessment Year, the Assessing Officer disallowed the aforesaid expenses, invoking section 40(a)(ia), for the failure of the assessee to deduct tax at source there from under section 194J of the Act. But it is pertinent to note here that the Assessing Officer did not doubt that the payment was made by assessee towards reimbursement of expenses, it was still held that assessee was liable to deduct tax at source under section 194J of the Act. Thus, the issue is squarely covered by the order of the Tribunal for A.Ys. 2010-11 and 2011-12. Disallowance of Royalty Expenditure/TGF and model fee - Addition on the ground of being capital in nature it can be seen that the assessee company has been manufacturing two wheelers in India since 1985 on the basis of technology provided by M/s. Honda Motors Co. Ltd., Japan ( HM ) and has thus far launched various models of motorcycles by obtaining the technology provided by that company. - HELD THAT - No proprietary rights in the know how vested in the assessee, the assessee being a mere licensee with limited rights to use the technical assistance during the currency of the agreement, there is no explicit or implied intention to transfer or create ownership in the technical know-how /technical information in the assessee. Expenditure by way of royalty, technical guidance fee and model fees incurred by the assessee was allowable revenue deduction as held in the decision given by the Tribunal for A.Ys. 2010-11 and 2011-12. Gains from sale of investments income treated as business income - AO held that, having regard to the magnitude/volume of total turnover from sale of investments, the aforesaid income was taxable under the head business income - HELD THAT - It is pertinent to note that the assessee invested surplus funds arising in the course of business under various modes of investment like mutual funds/PMS, shares, etc. The gains realized from sale of such various instruments, amounting during the relevant previous year, were disclosed under the head capital gains. The issue is identical in the AY 2010- 11 and 2011-12 wherein the Tribunal allowed this issue in favour of the assessee. Addition u/s 14A - HELD THAT - Assessing Officer did not accept the method of disallowance computed by the assessee under section 14A and made further disallowance invoking provisions of Rule 8D of the Income Tax Rules, 1962 after reducing the suo moto disallowance of ₹ 65.23 lakhs made by the assessee in the return of income. But the Assessing Officer has not given the proper calculation to that effect. Therefore, the matter is restored back to the file of the Assessing Officer. Depreciation on Model Fee - AS seen that the assessee manufactures two-wheelers under technical collaboration agreement entered into with Honda Motor Co. Ltd., Japan ( Honda ) - HELD THAT - The facts of the present Assessment Year and the earlier Assessment Year are not different. In the present year also the expenditure was incurred on new model fees prior to commencement of production of new models of two wheelers, thus, this action is revenue neutral in a broader perspective as the same adjustment would be required to be made to the opening stock of finished goods for the year under consideration. Thus, this issue is covered by the decision of the Tribunal for A.Ys. 2010-11 and 2011-12. Disallowance of reimbursement of foreign travelling expenses to directors/employees - amount on the ground of no evidence/proof of actual expense incurred by employees of ₹ 451.00 crores - HELD THAT - It is pertinent to note that for payment of per diem allowance, as per policy, the assessee does not require the expenses to be necessarily supported / backed by bills considering the practical difficulties/impossibilities in producing invoices for petty expenses like local conveyance, telephone bills, etc. The employees are only required to submit details of expenditure incurred in specified form, on basis of which travel bill is settled. The Tribunal in A.Ys. 2010-11 and 2011-12 and earlier years held that disallowance cannot be made merely on the basis that vouchers were not produced by the employees, Thus, the facts have not changed in this year as well, therefore, the issue is squarely covered by the decision of the Tribunal for earlier Assessment Years. Expenses incurred on advertisement on death anniversary of Late Shri Raman Munjal - AO disallowed aforesaid expenditure claimed by assessee on the ground that same was personal expenditure being related to promoters family and was not incurred for the purpose of business - HELD THAT - The aforesaid disallowance made by the Assessing Officer in the preceding years, viz. Assessment Year 2010-11 and 2011-12 has been deleted by the Tribunal vide consolidated order dated 24.10.2016, wherein the Tribunal held that such expenditure incurred by the assessee on death anniversary of Sh. Raman Kant Munjal was not personal expenditure of the promoter family and satisfied the tests of commercial and business expediency and thus was an allowable business deduction under Section 37(1) of the act. It is also pertinent to mention that no appeal has been filed by the department before the High Court. Thus, the Tribunal decision has attained the finality. Disallowance of commission paid to Managing Director, Shri Pawan Munjal under Section 36(1)(ii) - AO disallowed the aforesaid total amount of commission paid to Shri Pawan Munjal u/s 36(1)(ii) on the ground that commission was paid in lieu of distribution of dividend to him. who was also shareholder of the assessee company - HELD THAT - Disallowance made by the assessing officer in the preceding years, viz. AY 2010-11 and AY 2011-12 has been deleted by the Tribunal vide recent consolidated order dated 24.10.2016. In the said order, the Tribunal held that the commission paid to directors with reference to percentage of profits of the company for the services rendered as per the terms of appointment, constitutes part of the remuneration package, and in the absence of any disallowance on other components of remuneration paid to such director, the commission cannot, ipso facto be classified as payment of profit/dividend covered within the exception provided under Section 36(1)(ii) of the Act. It is also pertinent to mention that no appeal has been filed by the department before the High Court. Disallowance of proportionate amount of premium paid for land taken on lease for 99 years - eligibility of depreciation - AO has held that the impugned payment has resulted in the enduring benefit to the assessee in the capital field, since the assessee had taken the land on lease over a long period of 90 years and such land was to be used for construction of factory building thereon - HELD THAT - DRP, allowed the assessee depreciation on the premium paid for acquiring of leasehold rights of land, considering the same as an intangible asset in the nature of business or commercial right which is eligible for depreciation under Section 32(1)(ii) of the Act. This direction was not at all considered by the Assessing Officer. Therefore, we direct the Assessing Officer take into account the direction of the DRP and pass necessary order after giving hearing to the assessee by following principles of natural justice. Therefore, we remand back this issue to the file of the Assessing Officer. CSR expenditure - allowable business expenditure - AO disallowed the aforesaid expenses on the ground that it was not incurred wholly and exclusively for the purposes of earning business income from the activity of manufacture and sale of two-wheelers - HELD THAT - Tribunal held that the expenditure incurred by the assessee company on Corporate Social Responsibility, prior to insertion of explanation 2 to Section 37(1) of the Act, was an allowable business deduction under the said provision. The Tribunal, in the said order, further elaborated that the role of the assessee was not restricted to merely earning profit, but also discharging certain community related expenses, which would be considered to have been incurred on account of commercial/ business expediency. It is pertinent to point out that no appeal has been filed by the Department in assessment year 2011-12. Thus, the decision of the Tribunal attains finality. Disallowance u/s 80IC on account of cost to cost sale to Vendor i.e. trading activity as well as disallowance u/s 80IC on account of Job work/outsourcing of manufacturing activity - proportionate amount of sales to vendors for processing of semi-finished goods supplied by the assessee, compute on ad-hoc basis, on the ground that manufacturing activity to the aforesaid extent of sales was outsourced - HELD THAT - Tribunal while adjudicating upon the issue of disallowance u/s 80IC on account of job work/ outsourcing of manufacturing activity in the immediately preceding assessment years, i.e. AY 2010-11 and AY 2011-12, held that outsourcing of certain intermediary processes or procurement of finished components in the process of manufacture does not tantamount to outsourcing of manufacturing activities and thus would not hamper the claim of deduction of the assessee company under Section 80 IC of the Act. It is also pertinent to mention that no appeal has been filed by the Department before the Hon ble Delhi High Court. These fact are identical with the present Assessment Years. The issue is squarely covered in favour of the assessee by the Tribunal s order for A.Ys. 2010-11 & 2011-12. Disallowance u/s 80IC on account of violation with respect to inter unit transfer as per Form No. 10CCB - HELD THAT - The claim of deduction of the appellant is also duly supported with the audit report in Form 10CCB issued by the auditors, answering each question in the format and how the appellant satisfied all such conditions. In the final assessment order, the assessing officer has not pointed out violation of any such condition precedent. We agree with the submissions of the Ld. Counsel that the various errors (assuming without admitting) in submission of complete details/information by the appellant to the assessing officer, as noted in the assessment order, related to the computation of deduction, on the basis of which entire claim could not have been denied. Accordingly, in our view, the assessing officer was not justified in denying the benefit of deduction u/s 80IC Disallowance u/s 80IC on account of section 80IA(10) - AO disallowed deduction u/s 80-IC by an amount holding that for the purpose of computing deduction under the latter section, inter-unit transfer of goods should have been recorded at market price, instead of cost price as carried out by the assessee - HELD THAT - Tribunal in the immediately preceding assessment years, i.e. AY 2010-11 and AY 2011-12 wherein identical disallowance made by the AO has been deleted. The Tribunal, while allowing the claim of the assessee under section 80-IC held that for the purpose of computing market price of inter-unit transfer of goods, when the non-eligible units procured goods at market price from third party vendors and supplied the same to the eligible unit at the same purchase price as increased by the applicable freight cost, no further substitution of such price is warranted in terms of section 80IA(10) of the Act and the transaction was a genuine business transaction borne out of commercial expediency. Disallowance u/s 80IC on account of profit attributable to the brand value and marketing network - AO held that profits are derived by the assessee-company on account of three assets, viz., (1) manufacturing assets, (2) brand assets and (3) marketing assets whereas deduction under section 80IC is available only on profits derived from business of manufacturing of specified articles or things - HELD THAT - The issue is squarely covered in favor of the assessee by the order passed by the Tribunal for immediately preceding assessment years, i.e. AY 2010-11 and AY 2011 -12, 2017 (1) TMI 266 - ITAT DELHI wherein identical disallowance made by the AO has been deleted. The Tribunal, in coming to the aforesaid discussion, reiterated that the head office is not a separate profit centre and, therefore, no profit is to be separately attributed to such activity. It further observed that, for the purpose of working out eligible deduction under section 80-IC of the Act, actual expenses incurred at the head office are to be allocated between various profit centers on a rational and scientific basis. Disallowance u/s 80IC on account of other income - Such incomes were not derived from the business of manufacture of specified articles or things - Held that - Tribunal in immediately preceding assessment years, i.e. AY 2010-11 and AY 2011-12 2017 (1) TMI 266 - ITAT DELHI after examining the nature of the aforesaid incomes, held that other incomes in the nature of Interest on loan to employees, interest on loan to vendors for working capital support, freight recovery, sundry sales, cash discounting from vendors and exchange fluctuation gain, etc. earned by a unit eligible for deduction u/s 80IC of the Act shall be considered as incidental to the activity of carrying out manufacturing and thus eligible for deduction under that section. Nature of expenditure - repairs and maintenance expenditure of various assets - revenue or capital expenditure - AO disallowed aforesaid expenditure after allowing depreciation thereon @ 10% on the ground that the same was not in the nature of current repairs but is capital in nature - HELD THAT - We delete the disallowance made by the and assessing officer respectfully following the decision of the coordinate bench in assessee s own case for earlier years and consequent order of the Ld. and AO after examining the complete details in the result, we direct the Ld. and assessing officer to delete the disallowance made by holding that expenditure incurred as allowable repairs and maintenance expenditure on the existing assets of the company and is revenue in nature. Benefit of deduction u/s 80IC - non compliance of Rule 18BBB and non-adherence to condition specified in Industrial Policy - HELD THAT - Appellant during the course of set-aside proceedings had point-wise given entire details /information as to how it satisfied each condition precedent for claiming deduction under said section. The claim of deduction of the appellant is also duly supported with the audit report in Form 10CCB issued by the auditors, answering each question in the format and how the appellant satisfied all such conditions. In the final assessment order, the assessing officer has not pointed out violation of any such condition precedent. We agree with the submissions that the various errors (assuming without admitting) in submission of complete details/information by the appellant to the assessing officer, as noted in the assessment order, related to the computation of deduction, on the basis of which entire claim could not have been denied. TDS u/s 194C OR 194J - TDS at lower rate or wrong provision - payment made for event organization - assessee had incurred expenditure on account of display of hoardings for advertisements and arrangement of various events for publicity - disallowance u/s 40(a)(ia) - HELD THAT - Assessee had incurred expenditure on account of display of hoardings for advertisements and arrangement of various events for publicity. All arrangements for this event were done by M/s G2 RAMS India Pvt. Ltd. The said company was entrusted with the overall responsibility for organizing the event. The contract entered into with the said company was a composite contract for organizing an event, involving various arrangements for carrying out work of organizing the event. In view of the above, tax was deducted at source u/s 194C of the Act before remitting the payment under that Section. Thus, the facts are identical to that of the A.Ys. 2010-11 and 2011-12 and therefore, the order of the Tribunal is applicable in the present case.

Summary

Issues Involved:
1. Addition of freight inward/import clearing expenses to cost of closing inventory.
2. Addition on account of cost of rejection of semi-finished goods and obsolete items.
3. Disallowance of provision for increase in price of material.
4. Disallowance of cost of scrap material.
5. Disallowance of prior period expenses.
6. Disallowance of provision for Head office expense reversed in succeeding year.
7. Disallowance of excessive purchases from related parties.
8. Payment received on behalf of Hero Honda FinCorp. Ltd. (HFCL) deemed as dividend.
9. Disallowance of payments made for advisory services availed from Hero Corporate Services Ltd. (HSCL).
10. TDS on quarterly target and turnover discount and sales discount.
11. TDS on legal and professional charges.
12. Disallowance of Royalty Expenditure/TGF and model fee.
13. Gains from sale of investments income treated as business income.
14. Disallowance under Section 14A as per Rule 8D.
15. Depreciation on Model Fee.
16. Disallowance of reimbursement of foreign travelling expenses to directors/employees.
17. Expenses incurred on advertisement on death anniversary of Late Shri Raman Munjal.
18. Disallowance of commission paid to Managing Director under Section 36(1)(ii).
19. Disallowance of proportionate amount of premium paid for land taken on lease.
20. Disallowance of expenses incurred on account of ‘Corporate Social Responsibility’ (CSR).
21. Disallowance u/s 80IC on account of cost to cost sale to Vendor.
22. Disallowance u/s 80IC on account of Job work/outsourcing of manufacturing activity.
23. Disallowance u/s 80IC on account of violation with respect to inter unit transfer.
24. Disallowance u/s 80IC on account of other income.
25. Disallowance of expenses incurred on repair and maintenance of various assets alleging to be capital expenditure.
26. TDS at lower rate or wrong provision (payment made to M/s. G2 RAMS India Pvt. Ltd. for event organization).

Detailed Analysis:

1. Addition of Freight Inward/Import Clearing Expenses to Cost of Closing Inventory:
The Tribunal held that the consistent method of accounting followed by the assessee, which was accepted by the Revenue in the past, should not be disturbed. The freight inward and clearing charges were not included in the valuation of closing stock as they were immediately consumed. The addition of ?3,17,000 was deleted.

2. Addition on Account of Cost of Rejection of Semi-Finished Goods and Obsolete Items:
The Tribunal observed that the assessee consistently excluded abnormal wastages from the valuation of inventory, in line with Accounting Standard 2. The addition of ?2,83,000 was deleted.

3. Disallowance of Provision for Increase in Price of Material:
The Tribunal noted that the provision was made on a scientific basis and the transaction was revenue neutral. The disallowance of ?45.66 crores was deleted.

4. Disallowance of Cost of Scrap Material:
The Tribunal held that the assessee was not dealing in scrap and was not required to value the closing stock of scrap. The addition of ?6.34 lakhs was deleted.

5. Disallowance of Prior Period Expenses:
The Tribunal noted that the expenses were genuine and the assessee had made reasonable attempts to quantify the liability. The disallowance of ?17.13 crores was deleted.

6. Disallowance of Provision for Head Office Expense Reversed in Succeeding Year:
The Tribunal held that the provision was made on a reasonable and scientific basis. The disallowance of ?16.26 crores was deleted.

7. Disallowance of Excessive Purchases from Related Parties:
The Tribunal observed that the parties were not related under section 40A(2) and the transactions were commercially expedient. The disallowance of ?38.36 crores was deleted.

8. Payment Received on Behalf of Hero Honda FinCorp. Ltd. (HFCL) Deemed as Dividend:
The Tribunal held that the assessee was merely a custodian of the amount received from dealers on behalf of HFCL. The addition of ?12.69 crores was deleted.

9. Disallowance of Payments Made for Advisory Services Availed from Hero Corporate Services Ltd. (HSCL):
The Tribunal noted that the services were rendered and the expenditure was justified. The disallowance of ?2 crores was deleted.

10. TDS on Quarterly Target and Turnover Discount and Sales Discount:
The Tribunal held that the discounts were not in the nature of commission and were not subject to TDS under section 194H. The disallowance of ?63.51 crores was deleted.

11. TDS on Legal and Professional Charges:
The Tribunal held that the reimbursement of expenses did not have any element of income and was not subject to TDS. The disallowance of ?3.81 lakhs was deleted.

12. Disallowance of Royalty Expenditure/TGF and Model Fee:
The Tribunal held that the payments were for the use of technical know-how and did not result in the acquisition of any capital asset. The disallowance of ?53.35 crores was deleted.

13. Gains from Sale of Investments Income Treated as Business Income:
The Tribunal held that the gains from the sale of investments were taxable as capital gains and not as business income. The addition of ?288.01 crores was deleted.

14. Disallowance under Section 14A as per Rule 8D:
The Tribunal held that the Assessing Officer did not record proper satisfaction before making the disallowance. The matter was remanded back to the Assessing Officer for re-examination.

15. Depreciation on Model Fee:
The Tribunal held that the expenditure on new model fees was incurred prior to the commencement of production and was revenue neutral. The disallowance of ?47.79 lakhs was deleted.

16. Disallowance of Reimbursement of Foreign Travelling Expenses to Directors/Employees:
The Tribunal held that the per diem allowance policy was reasonable and practical. The disallowance of ?4.51 crores was deleted.

17. Expenses Incurred on Advertisement on Death Anniversary of Late Shri Raman Munjal:
The Tribunal held that the expenditure was for business purposes and was allowable under section 37(1). The disallowance of ?42.72 lakhs was deleted.

18. Disallowance of Commission Paid to Managing Director under Section 36(1)(ii):
The Tribunal held that the commission was part of the remuneration package and was not in lieu of dividend. The disallowance of ?52.46 crores was deleted.

19. Disallowance of Proportionate Amount of Premium Paid for Land Taken on Lease:
The Tribunal directed the Assessing Officer to allow depreciation on the premium paid for acquiring leasehold rights, as per the DRP's direction.

20. Disallowance of Expenses Incurred on Account of ‘Corporate Social Responsibility’ (CSR):
The Tribunal held that the expenditure was allowable as it was incurred out of commercial expediency. The disallowance of ?54.61 lakhs was deleted.

21. Disallowance u/s 80IC on Account of Cost to Cost Sale to Vendor:
The Tribunal held that outsourcing of certain intermediary processes did not affect the claim of deduction under section 80IC. The disallowance of ?28.46 crores was deleted.

22. Disallowance u/s 80IC on Account of Job Work/Outsourcing of Manufacturing Activity:
The Tribunal held that outsourcing of manufacturing activities did not affect the claim of deduction under section 80IC. The disallowance was deleted.

23. Disallowance u/s 80IC on Account of Violation with Respect to Inter Unit Transfer:
The Tribunal held that the inter-unit transfer of goods was genuine and commercially expedient. The disallowance of ?1.18 crores was deleted.

24. Disallowance u/s 80IC on Account of Other Income:
The Tribunal held that the other incomes were incidental to the manufacturing activity and eligible for deduction under section 80IC. The disallowance of ?223.25 crores was deleted.

25. Disallowance of Expenses Incurred on Repair and Maintenance of Various Assets Alleging to be Capital Expenditure:
The Tribunal held that the expenses were routine and did not result in the creation of any new asset. The disallowance of ?3.12 crores was deleted.

26. TDS at Lower Rate or Wrong Provision (Payment Made to M/s. G2 RAMS India Pvt. Ltd. for Event Organization):
The Tribunal held that the contract for organizing the event was covered under section 194C and not section 194J. The disallowance of ?24.40 crores was deleted.