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2022 (8) TMI 378 - AT - Income TaxDepreciation on electrical fittings - @ 10% or 15% - HELD THAT - This issue is squarely covered in favour of the assessee by the decision of Surat Bench of this Tribunal in assessee s own case for AY 2012-13 2019 (12) TMI 1294 - ITAT SURAT wherein the claim of the assessee for electrical installation @ 15% was allowed by the Tribunal. Since the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to AY 2012-13, we respectfully follow the decision of the Co-ordinate Bench of this Tribunal in assessee s own case for the immediately preceding year and direct the Assessing Officer to allow the claim of the assessee for depreciation on electrical installation @ 15%. Belated payment of employees contribution towards Provident Fund - HELD THAT - As this issue is squarely covered against the assessee by the decision of Hon ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation 2014 (1) TMI 502 - GUJARAT HIGH COURT , we uphold the impugned order of the learned CIT(A) confirming the disallowance made by the Assessing Officer on account of belated payment of employees contribution towards Provident Fund and dismiss Ground of assessee s appeal. Addition of short receipts allegedly declared by the assessee as compared to the receipts reflected in 26AS - HELD THAT - As assessee has submitted that the assessee is now in a position to produce the relevant documentary evidence to establish that the amounts in question represented advances on which taxes were deducted by the concerned parties and the same did not constitute the income of the assessee chargeable to tax in the year under consideration. He has urged that one opportunity may be given to the assessee to do so by sending the matter back to the Assessing Officer. Since the learned DR has not raised any objection in this regard, we restore this issue to the file of the Assessing Officer for giving the assessee one more opportunity to establish on evidence that the amounts in question were received by it as advances and the same did not constitute its income chargeable to tax for the year under consideration. Ground No.3 is accordingly treated as allowed for statistical purposes. MAT computation u/s 115JB - claim of the assessee for reduction of business loss or unabsorbed business loss, whichever is lower, from the book profit computed under Section 115JB - AO disallowed the claim of the assessee for set off of brought forward business loss against book profit - HELD THAT - As this issue involved in the Revenue s appeal is squarely covered in favour of the assessee by the decision of Hon ble Gujarat High Court in the case of PCIT Vs. Surat Textile Mills Ltd 2017 (3) TMI 270 - GUJARAT HIGH COURT . Addition on account of prior period expenses while computing book profit under Section 115JB - CIT-A deleted the addition - HELD THAT - As this issue is squarely covered in favour of the assessee inter alia by the decision of Hon ble Karnataka High Court in the case of CIT v . GMR Industries Ltd., 2020 425 ITR 504, wherein it was held that prior period expenses charged to profit and loss account cannot be deducted from the profit of the year for the purpose of computing book profit under Section 115JB of the Act as the same does not fall within the purview of Section 115JB - To the similar effect is the decision of Shivshahi Punarvasan Prakalp Ltd. 2011 (10) TMI 153 - ITAT MUMBAI wherein it was held that there is no provision for any adjustment on account of prior period expenses in Explanation-1 to Section 115JB(2) of the Act and, therefore, any addition on account of disallowance of prior period expenses while computing book profit is not permitted - we uphold the impugned order of the learned CIT(A) deleting the addition on account of prior period expenses while computing the book profit of the assessee-company under Section 115JB - Decided against revenue.
Issues Involved:
1. Depreciation on electrical fittings. 2. Disallowance for belated payment of employees' contribution towards Provident Fund. 3. Addition on account of short receipts as compared to 26AS. 4. Reduction of business loss or unabsorbed business loss from book profit under Section 115JB. 5. Addition of prior period expenses while computing book profit under Section 115JB. Issue-wise Detailed Analysis: 1. Depreciation on Electrical Fittings: The assessee claimed depreciation on electrical installations at 15%, treating them as part of plant and machinery. The Assessing Officer (AO) restricted this to 10%, as specified for electrical fittings, resulting in an addition of Rs.12,52,745/-. The CIT(A) upheld this decision, following a precedent from AY 2012-13. However, the Tribunal found that this issue was already decided in favor of the assessee for AY 2012-13 by the Surat Bench, allowing 15% depreciation. Following this precedent, the Tribunal directed the AO to allow 15% depreciation for AY 2013-14 and similarly for AY 2014-15. 2. Disallowance for Belated Payment of Employees' Contribution towards Provident Fund: The AO disallowed Rs.1,31,882/- due to late payment of employees' Provident Fund contributions. The CIT(A) confirmed this disallowance. The Tribunal upheld the CIT(A)'s order, citing the Gujarat High Court's decision in CIT Vs. Gujarat State Road Transport Corporation, which mandates disallowance for belated payments. 3. Addition on Account of Short Receipts as Compared to 26AS: The AO added Rs.15,14,241/- to the assessee's income, representing contractual receipts, rent, and professional fees not disclosed in the return but reflected in 26AS. The assessee claimed these were advances, not income, but failed to provide documentary evidence. The Tribunal, noting the assessee's readiness to furnish evidence, remanded the issue back to the AO for verification. 4. Reduction of Business Loss or Unabsorbed Business Loss from Book Profit under Section 115JB: The AO disallowed the set-off of Rs.16,50,63,161/- of unabsorbed business loss against book profit, citing the absence of such losses in the balance sheet post-restructuring. The CIT(A) allowed the set-off, referencing the Gujarat High Court's decision in Surat Textile Mills Ltd., which held that restructuring credits do not extinguish actual losses, allowing them to be set off against book profit. The Tribunal upheld the CIT(A)'s decision for both AY 2013-14 and AY 2014-15. 5. Addition of Prior Period Expenses while Computing Book Profit under Section 115JB: The AO added Rs.31,26,316/- of prior period expenses to the book profit under Section 115JB for AY 2014-15. The CIT(A) deleted this addition. The Tribunal upheld the CIT(A)'s decision, citing judicial precedents, including the Karnataka High Court's ruling in CIT v. GMR Industries Ltd., which stated that prior period expenses do not fall within the purview of Section 115JB adjustments. Conclusion: The assessee's appeals were partly allowed for AY 2013-14 and fully allowed for AY 2014-15, while the Revenue's appeals for both years were dismissed. The Tribunal's decisions were based on precedents and judicial pronouncements, ensuring consistency and adherence to established legal principles.
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