2013 (3) TMI 883 - HC - Income Tax

Summary

Issues:
1. Classification of rental income under 'Income from Other Sources' instead of 'Income from House Property'
2. Allowance of 100% depreciation on fork lift
3. Allocation of H.O. expenses to eligible unit under Section 80IB
4. Treatment of expenditure on moulds and dies as revenue expenditure
5. Allowance of professional fees for trademark protection as expenditure
6. Computation of deduction under Section 80HHC including sale of scrap, disposal of empty containers, and indirect expenses
7. Reduction of deduction under Section 80IB from profits for calculating deduction under Section 80HHC
8. Deduction for destruction of obsolete stock-in-trade
9. Treatment of advertisement expenditure as revenue in nature
10. Deletion of penalty imposed under Section 271(1)(c)

Analysis:
1. The Tribunal justified the classification of rental income under 'Income from Other Sources' instead of 'Income from House Property'. The decision was based on the fact that the Tribunal found no requirement for the vehicles to be registered under the Motor Vehicles Act for depreciation benefits. The Tribunal's factual findings were deemed valid, and the appeal was not entertained.

2. The Tribunal allowed 100% depreciation on fork lift, noting that the vehicles operated within the plant and carried goods, meeting the criteria for depreciation benefits. The decision was upheld based on factual findings, and the appeal was dismissed.

3. The Tribunal allowed the claim under Section 80IB without allocating H.O. expenses to the eligible unit. The Tribunal's decision was based on maintaining separate accounts for each unit, leading to a valid allocation. As the facts were similar to a previous case, the appeal was not entertained.

4. The Tribunal treated expenditure on moulds and dies as revenue expenses, considering the short life of these assets and the changing consumer preferences. The decision was upheld based on factual findings, and the appeal was dismissed.

5. The Tribunal allowed professional fees for trademark protection as expenditure, emphasizing the benefit derived by the assessee regardless of trademark ownership. The decision was supported by contractual terms, and the appeal was not entertained.

6. The Tribunal allowed the claim under Section 80HHC based on previous orders and factual similarities with previous cases. As no challenge was presented for a specific year, the appeal was not entertained.

7. The issue regarding the reduction of deduction under Section 80IB from profits for calculating deduction under Section 80HHC was settled in favor of the assessee based on a previous court decision. The appeal was not entertained.

8. The Tribunal upheld the deduction for destruction of obsolete stock-in-trade, following previous decisions and lack of challenge from the revenue department. The appeal was not entertained.

9. The issue of treating advertisement expenditure as revenue in nature was settled in favor of the assessee based on a previous court decision. The appeal was not entertained.

10. The Tribunal deleted the penalty imposed under Section 271(1)(c) based on complete disclosure of facts and a change in the head of income. The decision was supported by a previous court ruling, and the appeal was not entertained.