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2015 (12) TMI 842 - AT - Income TaxExclusion of excise duty and sales tax in the total turnover while computing deduction u/s 80HHC - Held that - This issue is now covered, in favour of the assessee, by Hon ble Supreme Court s judgement in the case of CIT vs. Laxmi Machine Works (2007 (4) TMI 202 - SUPREME Court). - Decided against revenue. Proportionate allocation of expenses - CIT(A) directing that apart from indirect expense already considered by the assessee for proportionate allocation, only auditor s expenses need to be allocated proportionately and directing the A.O. to rework the indirect expenses for export of trading goods - Held that - This issue is also now covered, in favour of the assessee, by order in assessee s own case for the assessment year 2001-02. - Decided against revenue. Disallowance of excess claim of depreciation - reducing the foreign exchange fluctuation gain from the WDV of plant and machinery in view of the provisions of section 43(1) - CIT(A) deleted the addition - Held that - As learned CIT(A) has rightly held, the provisions of section 43A of the Act come into play only when the asset in question is acquired from outside India whereas, as is the undisputed position on the facts of this case, the related plant and machinery was indigenous . There is a categorical finding to that effect by the Assessing Officer himself. As such, the provisions of section 43A of the Act do not come into play at all. Learned Departmental Representative could not point out any other statutory provision under which impugned adjustment could have been made. In view of these discussions, we see no reasons to disturb the relief granted by the ld. CIT(A). We approve the same and decline to interfere in the matter. - Decided against revenue. Depreciation on computer software - Held that - This issue is rendered infructuous as the matter has been decided , in favour of the assessee, in the case of DCIT vs. Icon Data Management Limited 2012 (11) TMI 1096 - ITAT AHMEDABAD - Decided against revenue.
Issues Involved:
1. Inclusion of excise duty and sales tax in total turnover for computing deduction under section 80HHC. 2. Allocation of indirect expenses for the export of trading goods. 3. Disallowance of excess claim of depreciation due to foreign exchange fluctuation gain. 4. Depreciation on computer software arising from disallowance in a previous assessment year. 5. Depreciation disallowance by reducing foreign exchange fluctuation gain from the written down value (WDV) of plant and machinery. Issue-wise Detailed Analysis: 1. Inclusion of Excise Duty and Sales Tax in Total Turnover for Computing Deduction under Section 80HHC: The first ground of appeal concerns the inclusion of excise duty and sales tax in the total turnover while computing the deduction under section 80HHC. The Assessing Officer's grievance was dismissed as the issue is covered in favor of the assessee by the Hon'ble Supreme Court's judgment in the case of CIT vs. Laxmi Machine Works (290 ITR 667). Therefore, the grievance of the Assessing Officer lacks legally sustainable merits, and ground no.1 was dismissed. 2. Allocation of Indirect Expenses for the Export of Trading Goods: The second ground of appeal deals with the allocation of indirect expenses for the export of trading goods. The issue is covered in favor of the assessee by the order dated 13th November 2014, in the assessee's own case for the assessment year 2001-02. The co-ordinate bench had upheld the CIT(A)'s direction to allocate only auditor's expenses proportionately in addition to the already considered indirect expenses. The Tribunal saw no reason to deviate from this view and upheld the relief granted by the CIT(A), dismissing ground no.2. 3. Disallowance of Excess Claim of Depreciation Due to Foreign Exchange Fluctuation Gain: The third ground of appeal involves the disallowance of excess claim of depreciation due to foreign exchange fluctuation gain on a foreign exchange loan borrowed to acquire indigenous plant and machinery. The CIT(A) deleted the disallowance, observing that section 43A applies only when the asset is acquired from outside India. Since the plant and machinery were indigenous, section 43A was not applicable. The Tribunal agreed with the CIT(A), noting that no other statutory provision justified the adjustment. Thus, ground no.3 was dismissed. 4. Depreciation on Computer Software Arising from Disallowance in a Previous Assessment Year: In the appeal for the assessment year 2005-06, the second ground of appeal pertained to the depreciation on computer software arising from disallowance in the assessment year 2002-03. The issue was rendered infructuous as the matter had been decided in favor of the assessee by a coordinate bench of the Tribunal in the case of DCIT vs. Icon Data Management Limited. Consequently, ground no.2 was dismissed. 5. Depreciation Disallowance by Reducing Foreign Exchange Fluctuation Gain from WDV of Plant and Machinery: In the appeals for the assessment years 2005-06 and 2008-09, the issue of depreciation disallowance by reducing foreign exchange fluctuation gain from the WDV of plant and machinery was raised. The Tribunal followed its adjudication for the assessment year 2004-05, where it upheld the CIT(A)'s relief, noting that section 43A did not apply as the assets were indigenous. Therefore, the Tribunal upheld the relief granted by the CIT(A) and dismissed the respective grounds of appeal. Conclusion: All three appeals were dismissed, with the Tribunal consistently upholding the CIT(A)'s decisions across the various issues raised by the Assessing Officer. The judgments were pronounced in the open Court on the 30th day of September 2015.
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