9911796707
TMI Blog1983 (3) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act read with rules and allowed depreciation accordingly. The assessee went in appeal before the CIT (A) who, see went in appeal before the CIT (A) who, however, confirmed the orders of the ITO for all the years. The assessee is in appeal before us. 4. After hearing both the parties, we are of the view that the issue is squarely covered by the earlier decision of the Tribunal in assessee s own case for the asst. yrs. 1968-69 to 1971-72. Since the CIT (A) confirmed the orders of the ITO on that basis we, respectfully following that earlier order of the Tribunal, uphold the orders of the CIT (A) in this regard. 5. With regard to the depreciation for the Batala unit, the ld. counsel of the assessee contended that the depreciation was not allowed correctly. The ld. counsel of the assessee, however, did not bring out the detailed working of the depreciation allowance and as such we are not in a position to interfere in this regard also. It appears that the assessee claimed depreciation amounting to Rs. 4,28,403 including assets installed at Ballabgarh on which the assessee did not make depreciation in the earlier years. However, the ITO had been giving depreciation on these asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit of the assessee, the benefit cannot be extended to this part of the asset. The orders of the lower authorities are accordingly upheld. 9. The next ground regarding development rebate is relevant only for the asst. yr. 1973-74. The said development rebate amounting to Rs. 44,756 was claimed by the assessee for the additions made to the plants of the unit at Batala and Ballabgarh amounting to Rs. 47,326 and Rs. 1,73,695 making a total of Rs. 1,71,023. The development rebate was claimed at the rate of 25% and the amount was Rs. 42,756. The ITO did not allow the claim of the development rebate on the reasoning that development rebate reserve was not created. The ld. CIT (A) confirmed the disallowance. According to him, the assessee made profit and the profit as per the profit and loss account amounted to Rs. 4,96,987 out of which the assessee could have created the necessary 75% reserve of the development rebate allowable. Since the assessee did not comply with the requirements as provided in law the claim was rightly rejected. 10. Shri A. K. Jain, the ld. counsel for the assessee vehemently objected to the orders of the lower authorities. According to him, the ITO should h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to the counsel at the outset the assessing officer is to find whether in respect of any new machinery/plant (owned by the assessee and wholly used for the purpose of business carried on by him), the previous year under consideration is the year in which said plant/machinery was first put to use. Second step for the assessing officer is to find as to what is the actual cost of such plant/machinery. As a third step, the amount of development rebate is to be calculated at the rate applicable thereto in accordance with s. 33(1)(b), IT Act on the hypothetical assumption that the conditions laid down in s. 34 are satisfied. Next it is to be found not whether the figure of total income computed without making any allowance under sub-s. (1) of sub-s. (1A) of s. 33 or sub-s. (1) of s. 33A or any deduction under Chapter VIA or s. 280-O is nil or is less than the full amount of development rebate calculated as aforesaid. Thus, according to the assessee, if at this stage in view of the figure to total income as aforesaid, no sum is found to be actually allowable as development rebate, no enquiry need be made as to creation of requisite development rebate, no enquiry need be made as to cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years namely, 1975-76 and 1976-77 is disallowance of reimbursement of medical erpenses. The assessee company spent various amounts on account of medical expenses to the Directors and executives. The ITO while working out disallowance amount under s. 40A(5) made proportionate disallowances on account of these medical expenses. On appeal, the disallowance made by the ITO was confirmed for each of the above years as the same comes within the meaning of perquisite as defined in the IT Act. 14. After hearing both the parities, we are of the view that the assessee is to succeed. This issue came up before the various Benches of the Tribunal and the Special Bench of the Tribunal, Bombay in the case of M/s Blackie and Sons held that reimbursement of medical expenses are no includible under s. 40A(5) if the same is paid in cash to the employees as a reimbursement. In some cases the Tribunal even came to the conclusion that the reimbursement does not come within the definition of disallowable expenditure under s. 40A(5)(a)(ii) as in that case the term whether convertible into money or not was used to indicate that cash payments are not contemplated under this sub-clauses. Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
