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TMI Blog2015 (1) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... ut for A.Y.2008-09 this ground is dismissed. Exemption u/s 10A claim pertaining to SEZ unit. - Held that:- We find that the Assessing Officer has not allowed any opportunity to the assessee for claiming exemption u/s 10A after computing the business income of the alleged eligible undertaking at a positive figure for the first time. In our considered view, while making the assessment u/s 143(3) of the Act, the Assessing Officer is duty bound to compute the total income as per the provisions of Income-tax Act and therefore, in allowing deductions/exemptions also to the assessee which is statutorily allowable to the assessee. In the circumstances, we set aside the orders of the lower authorities on this issue and restore the matter back to the file of the Assessing Officer for verification of the claim of the assessee for deductions u/s 10A of the Act and thereafter passing an order in accordance with the law. - Decided in favour of assessee for statistical purposes. Disallowance of professional charges - Held that:- The assessee has furnished the details of the expenditure hence it was unwarranted on the part of the AO to estimate the impugned disallowance in the absence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeal s) has erred in confirming the action of the assessing officer for disallowance of ₹ 13,30,952/- with regard to electric power charges. 4. Vide an order u/s.143(3) for A.Y.2005-06 dated 26.12.2008, the AO has disallowed the claim as under: 2. Disallowance of capital expenditure. The assessee has debited ₹ 1330952/- being capital expenditure in Electric Power account under the head Electric Power and fuel charges in P L account. In the course of assessment proceedings, the A.R. stated in letter dated 03.12.2008 regarding the capital expenditure debited to P L A/c. Hence, an amount of ₹ 1330952/- is not allowed as revenue expenditure from the electricity bill. However the assessee is entitled to depreciation of ₹ 99,821/- @ 7.50% on the above amount of ₹ 13,30,952/-. However the assessee is entitled to depreciation on WDV in the subsequent year. Since GP addition has already been made no separate addition is made on this account. 5. When the matter was carried before the First Appellate Authority, the action of the AO was confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no.1 of the assessee is dismissed. 8. In view of the above, we hereby follow the verdict of the Respected Co-ordinate Bench and do not find any force in this ground of the Assessee. Moreover, we have also noted that AO himself has held that the Assessee is entitled for the claim of depreciation on the said amount. Due to his reason, we are of the view that the Assessee should not have any grievance, once it was suo motu allowed by the Revenue Department. In the result, this ground of the Assessee is hereby dismissed. 9. Ground No.2 for A.Ys. 2006-07 and 2007-08 is in respect of the disallowance of garden expenses. 10. At the outset, we have been informed that on identical facts in the past for A.Y. 2005-06 this issue was carried upto the stage of the second appeal and Respected Co-ordinate B Bench in Assessee s own case bearing ITA No.2393/Ahd/2008 vide an order dated 9th of January, 2015 has allowed this ground of the Assessee in the following manner: 9. The learned counsel for the assessee submitted that expenses of ₹ 51,216/- is incurred for maintenance of garden and complete details thereof were filed. The learned DR relied on the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of claim pertaining to SEZ unit. 15. At the outset, we have been informed that for A.Y. 2004-05 on identical facts Respected Co-ordinate B Bench Ahmedabad in ITA Nos. 1300 2030/Ahd/2008 in assessee s own case order dated 12.12.2014 the matter has been restored back to the file of the AO with certain directions, relevant paragraph 9 is reproduced below: 9. We find that the CIT(A) was not justified in rejecting the claim of the assessee on the above stated reasons. The claim of the assessee is that it could not claim exemption u/s 10A as according to its return there was loss from the eligible unit and consequently for the first time opportunity to claim exemption u/s 10A arose only when certain disallowances/additions were made by the Assessing Officer which resulted in positive income of the eligible undertaking. We find that the Assessing Officer has not allowed any opportunity to the assessee for claiming exemption u/s 10A after computing the business income of the alleged eligible undertaking at a positive figure for the first time. In our considered view, while making the assessment u/s 143(3) of the Act, the Assessing Officer is duty bound to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of the Act. We order accordingly. This ground of the assessee may be treated as allowed but for statistical purpose only. 20. For A.Y.2008-09 a disallowance u/s.40a(ia) was challenged vide ground no.3 and in this regard facts of the case as per the assessment order were the assessee had deducted the tax at source in the months of September 2009, February 2008 and March 2008, however it was deposited in the government account on 14th October, 2008. The AO has also noted that the return of income was filed on 30th of September, 2008. The assessee has informed that a sum of ₹ 2,95,686/- was disallowed by the Assessee suo motu in the return of income. For the balance of amount ₹ 40,487/- the AO has invoked the said provision and disallowed the same. The short request before us is that the aforesaid amount may be directed to be allowed in the year in which it was actually paid. Rather, learned CIT(A) has also held that the provisions of the Act provides for allowing the payment in the year in which it is paid. We order accordingly and allow this ground of the assessee as per the direction. 21. From the side of the Revenue, Cross Appeals have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) as follows: 3.1 This is regarding disallowance of ₹ 1,03,723/- u/s.145A. Vide letter dated 05.03.2010 the appellant has stated that the AO has substituted the figure of ₹ 1,03,723/- by ₹ 5,22,627/-, vide order dated 16.02.2010 passed u/s,154 as there was an apparent mistake. In the assessment order the AO has stated that the assessee was asked to explain as to whether this amount of excise duty was included in the earlier year through adjustment u/s 145A. In case it was not offered as income the same was not to be allowed as expenses during the year under consideration. The assessee replied that the assessee has already offered the opening stock excise duty in A.Y. 2005-06 by aggregating the same to the closing stock. The assessee has also mentioned that section 145A is a tax neutral and does not lead to enhancement of profit in any way. The AO has stated that the reply of the assessee is not acceptable. According to him Section 145A is not tax neutral and opening stock and closing stock should include tax, duty, cess as part of its cost as provided by Section 145A. The AO further stated that the closing stock should always have element of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lse or bogus. Penalty u/s 271(1)(c) cannot be levied only on the basis of probability. Therefore, the CIT(A) was not justified in confirming penalty u/s 271(l)(c) in respect of disallowance of ₹ 9,73,072/- on the ground that the expenditure for business purposes could have been lesser. Our view finds support from the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd., [2010] 322 ITR 158 (SC), wherein it was held that where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty u/s 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. Therefore, we delete the levy of penalty u/s 271(1)(c) in respect of disallowance of expenses out of foreign travel expenditure. Therefore, the appeal of the assessee is allowed . 14. We find that the genuineness of the expenditure is not in doubt. No material has been br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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