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TMI Blog2015 (10) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... earing to the assessee. - Decided in favour of assessee for statistical purposes only. Rejection of the claim of the appellant of excluding 100% of the export profits from net profit while computing the book profit u/s. 115JB of the Act instead of 80% of the export profits - Held that:- Facts in brief are that the assessee had deducted an amount of ₹ 74,74,754/- being dividend exempt u/s. 10(33) of the Act. In the computation of income u/s. 115JB, the assessee has reduced the above amount for computing its profits. During the course of assessment proceedings the assessee was asked as to why the above said amount should not be disallowed u/s. 14A of the Act. The assessee vide its letter dated 22/1/2004 stated that the company has not incurred expenditure for the purpose of earning of any income, which is exempt under the Act and hence, provision of section 14A will not be applicable in the case of the assessee. However, this claim was not found acceptable by the AO. According to the AO the said section came with retrospective effect from 1.4.1962 by the Finance Act, 2001, and clearly lays down that for the purpose of computation of total income no deduction shall be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary facts we find no infirmity in the conclusion drawn by the ld. CIT(A). Disallowance of contribution for compulsory afforestation to make up the forest area lost due to mining done by the assessee for the Gagal Cement Plant - Held that:- In view of the decision in Gujarat Ambuja Cement Ltd. (2005 (6) TMI 486 - ITAT MUMBAI ) wherein reliance was placed upon the decision from Hon'ble Apex Court in the case of Empire Jute Company Ltd. (1980 (5) TMI 1 - SUPREME Court ), the amount in question is held to be an allowable deduction u/s. 37(1) of the Act. Contribution to construction of stadium in Himachal Pradesh - Held that:- This expenditure was incurred for commercial expediency to maintain good and healthy relation with local people/State Government which essential to run the large industrial unit. Therefore, we find no infirmity in the order more specifically when identically, for Assessment Year 2000-01 it was allowed in favour of the assessee. Provision for contingencies in computation of book profit u/s. 115JB - Held that:- That in view of the amendment in sec.115 JB of the Act, the issue is covered against the assessee Profit on sale of fixed asset while making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record The dispute is regarding allowability of claim of deduction on account of write-off of Railway/Insurance claims. The claims relate to cement transportation written off by the assessee for destruction of stock, damage or pilferage in transit. However, the exact nature of claim is not clear from records. The ld. AR placed reliance on the decision of Hon'ble Supreme Court in the case of TRF Ltd. vs. CIT (323 ITR 397) (supra), which is relevant only in relation to bad debt. The claim of bad debt can be allowed only when the amount has been taken into account in computation of income in the earlier year. It has not been made clear as to how the amount claimed as deduction has been taken into account in the computation of income of earlier year. On account of shortages found in transportation of goods assessee must have made claim with the insurance agencies and railways. It is not clear whether the claim lodged by the assessee with railways/insurance had been declared as income in the year of the claim, because only in that case the assessee can make claim of bad debt in the subsequent year when the full claim is not received. Facts being not clear, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As the assessee did not provide the details about the interest amount referable to investment in tax free bonds etc., there is no option but to make proportionate allocation . The AO following the earlier orders for Assessment Years 1999-2000 and 2000-01 disallowed a sum of ₹ 31,17,643/- out of total interest expenses on proportionate basis as expenditure alleged to be incurred for earning dividend income. The ld. CIT(A) followed the order of his predecessor and allowed the ground of the assessee. Keeping in view the totality of facts and the circumstances the ld. Assessing Officer is directed to re-compute as per the decision of the Hon'ble Supreme Court in Ajanta Pharma Ltd. vs. CIT (2010) 327 ITR 305 and decide afresh for which due opportunity of being heard to be provided to the assessee . This ground is allowed for statistical purposes. 5. Ground No.6(a) and (b) relating to Interest income; Rental income, Lease income and commission and other income from profit and Gains of Business and Profession for the purpose of deduction u/s. 80HHC was not pressed by the ld. Representatives of the assessee . Similarly Ground No.7 regarding provisions of sec.115JB and ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Assessment Year 2000-01 it was allowed in favour of the assessee. 10. The next ground pertains to subsidy received from Government of West Bengal. The ld. CIT(A) followed the decision of the Tribunal dated 18/1/2007 (ITA No.2361/Mum/95), therefore, we find no infirmity in the direction to the Assessing Officer . 11. The next ground No.7 pertains to provision for contingencies of ₹ 13,00,00,000/- in computation of book profit u/s. 115JB of the Act. The ld. DR pointed out that in view of the amendment in sec.115 JB of the Act, the issue is covered against the assessee . this assertion was consented to be correct. Therefore, this ground is decided against the assessee . 12. Ground No.8 and 9 with respect to profit on sale of fixed asset at ₹ 4,80,88,927/- while making computation of book profit u/s. 115JB of the Act and sales tax subsidy amounting to ₹ 47,12,15,520/-, these issues are covered against the assessee. Therefore, these ground are decided against the assessee. 13. Finally appeal in ITA No.4240/Mum/2007 is partly allowed for statistical purposes and that in ITA No.4562/Mum/2007 is partly allowed. 14. Now we shall take up the additional gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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