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TMI Blog2015 (11) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same is hereby affirmed. - Decided against assessee. Additional sugar cane price assessee claimed on the basis of purchase of sugar cane - Held that:- We hold that assessee is following the mercantile system of accounting. Assessee is entitled for the claim of expense on Revenue/trading account on crystallization of the law. In the said amount in assessment year 2005-06 although it might pertain to assessment year 2002-03. Hence assessee will be entitled for the said claim for the assessment year 2005-06 subject to verification on merits by authorities below about the bonafide and genuineness of the claim. The authorities below are also directed to verify that the assessee's claim is allowed not more than once. The assessee has claimed that this amount in assessment year 2002-03, 2004-05, 2005-06 and 2006-07. Subject to above verification additional claim should be allowed only in assessment year 2005-06 subject to verification and checking by the authorities below and hence the claim of assessee for impugned year is rejected. - Decided in favour of assessee by way of remand. Deduction u/s 80HHC - Held that:- A decided in case of Ajanta Pharma Ltd. Vs. CIT [2010 (9) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ane. The Ld. CIT (A) disallowed the claim stating that the same has crystallized in the previous year 2004-05 relevant to Assessment Year 2005-06 and he further erred in stating that the same is to be allowed in the Assessment Year 2005-06 on merits. The Ld. CIT (A) has erred in dismissing the Appellants' claim u/s 80HHC Considering the Assessee's income as assessed under book profit u/s 115JB. The Ld. CIT (A) has erred in following formulations in the case of CIT vs Ajanta Pharma (223 ITR 441 (2009) (Bombay). 2. Ground No. 1 is regarding depreciation of ₹ 417784/- on depreciation on account of addition made during the year between as per block of assets as per companies Act and block of asset as per Income Tax Rules. 3. It was observed by the Assessing Officer that fixed assets of block of assets as per Companies Act on sugar division as well as chemical division and the statement of depreciation claimed as per income tax and there difference between two on account of addition of assets made in certain asset during the year as under:- Division Addition made in the fixed assets as per Companies Act Cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d: Furniture Fixture as per accounts 651.29 651.29 22.64 673.93 Chemical division Furniture Fixture Less : Plant Machinery as per I.T. Act 49.32 49.32 (-) 22.63 (A) 49.32 26.69 Sugar Division Office Equipment (Not considered by AO) 0 18.65 Chemical Division Office Equipment (Not Considered by the AO) 0 22.64 (B) 0 41.29 (A)+(B) 67.98 7. The CIT(A) rejected the contention of the assessee and confirmed the addition. 8. Aggrieved by the order of CIT(A), the assessee is in appeal before us and filed the reconciliation statement as under:- Distillery Chemical Division Additions to fixed assets during the previous year. [To the extent of the difference that is relevant for the appeal] Addition on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the distillery and chemical division while as per Income Tax Act, the same is treated as furniture fixtures of ₹ 67,98,208/-. The assessee submitted that the asessee has claimed depreciation correctly in the Income Tax Act as per the treatment and no prejudice is caused to the Revenue and assessee has claimed less depreciation under the Income Tax Act because the furniture fixture carries the depreciation at the rate of 10% while plant and machinery carries the depreciation at the rate of 25%. Similarly in the sugar division, the assessee has considered furniture fixture of ₹ 1802000/- and office equipment at ₹ 22,64,000/- under the companies Act while as per Income Tax Act, the same is merged together under the head furniture fixtures of ₹ 40,65,104/- and hence correct depreciation has been claimed. The assessee submitted that it has claimed lower depreciation @ 10% on furniture fixture under the Income Tax Act while depreciation of plant machinery @ 25% under the Income Tax Act and hence lower depreciation has been claimed and no prejudice is caused to the Revenue. 10. Ld. DR on the other hand relied upon the order of authorities below. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stamp fee is a capital expenditure which inextricably linked to the capital subsidy of ₹ 167.30 lacs and thus we find no reasons to interfere with the orders of authorities below and the same is hereby affirmed. We note that the assessee has relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. General Insurance Corporation (supra) which relates to stamp duty paid for increase in authorized capital pursuant to the bonus shares which was held to be the revenue expenditure because the bonus shares does not entail any increase in capital which only relates to the capitalization of existing profits and hence was held to be revenue expenditure by the Hon'ble Supreme Court. Similarly the Judgment of Hon'ble Bombay High Court in the case of CIT Vs. Cinecita (P.) Ltd. (supra) relied upon by the assessee is also distinguishable because it relates to the lease of 20 years entered into by the assessee, whereby the stamp duty, professional /registration charges paid for preparation and getting registered deed of lease was considered to be revenue expenditure. However, in the present case, the issue relates to the stamp fee paid for execution of agreement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses in return of income and no provisions has been made in books of account, this claim made before the CIT(A) as additional ground of appeal as the AO has also rejected the claim of the assessee for assessment year 2004-05. The CIT (A) observed that assessee is claiming these expense on the basis of agreement with the sugarcane grower association vide ..order dated 06.09.2004 and hence the claim has crystallized in the assessment year 2005-06. The CIT(A) held that this claim cannot be allowed in the assessment year 2002-03 and it will be examined on merits in the assessment year 2004-05 or 2005-06 when it came up for hearing before him. 23. Aggrieved by the order of CIT(A), the assessee is in appeal before us. Assessee submitted that this claim of ₹ 1,14,59,063/- got crystallized in the assessment year 2005-06. Assessee submitted that in assessment year 2005-06, the CIT(A) presumed that it should be allowed in assessment year 2006-07. Assessee submitted that it has filed a rectification application u/s 154 before the CIT(A) for assessment year 2005-06 which is still pending. It was also submitted that his claim got crystallized in assessment year 2005-06 and hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) or sub-section (3A), as the case may be, of that section and subject to the conditions specified in that section, thereby meaning that the deduction allowable would be only to the extent of deduction computed in accordance with the provisions of section 80HHC. Thus, according to the Department, both eligibility as well as deductibility of the profit have got to be considered together for working out the deduction as mentioned in clause (iv) of Explanation to section 115JB. We find no merit in this argument. If the dichotomy between eligibility of profit and deductibility of profit is not kept in mind then section 115JB will cease to be a self-contained code. In section 115JB, as in section 115JA, it has been clearly stated that the relief will be computed under section 80HHC(3)/(3A), subject to the conditions under subsections (4) and (4A) of that section. The conditions are only that the relief should be certified by the Chartered Accountant. Such condition is not a qualifying condition but it is a compliance condition. Therefore, one cannot rely upon the last sentence in clause (iv) of Explanation to section 115JB [Subject to the conditions specified in sub-sections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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