9911796707
TMI Blog2012 (8) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... dered by this Tribunal for the assessment year 1996-97 and 1997-98 vide order dated 16 May 2012 relating to the legal charges incurred by the assessee in connection with the land acquisition in para 43.1 and 43.2 as under: "43.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. At the outset, we note that the issue raised in this appeal has been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in para 12.1 as under: "12.1 In Assessment Year 1994-95, in assessee's own case in ITA No.3698/Mum/99, vide order dated 13th Feb 2009, this Tribunal on an identical expenses, has held that they were capital in nature. Following the same, we dismiss ground nho.11 of the assessee." 43.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue in favour of the revenue and against the assessee." 2.2 Respectfully following the earlier orders of this Tribunal, we decide this issue in favour of the revenue and against the assessee. The order of CIT(A) qua this issue, is upheld. 3. Ground number 2 of assessee's appeal is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -87 to 1989-90. We find the Tribunal in the consolidated order dated 22' March, 2007 at para 20 of the order, after following the decision of the Tribunal in assessee's own case for the A.Ys. 1984-85 to 1985-86 has deleted such disallowance. Respectfully following the order of the Tribunal, in assessee's own case and in absence of any contrary material brought to our notice, the ground raised by the assessee is allowed." 13.2. Respectfully following the aforesaid decision of the Tribunal, we delete the disallowances sustained by the CIT(A) and allow ground No. 12. 10.3 Thus, as far as the issue regarding the disallowance of interest on welfare cess, electricity duty and surface rent u/s 43B, the same is covered by the order of the Tribunal for the Assessment Year 1995-96. 10.4 As regards the disallowance of interest on entry tax, the Sr ld counsel for the assessee has submitted that this issue is covered by the order of the Calcutta Bench of the Tribunal in the case of Fort Gloster reported in 252 ITR(AT) 100 (Cal). 10.5 Applying the similar analogy as in the case of interest on welfare cess, electricity duty and surface rent, we allow the claim of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court in the case of Goreylal Dubey reported in 232 1TR 246. The Hon'ble Supreme Court, following it own decision in the case of India Cements reported in 188 ITR 690, held that royalty is a tax. However, the Hon'ble Supreme Court in the case of State of West Bengal vs. Kesoram Industries. Ltd., reported in 266 ITR 721 at page 767of the order has held as under "We have clearly pointed out the said error, as we are fully convinced in that regard and feel ourselves obliged constitutionally, legally and morally to do so, lest the said error should cause any further harm to the trend of further harm to the trend of jurisprudential thought cantering around the meaning of royalty. We hold that royalty is not tax. Royalty is paid to the owner of land who may be a private person and may not necessarily be the State. A private person owning the land is entitled to charge royalty but not tax. The lessor receives royalty as his income and for the lessee the royally paid is an expenditure incurred. Royalty cannot be tax. We declare that even in India Cement (1990) 1 SCC 12 it was not the finding of the court that royalty is a tax. A statement caused by an apparent topogr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase for the assessment year 1994-95 and the revenue has not filed any appeal against the order of this Tribunal pertaining to this issue. He has referred the appeal filed by the revenue before the honourable High Court in ITA no. 2930 of 2010 and submitted that the revenue did not challenge the finding of this Tribunal on this issue in the appeal before the honourable High Court. The learned D.R. has not disputed this fact that the revenue has not challenge the finding of this Tribunal on this issue for the assessment year 1994-95 before the honourable High Court. This Tribunal for the assessment year 1994-95 has considered and decided in para 32.5 to 32.11 as under: "32.5 We have considered the rival contentions and perused the material placed before us. Both the parties before us agreed on the factual aspect of the matter. The only dispute that emerges is that it is the case of the revenue that by contributing towards the bridge built by the State Government for replacing annual recurring expenses towards piling up of cement bags to prevent sea water entering into the premises of the assessee during rainy season, the assessee derived benefit of an enduring nature whereas, as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the assessee was making a certain recurring expenditure annually in preventing the sea water entering into its premises. Replacement of annual recurring expenditure by one time contribution is revenue expenditure. Therefore, in our considered opinion, the expenditure did not bring any capital asset of an enduring benefit or advantage and the object of making the payment was purely one of commercial expediency. 32.10 Be that as it may be, let us step into another aspect of the matter. It is a fact that the AO held the impugned expenditure as capital in nature without considering it for depreciation. It is also a fact that no new asset came to the assessee out of the expenditure so capitalized by the AO. The Income-tax Act provides for writing off the expenditure in whatever form it is in the accounts either over the years or in the year of incurring of such expenditure. So, this aspect of the matter also goes against the revenue. Now let us also examine whether the expenditure in question is laid out for the business of the assessee. The assessee contributed for a part of expenditure on a bridge constructed by the State Government across a river. The absence of the bridge caused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.1 to 14 as under: "13.1 We have heard the Sr ld Counsel for the assessee as well as the ld DR and considered the relevant material on record. At the time of hearing of this appeal, the Sr ld counsel for the assessee has submitted that the benefit of the interest subsequently withdrawn as a result of appellate orders should be given to the assessee and the interest subsequently withdrawn should not be taxed. He has relied upon the decision of the Tribunal in the case of Avada Trading Co reported in 100 ITD 131. 13.2 We further note that for the AY 1993-94, the Tribunal has considered and decided a similar issue in ITA No 1523/Mum/1997 vide order dated in para 62 as under: "62. We have heard the parties and considered the rival submissions. These refunds have been granted to the assessee in the year under consideration and therefore, they would partake the character of income of the assessee. If however, any refund has been found to be not refundable to the assessee and consequently the interest granted is withdrawn the same would not partake the character of income. We accordingly direct the AO to reduce from the taxability of the aforesaid interest of granted to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows:-, '25. In grounds of appeal No. 32 to 35, the assessee has challenged the order of the CIT(A) in allocating head office expenses and thereby reducing the quantum of deduction available to the assessee under the following provisions: Section Rs. 8OHH 14,20,000 801 5,54,600 80M 7,50,000 80-0 3,50,000 30,74,600 15.3 The Sr ld counsel for the assessee has pointed out that the revenue has not filed any appeal on this issue against the order of the Tribunal. 15.4 Therefore, respectfully following the earlier order of the Tribunal, we decide this issue in favour of the assessee." 8.2 Following the earlier order of this Tribunal to decide this issue in favour of the assessing and against the revenue. 9. The alternative plea raised in ground no.6.4 has become infractuous and hence rejected. 10. Ground number 7 is as under: Deduction u/s 80 HHC: 7.1 The learned CIT (A) erred in upholding the AO's view that deduction u/s 80 HHC of the Act is to be computed for the Company as a whole and rejecting the contention of the appellant that the deduction u/s 80 HHC is to be computed separately in respect of each individual U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: "28. In the event that the CIT(A)'s order that deduction u/s. 80HHC of Act is to be computed by considering all units of the appellant as a whole is upheld, then the CIT(A) erred in including inter-unit and inter divisional transfers of Rs. 338.41 crores as part of total turnover, which results in the same figure being counted as a number of times and hence depriving the deduction u/s. 80HHC.' "29. In the alternative the learned CIT(A) ought to have held that deduction u/s. 80HHC of the Act be computed on the basis of considering all units which had exports together." 22.1 Alter hearing both the sides, we find similar issue had come up before the Tribunal in assessee's own case and the Tribunal in its consolidated order for A.Ys. 1986-87 to 1989-90 order dated 22' March, 2007 at para 154 of the order has held as under: "We have considered the rival submissions, perused the materials on record and have gone through the orders of authorities below. We find that there are two aspects involved exclusion of inter division transfer from total turnover while computing deduction u/s. 8OHHC. Second aspect is regarding exclusion of excise duty from total tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered the relevant material on record. At the outset, we note that an identical issue was considered and decided by this Tribunal in assessee's own case for the assessment year 1996-97 and 1997-98 in para at 19.1 to 19.3 as under: 19.1 We have heard the Sr ld Counsel for the assessee as well as the ld DR and considered the relevant material on record. At the outset, we note that this issue has been considered and adjudicated by the Tribunal in assessee's own case for the Assessment Year 1995-96 in para 27.5 to 25.7 as under: "27.5 We have considered the rival submissions made by both the sides, perused the orders of AO and the CIT(A) and the various decisions cited before us. There is no dispute to the fact that the assessee is following the 'mercantile system of accounting and has provided in the books accrued interest of Rs. 32,36,992/- on such securities. It is the contention of the assessee that the interest on such securities should not be taxed during this year since it has sold the said securities in the next year before the due date of payment of interest and has offered for capital gain tax and that no interest has been received during the year on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate that the alleged power purchase price of MSEB Rs. 2 per unit considered by the AO is an estimate/guess work and without any evidence/support. 9.5 Without prejudice, the CIT (A) failed to appreciate that in case the rate of purchase of power by MSEB is to be considered as market value then the rate of Rs. 2 per unit is erroneous. 13.1 During the year under consideration the assessee has shown an income of Rs. 8.29 crores as profit of Vikram Power Unit and claimed the same as exempt under section 80IA. The Assessing Officer held that the Vikram Power Unit is not a separate industrial undertaking and is only a part of Vikram Ispat unit and represents an extension of the said Vikram Ispat unit by backward integration. The Assessing Officer further observed that the basic requirement for generation of power of Vikram Power unit is steam which is taken from Vikram Ispat unit. Thus, the Assessing Officer held that for the year under consideration, the Vikram Power unit did not have independent boilers to generate its own steam and was completely dependent on Vikram Ispat unit for the same. Accordingly, the Assessing Officer disallowed the claim of the assessee under section 80IA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso not the fact that the assessee has sold any power to KSEB in any future year. The CIT(A) asked the assessee to submit an alternative calculation based on the average actual per unit cost of power purchased from KSEB by the paper division. According to this calculation, the average price for the unit of power consumed worked out to Rs. 4.74 per unit. The assessee was asked to furnish copies of electricity bills received for one month on a sample basis. On examination of the bills, the CIT(A) directed the Assessing Officer to examine the electricity bills on which the assessee has based its working of the transfer price and recalculate the price to be adopted after excluding elements of tax or levy which may form part of the total amount billed. After excluding such amount, the price per unit of power would be determined which would be adopted as the transfer price of the power generated by the assessee. The other important issue which the CIT(A) found that in the profit and loss account of the industrial undertaking there is no mention about indirect costs such as managerial remuneration, administrative overheads, etc., which also needs to be considered for the purpose of arrivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accrual basis is upheld by the appellate authorities." 16.1 We have heard the learned senior counsel as well as the learned DR and considered the relevant material on record. The ld Sr. counsel has submitted that since the proportionate premium on debenture redemption has been allowed by this Tribunal in the earlier years; therefore, this issue has become infructuous and may be dismissed as not pressed. 17. We find that in the earlier year, this Tribunal has allowed proportionate premium on debenture redemption and therefore, only proportionate amount is to be allowed and accordingly, this ground raised by the assessee has become infructuous and hence the same is dismissed, being not pressed. 18. The assessee has also filed the following additional grounds: 1. On the facts and circumstances of the case and in law, the Appellant prays that the Assessing Officer be directed to: i. Exclude from taxable profits, the sales tax exemption benefit of Rs. 34 crores, which is included in Sales and which is taxed in the assessment order as part of profits of the business; and ii. To treat the same as capital receipt not chargeable to tax. 2. On the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax v. Sutlej Industries Ltd. reported in 325 ITR 331. He has also referred various decisions of this Tribunal in support of his contention. 22.2 Though, on principle, we find merits in the contention of the ld Sr counsel for the assessee; however, since the issue has been raised for the first time before us and therefore, the same is required to be considered by the Assessing Officer. Accordingly, we remit this issue to the record of the Assessing Officer for considering the same in the light of decisions relied upon by the ld Sr counsel for the assessee. ITA No.1865/Mum/2003 (AY 1998-99) (By the revenue) 23. The revenue has raised following grounds in this appeal: 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow depreciation in respect of Intake Well, Telphers, Storage Tank, Lagoon Tank, Effluent Tank holding them as plant ignoring the fact that these are integral part of the building and, as such, rate of depreciation is allowable at the rate applicable to building. 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal expenses are incurred on petition related to such land acquired years before and, therefore, are in the nature of capital expenditure. 9. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance made u/s.43B(b), (c) and (d) of the Incometax Act ignoring the provisions of section 43B of the Act as a whole and without taking into consideration the harmonious construction of various provisions of the said section. Further, the meaning of the word 'payable', as applicable to the provisions of section 43B(b), (c) and (d) was also ignored. 10. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition of Rs. 1,35,34,273/- being capital expenditure on project expenses disallowed on the ground that the said new project is a part of the assessee's business, ignoring the fact that disallowance made by the Assessing Officer was on account of capital nature of expenditure. 11. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance expenses of Rs. 48,89,340/- on rural development and medical help, expenses by way of help of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not qualify for deduction as revenue expenditure u/s.36(1)(iii) of the I.T.Act. 17. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance u/s.40A(3) of Rs. 22,502/-, being 20% of cash payments, without justifying that the same falls under the exceptions provided under rule 6DD(j) of I.T.Rules, 1962. 18. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition being profits of the USA Branch of M/s.Birla Consultancy and Software Services without appreciating that the transaction is not at a arms length and the branch is not functioning as an independent unit. 19. On the facts and in the circumstances of the case and in law, the CIT(A) erred in allowing development allowance on the increased cost of the plant and machinery due to exchange fluctuation without appreciating the provisions of section 32A of the Income-tax Act in as much as the deduction u/s.32A is to be allowed if the 'asset' is owned by the assessee and is wholly used for the purpose of the assessee's business in respect of the year in which the asset is acquired or installed or first put to use and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No.7593/Mum/97 A.Y. 1990-91, ITA No. 1523/M/97 A.Y. 1993-94, ITA Nos 939/M/93 and others for A.Y 1986-87 to 89-90 and ITA no.3698 and 3100/M/99 for A.Y 1994-95. The assessee has filed copies of the Tribunal orders in the paper book submitted by it. The id DR was fair enough to affirm the contention of Id. AR. We have carefully perused the above Tribunal orders and found that this issue is decided in favour of the assessee by the Coordinate Benches. Respectfully, following the above orders of the Co-ordinate Benches, this issue is decided in favour of the assessee and against the revenue. Therefore, ground no.1(a) of the revenue is rejected." 33.2 We further note that the revenue did not press this issue before the Hon'ble High Court in the appeal filed for Assessment Year 1995-96 as the question 'k' raised before the Hon'ble High Court was dismissed being not pressed. Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue in favour of the assessee and against the revenue." 25.1 Following the earlier order of this Tribunal, we decide this issue in favour of the assessee and against the revenue. Accordingly, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee by relying upon the decision in the assessee's own case for Assessment Year 1990-91. The appeal filed by the revenue against the order of the ITAT for AY 1990-91 has been dismissed by this Court on the ground of delay. Thus, the order of the ITAT for AY 1990-91 has attained finality. In these circumstances, questions (h) and (I) cannot be entertained." 35.3 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue in favour of the assessee and against the revenue." 27.1 Since the issue is covered in favour of the assessee and against the revenue by the earlier orders of this Tribunal; accordingly, we decide this issue against the revenue and in favour of the assessee. 28. Ground no.3 raised by the revenue is regarding depreciation on false ceiling. 29. After considering the rival submissions and relevant material on record, we note that this issue has been considered and decided by this Tribunal for the earlier years. For the assessment years 1996/97 and 1997-98, this Tribunal has considered and decided this issue in paras 36 to 36.2 as under: "36 Ground no.4 raised by the revenue reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e." 29.1 Following the earlier orders of this Tribunal in assessee's own case, we decide this issue against the revenue and in favour of the assessee. 30. Ground no.4 in revenue's appeal is regarding proportionate premium payable on redemption of bonds. 30.1 This issue is common in both the appeals. Since the proportionate premium payable on redemption of bonds has been allowed by this Tribunal for the earlier years; therefore, by following the earlier orders of this Tribunal for the Assessment Years 1996-97 and 1997-98, this Tribunal has considered and decided this issue in paras 38.1 to 38.3 as under: 38.1 We have heard the ld DR as well as the Sr ld counsel for the assessee and considered the relevant material on record. The Sr ld counsel for the assessee has submitted that the amount of Rs. 6.42 croroes mentioned in this ground is not correct and the correct amount is Rs. 5.46 crores. 38.2 At the outset, we note that this issue has been considered and decided by the Tribunal in assessee's own case for the Assessment Year 1995-96 in paras 45 to 45.1 as under: "45. The issue of disallowance of proportionate premium payable on redemption of bonds has been deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. 'A.R'. Therefore, to maintain reasonable consistency on similar facts and circumstances of the case, the issue is decided in favour of the assessee and against the revenue as the principle of consistency has been upheld on plethora of decisions." 39.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, we decide this issue against the revenue and in favour of the assessee." 31.2 Following the earlier order of this Tribunal, we decide this issue against the revenue and in favour of the assessee. 32. Ground no. 6 and 7 regarding foreign travelling expenses. 32.1. We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 42 to 42.2 as under: "42 Ground nos 11 to 14 raised by the revenue read as under: 11. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of foreign travel exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (at page 483) has held as under: 'In the instant case, we do not find any serious controversy in regard to the fact that the expenditure in question was business expenditure. The only contention of the revenue is that it is an expenditure of capital nature because the purpose of the visit of the managing director was to inspect and to take a trial run of the capital equipment purchased by the assessee company. In other words, according to the Revenue, the visit related to the purchase of' the machinery which was a capital equipment and as such, this expenditure should form part of the price of the machinery and should not be treated as a revenue expenditure. We have carefully considered the above submission. In a given case, the above contention of the revenue may carry weight and require serious consideration but that is not so in all cases. It would depend on the facts and circumstances of each case. In the instant case, there is no dispute about the fact that the visit of the Managing Director was for the purpose of business. There is also no dispute that there was a running business It was not a case of business which was in the process of establishment. The business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaken by the aforesaid persons and the CIT(A) and AO did not dispute those facts It was also submitted that the CIT(A) should have called for the required details and ascertained views of the Assessing Officer and allowed the claim if the purpose of visit is found to be wholly and exclusively for the purpose of business. 10.5 We have considered the submissions of the learned counsel for the assessee. We have also perused paragraphs at page 6 to 12 of the CIT(A's order and we find that in respect of additions sustained by the CIT(A), no details of the purpose of visits are available. Under these circumstances, we are of the view that the disallowances sustained by the CIT(A) is proper and calls for no interference. Consequently, Ground No. 9 is partly allowed. 52.1 The Issue 'pertaining to foreign travel expenses has been considered and adjudicated from para 10 to 10.5 of this order while adjudicating ground No.9 of assessee's appeal. Accordingly groimd:No.7 (a) and (b) are disposed as per the observation contained in 10 to 10.5 of this order. The observations and findings therein are applicable to this ground of appeal." 42.2 Accordingly, following the earlier or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own case for the AY 1995-96 in para 53.1 and 53.2 as under: 53.1. As far as ground No.8 is concerned, it was brought to the notice of the Bench that the issue is covered in favour of the assessee, by various decisions of the Co-ordinate Bench in the assessee's own case and in the appeal filed by the revenue for the A.Y 1993-94. The issue has been decided in favour of the assessee vide para 41 of the order for the A.Y 1994-95, in assessee' own case 'vide ITA No.3698and3100/M/99. 1994-95, order dated 13/2/2009. 41. The last issue in this appeal pertains to disallowance u/s 43B(b), 43B(c) and 43B(d). The claim of the assessee is that these payments did not become payable during the year and therefore, in view of the Andhra Pradesh High Court judgment in the case of Srikakollu Subbarao and Co. and Ors vs. UOI and Ors 173 ITR 708 (AP) no disallowance can be made u/s. 43B. On the other hand, according to the assessing officer, whether the amount has become payable or not, the disallowance has to be made by virtue of Explanation 2 to section 43B of the Act. We find that the contention of the assessee has been upheld by the Tribunal in its order for assessment years 1986-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in confirming the disallowance of Rs. 28,89,242/- treating the same as expenditure related to new project/capital expenditure. In grounds of appeal No. 14, the assessee has taken an alternate ground that if the above expenditure is treated as capital in nature then depreciation should be allowed to the assessee as per law. Similarly in grounds of appeal No. 15, the assessee has further submitted that out of the total expenditure of Rs. 8,89,242/-, an amount of Rs. 25,72,217/- relates to business already in existence and, therefore, an amount of Rs. 25,72,217/- should be allowed as business expenditure. 12.1 Facts of the case, in brief, are that the Assessing Officer has disallowed an amount of Rs. 28,89,242, the details of which are as under: Sl. No Name Amt (Rs) Total Amt (Rs) (a) VC Fees for feasibility report of captive power plant Coal Dashing plant 91,430 200000 291430 (b) NVC Feasibility report of captive power plant Fee for "TEPS for splitting location on grinding units. 91430 225000 316430 (c) V SC Fees for feasibility report of power plant 137140 (d) Chem Retainer ship fees App. Fees Advt project profile etc Foreign travel exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was common management and contro4 common fluids, inter-connection, interdependence of units on each other, it was held that the assessee was carrying on "same" business. 117. The learned DR relied on his argument with reference to ground No. 14 arid inter-alia relied on. the decision of the Hon'ble Bombay High Court in the case of Ciba of India Ltd. V. CIT (202 ITR 1). 118. We have considered the submissions of both the parties and have also perused the records of the case. As noted earlier, the Tribunal has held that test of same business is fulfilled in the present case. From the AO's observation, as noted earlier, it is clear that he has not disputed that the expenditure was for expansion of business. The assessee deserves to succeed in view of various judicial pronouncements noticed with reference to ground No. 14 and further discussions with reference to Ground No. 18(1990-91). These grounds are allowed.' 12.4 Respectfully following the decision of the Tribunal in assessee's own case and considering the fact that in the A.Y. 1993-94 where the Tribunal has held that the business is one and the same business for which department has not gone in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s own case for the AY 1995-96 in para 19 to 20.1 as under: 19. Ground No. 15 of the assessee reads as follows:" The learned CIT(A) erred on facts and in law and/or erred in misdirecting herself on facts and in law in upholding the section of Assessing Officer in disallowing other business expenses of Rs. 2,72,950 as detailed hereunder treating the same as non-business expenses. Grasilene Exp. By various vicarious officers PULP/M 31,528 Rural Development Exp. HPF 81,304 Exp on fruits 19820 Exp. At Delhi office 5061 Petty Exp CHEM 710 25,591 Medical help to others PAC 58,100 Medical help to others CS MEMBRANCE CELL 15,000 Medical help to others BTM 46,427 Nagar Veopar Mandal 15,000 2,72,950 The appellant prays that the expenses of Rs. 2,72,950 be allowed as revenue exp u/s 37(1) of the act or otherwise holding them as having been incurred for the appellant's business." 19.1 In AY 1994-95 in assessee's own case in ITA No. 3698/Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer in disallowing exp. by way of help of Rs. 1,15,564 as detailed hereunder: Sundry help to employee and Dependents. 83,964 Literary help to journalists 29,850 Financial and medical help 1,750 1,15,564 The appellant prays that the disallowance made in respect of. exp. by way of help be deleted and it be held that the same is allowable u/s 37(1)/28 of the Act.' 20.1 In AY 1994-95 in assessee's own case (supra), the issue with regard to expenses on literary help to journalists was decided against the assessee holding that the same was not wholly and exclusively for the purpose of business of the assessee. With regard to help to employees and financial and medical help, in AY 1994-95 in assessee's own case (supra), this Tribunal allowed the claim of the assessee. Respectfully following the decision of the Tribunal, we direct that sundry help to employee and other dependents and financial and medical help expenses be allowed while literary help to journalists be disallowed. Ground No. 16 is, thus, partly allowed. 47.2 Accordingly, following the earlier orders of the Tribunal in assessee's own case, the issue of other business expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has been decided by the Tribunal in assessee's own case for the AY 1995-96 in paras 23.1 and 23.2 as under: 23.1 In AY 1994-95 in assessee's own case (supra), this Tribunal dealt with an identical issue and held as under:- "17. Grounds of appeal No. 20 relates to the order of the CIT(A) in confirming the disallowance of Rs. 91,182/- by the Assessing Officer on account of rail/air fare of persons connected with the company's business as non business expenditure. 17.1 After hearing both the sides, we find the Assessing Officer disallowed an amount of Rs. 91,182/- being the expenditure on rail/air fare of different persons other than the employees of the company on the ground that the same is non business expenditure. In appeal, the learned CIT(A) confirmed the addition. Aggrieved with the order of CIT(A) the assessee is in appeal before us. 17.2 We have considered the rival arguments. It is the settled proposition of law that for claiming any expenditure as business expenditure, the onus is always on the assessee to substantiate with evidence to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. 37. Next issue regarding rural development and medical help. 38. We have heard the ld DR as well as Ld Sr counsel for the assessee and considered the relevant material on record. The ld Sr counsel has relied upon the following decisions: i) Srivenkat Satyanarayan 223 ITR 101 (SC) ii) Mysore Kirloskar - 166 ITR 836(Kar) iii) Eastern Invesgtment 20 ITR 170 (Mad) iv) HPCL 96 ITD 186 (Mum) 38.1 The ld DR has relied upon the order of the Assessing Officer. We note that the expenditure has been incurred by the assessee for rural development and for the benefit of the people residing nearby the plant area and other people directly and indirectly connected with the business of the assessee. 39. Once the expenditure has been incurred, which is in connection with the business of the assessee, then the same is allowable in view of the decision of the Hon'ble Supreme Court in the case of Srivenkat Satyanarayan (supra) as well as the decision of the Hon'ble Karnataka High Court in the case of Mysore Kirloskar and the decision of the Hon'ble Madras High Court in the case of Madras Refinery (supra) as relied upon by the ld Sr counsel for the assessee. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee." 40.2 Therefore, following the earlier order of this Tribunal, we decide this issue in favour of the assessee and against the revenue. 41. Ground nos.13 - 14 regarding disallowance u/s 80-O 41.1 This issue of revenue's appeal does not arise from the impugned order of the ld Commissioner of Income Tax(Appeals) because the ld Commissioner of Income Tax(Appeals) has allowed the deduction on the basis of net receipts instead of gross receipts. Accordingly, there is no grievance to the revenue against the findings of the ld CIT(A) and hence this issue is dismissed. 42. Ground no.15 is regarding exclusion of excise duty and sales tax from total turnover for the pur4psoe of deduction u/s 80HHC. 42.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 50 to 50.2 as under: "50 Ground no.24 raised by the revenue reads as under: 24. On the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding exclusion of excise duty from total turnover for the same purpose. Second aspect of the matter regarding exclusion of excise duty from total turnover for computing deduction u/s 80HHHC is covered in favour of the assessee by the judgment of Hon'ble Jurisdictional High Court rendered in the case of Sudarshan Chemicals Industries Ltd(supra). Respectfully following the same, this aspect of the matter is decided in favour of the assessee. Regarding the first aspect of the matter i.e., regarding exclusion of inter-division transfer from total turnover, we find that this issue is covered in favour of the assessee by the judgement of the Tribunal rendered in assessee's own case for A.Y. 1990-91 to 1992-93. In para No. 152 of the judgement, this has been held by the Tribunal that inter-division transfer has to be excluded as that would amount to double addition in the figure of total turnover. Respectfully following this judgment, this aspect of the matter is also decided in favour of the assessee. This ground No. 26(ii) stands allowed. 22.2 Respectfully following the decision of the Tribunal in assessee's own case we set aside the order of the CIT(A) and direct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further submitted that the appeal filed by the revenue did not press this issue before the Hon'ble High Court; accordingly, the order of the Tribunal has attained the finality. 52.3 We note that this issue has been considered and decided by the Tribunal in assessee's own case for the AY 1994-95 in paras 35.6 as under: "35.6 We have considered the rival submissions and perused the material placed before us. It is not in dispute that the facts and circumstances are identical to that of the assessment year 1993-94. The Tribunal in the year took a decision in favour of the assessee. The Tribunal in its findings had met with each and every objection of the assessing officer with regard to the business carried on by the assessee. the management pattern, funds employed, maintenance of accounts, etc. and came to the conclusion that having regard to the common management and control, common funds, inter-connection and inter-dependence, etc. of the units on each other, the assessee was carrying on "same business" and, therefore, payment of interest would be a revenue expenditure. We find the Hon'ble Supreme Court in the case of Dy. Commissioner of income Tax vs. Core Health ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the assessee. 45. Ground no.18 is regarding disallowance of profits of the USA branch of M/s Birla consultancy and software services. 45.1 We have heard the ld DR as well as the ld Sr counsel for the assessee and considered the relevant material on record. At the outset, we note that this issue has also been considered by this Tribunal in the earlier years in assessee's own case. For the assessment years 1996 - 97 and 1997-98, this Tribunal has considered and decided this issue in paras 54 to 56 as under: "54. Ground no.28 raised by the revenue reads as under: 28. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition being profits of the USA Branch of M/s.Birla Consultancy and Software Services without appreciating that the transaction is not at a arms length and the branch is not functioning as an independent unit. 54.1 The assessee claimed that the profit of USA branch of M/s. Birla Consultancy and Software Services are not taxable in India as per DTAA between Indo USA. The Assessing Officer had made an addition stating that the income has to be taxed in both the countries and the benefit as per para 7 of DTAA i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee and considered the relevant material on record. The ld Sr counsel for the assessee has submitted that the Assessing Officer has disallowed the claim of the assessee in the 5th year of the claim. He has further contended that in the earlier year, the claim of the assessee was allowed by the Assessing Officer and therefore, in view of the decision of the Hon'ble Jurisdictional High Court in the case of Paul Brothers, reported in 216 ITR 548(Bom), the claim of the assessee cannot be disallowed for this year with out disturbing the earlier assessment. 48. We find force in the contention of the ld Sr counsel that when the claim of the assessee was allowed in the earlier year, then in the 5th year of the claim, the Assessing Officer cannot disallow the claim of the assessee without disturbing the earlier assessments. Accordingly, in view of the decision of the Hon'ble jurisdictional High Court, we do not find any reason to interfere with the order of the ld Commissioner of Income Tax(Appeals), qua this issue. 49. Ground no.21 is regarding exchange rate fluctuation loss. 50. We have heard the ld DR as well as the ld Sr counsel for the assessee and considere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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