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TMI Blog2018 (6) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ken up first for disposal. 4. Ld. Counsel for the assessee submitted that this appeal emanated from an order passed by the ld. Assessing Officer, pursuant to the directions of this Tribunal. As per the ld. Authorised Representative, ground No.2 was on disallowance of share issue expenditure of 73,31,421/-. Submissions of the ld. Authorised Representative was that this Tribunal had directed the ld. Assessing Officer to reconsider the claim based on evidence submitted by the assessee. Ld.Authorised Representative admitted that assessee was unable to provide evidence to show that the funds received through increase in share capital were utilized for the purpose of extension of its industrial undertaking or for setting up a new industrial unit. 5. We have considered the contentions of the ld. Authorised Representative and perused the orders of the authorities below. Ld. Assessing Officer had disallowed 73,31,421/-, being share issue expenditure claimed by the assessee u/s.35D of the Income Tax Act, 1961 (in short ''the Act''). This Tribunal had through its order dated 24.03.2009 in ITA No.999/Mds/2007, remitted this issue back to the file of the ld. Assessing Officer for examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the assessee before ld. Commissioner of Income Tax (Appeals) was that such expenditure was incurred wholly and exclusively for the purpose of business and being a genuine business outgo, was required to be allowed u/s.37 of the Act. However, ld. Commissioner of Income Tax (Appeals) did not accept this contention. Argument of the ld. Authorised Representative before us is that, if the prior period expenditure is not allowed for the impugned assessment year, corresponding allowance should be given for the earlier years to which such expenditure related to. We are afraid, we cannot accept this contention. If assessee was of the opinion that expenditure related to an earlier year, it ought have filed claims in the respective years. It is not disputed that the expenditure of 718,33,815/- did not relate to the impugned assessment year. Hence, in our opinion, the claim was rightly disallowed. We therefore find no reason to interfere with the orders of the lower authorities. Ground No.2 of the assessee stands dismissed. 13. Vide its effective ground No.3, grievance of the assessee is that lease rent deposits which were written off were not allowed as expenditure. 14. Ld. Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred on behalf of its customers. No part of the claim was on any write-off of rental deposits. That apart, the EMD written off was not allowed by the Tribunal. Ld. Authorised Representative also place reliance on an decision of Delhi Bench of the Tribunal in the case of Fab India Overseas P. Ltd vs. CIT (ITA No.199/ Del/2012, dated 28.06.2013). A perusal of the said order show that security deposits which were written off were given for a lease which never went through. The Tribunal had held that there was no binding agreement between assessee and the lessor, since the lease deed was not registered and held that security deposit written-off was a business loss. However, in the case before us, there is nothing on record to show that rental deposits written off by the assessee pertained to any lease which had not materialized. In the circumstances, we do not find any reason to interfere with the orders of the lower authorities. Ground No.3 of the assessee stands dismissed. 17. Vide its effective ground No.4, grievance of the assessee is on a disallowance of software expenditure of 77,76,684/- claimed by it as Revenue outgo. 18. We have considered the rival counsel. Assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sehold premises. However, ld. Assessing Officer allowed the claim only to the extent of 10% being rate of depreciation applicable for building. The matter had reached this Tribunal, in an earlier round of proceedings and this Tribunal through its order dated 25.05.2009 in ITA No.1965 & 1966/Mds/08, had held as under:- "There is no doubt that as per amendment in Section 32, by insertion of Explanation (1), capital additions made in leasehold buildings are to be treated as if the said building was owned by the assessee. However, the exact nature as to the claim of the assessee that they are temporary structures has to be examined. In this view of the matter, we remit this issue to the file of the Assessing Officer to give a finding thereon. The assessee should be given adequate opportunity of being heard''. When the issue was taken afresh by the ld.AO, latter required the assessee to provide the details of the expenditure. However, assessee was unable to bring in any evidence to prove that the expenditure incurred was for any temporary structure. Even before the ld. Commissioner of Income Tax (Appeals) assessee failed to support its claim that the expenditure was incurred for erec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uity to its employees. No doubt, this Tribunal had for assessment year 2002-03 remitted the issue back to the ld. Assessing Officer for examining the facts and giving necessary relief to the assessee. However, for the impugned assessment year, it is not disputed that the payments to LIC were not a provision but made under the gratuity scheme. We are therefore of the opinion that assessee was eligible to claim such deduction. Disallowance of 75,01,826/- is deleted. Ground No.7 of the assessee is allowed. 27. Now, we take up appeal of the assessee for the assessment year 2004-05 in ITA No.1226/CHNY/15. 28. Effective ground No.2 of the assessee is on disallowance of share issue expenditure of 79,65,708/-. This is similar to the ground No.2 raised by the assessee in its appeal for the assessment year 1999-2000 in ITA No. 1223/Mds/2015. We have already confirmed the order of the ld. Commissioner of Income Tax (Appeals) on this issue at para 5 above. Fact situation being the same, ground No.2 of the assessee for impugned assessment year is also dismissed. 29. Vide its effective ground No.4, grievance raised by the assessee is on a disallowance of 75,52,677/- being gratuity payments to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e done, since deduction u/s.10A of the Act was to be given on a stand alone basis. Reliance was placed on the judgment of Hon'ble Apex Court in the case of CIT vs. Yokogawa India Ltd, (391 ITR 274). 37. Per contra, ld. Departmental Representative fairly agreed that the issue stood covered in favour of the assessee. 38. We have heard the counsels. By virtue of the judgment of Hon'ble Apex Court in the case of Yokogawa India Ltd, (supra) which affirmed the judgment of Hon'ble Karnataka High Court, in the same case, deduction u/s.10A of the Act has to be considered on stand alone basis without setting off of loss another unit. Accordingly, we direct the ld. Assessing Officer to allow the claim made by the assessee u/s.10A of the Act without setting off such loss. Ground No.2 of the assessee stands allowed. 39. Vide its effective ground No.6, grievance raised by the assessee is on disallowance of expenditure of 74,99,373/- claimed for improvement of leasehold property was treated as capital outgo. This is similar to ground No.4 raised by the assessee in its appeal for assessment year 2003-04 in ITA No. 1225/Mds/2015. We have already confirmed the order of the ld. Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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