9911796707
TMI Blog2020 (4) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer and learned Commissioner (Appeals) in including the amount of Rs.97,57,000/- received from sale of scrap in the total turnover for computing the deduction under section 80HHC of the Act. Briefly, the facts are that assessee, a resident company, is engaged in the business of manufacturer of pharmaceuticals, bulk drugs and chemicals. For the assessment year under dispute assessee filed its return of income on 31st October, 2002 declaring total income of Rs.102,48,80,810/-. In course of assessment proceedings, the Assessing Officer while examining assessee's claim of deduction under section 80HHC of the Act noticed that the assessee has excluded the amount of Rs.97.57 lacs which represent the amount received from the sale of scrap from the total turnover while computing the deduction under section 80HHC of the Act. Referring to clause (ba) of explanation below section 80HHC (4A), the Assessing Officer opined that amount received towards sale of scrap is not one of the items which can be excluded from the total turnover while computing deduction under section 80HHC of the Act. Thus, ultimately rejecting explanation of the assessee, the Assessing Officer included the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nover. Keeping in view the ratio laid down by the Hon'ble Supreme Court in the aforesaid decision, the Tribunal while deciding identical issue in assessee's own case for Assessment Year 2001-02 in ITA No. 3266/Mum/2005 dated 04.05.2018 has restored the issue to the Assessing Officer for considering afresh keeping in view the ratio laid down by the Hon'ble Supreme Court in the decision referred to above. Facts being identical, respectfully following the decision of the Tribunal in assessment year 2001-02, as referred to above, we restore the issue to the Assessing Officer for fresh adjudication with similar direction. Needless to mention, the Assessing Officer must afford reasonable opportunity of being heard to the assessee before deciding the issue. 7. In ground No. 4, assessee has challenged the decision of the Revenue authorities in holding certain income as not derived from the profits of business, hence, not eligible for deduction under section 80HHC of the Act. 8. Briefly, the facts are, during the assessment proceedings the Assessing Officer noticed that while computing the deduction under section 80HHC of the Act, the assessee has included certain items of income in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and Revenue since the preceding assessment years. While deciding identical issue in Assessment Years 1998-99 to 2000-01, the Tribunal restored the issue to the Assessing Officer for examining assessee's claim. It is the contention of the learned AR that while giving effect to the direction of the Tribunal in these assessment years, the Assessing Officer has actually allowed assessee's claim in respect of other income except miscellaneous income. We have also noticed, while deciding identical issue in assessee's own case for Assessment Year 2001-02 in ITA No 3266/Mum/2006 dated 04.05.2018, the Tribunal following its earlier decision has restored the issue to the Assessing Officer for fresh adjudication. Facts being identical, keeping in view the decision of the Tribunal in assessee's own case in preceding assessment years, we restore the issue to the Assessing Officer for fresh adjudication with similar direction, except the miscellaneous income of Rs.3.47 lacs, which the assessee has conceded before us. If as stated by the assessee, assessee's claim has been accepted in preceding assessment years, there would be no valid reason for not accepting assessee's claim in the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case as well as the decision of the Tribunal in Assessment Year 2001-02, we hold that learned Commissioner (Appeals) was justified in restricting the disallowance to Rs. 2 lacs. Accordingly, the decision of learned Commissioner (Appeals) on the issue is upheld by dismissing the ground raised. 18. In ground No. 2, the Revenue has challenged the deletion of disallowance of depreciation on share issue expenses incurred and capitalized in earlier assessment years. 19. Briefly, the facts are, in the Assessment Year 1984-85, the assessee had claimed share issue expenses amounting to Rs.62,55,639/-. Out of which the assessee has capitalized in Assessment Year 1984-85 a sum of Rs.22,67,281/- and in Assessment Year 1986-87 a sum of Rs.16,42,617/- and claimed depreciation thereon. In identical manner, the assessee had also claimed depreciation in the impugned assessment year. However, like in the past assessment years, the Assessing Officer disallowed assessee's claim of depreciation. When the issue came up for consideration before learned First Appellate Authority, he found that while deciding identical issue in the preceding assessment year, i.e. Assessment Year 1984-85, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the decision taken by the First Appellate Authority in assessee's own case in Assessment Years 2001-01 and 2001-02, learned Commissioner (Appeals) deleted the disallowance made by the Assessing Officer. 23. We have considered rival submissions and perused the materials on record. As could be seen from record, the assessee follows calendar year as the accounting period. In respect of bad debts pertaining to the months of January to March 2002, the decision to write off bad debts was taken after end of March 2002 and correspondent entries were passed in the books of account post March 2002. However, it is the claim of the assessee that bad debts written off pertained to previous year ending on 31st March 2002. This fact has not been disputed by the Assessing Officer. Only because the bad debts were not actually written off during the current year but were written off after March 2002, the Assessing Officer disallowed the same. Notably, while deciding identical issue in assessee's own case in Assessment Years 2000-01 and 2001-02 (supra), the Tribunal following the decision of the Hon'ble Calcutta High Court in the case of Turner Morrison And Co. Ltd. vs. CIT (2000) 245 ITR 724 (Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Year 2001-02, it is noticed that the Tribunal after following its earlier decision has directed the Assessing Officer to allow deprecation after reducing the WDV of FPU assets from the block of assets. Facts being identical, respectfully following the decisions of the Tribunal in the preceding assessment years, we uphold the order of learned Commissioner (Appeals) on this issue. Ground raised dismissed. 27. In ground No. 5, the Revenue has challenged deletion of disallowance made on account of closing stock of diesel, oil and coal. 28. Briefly, the facts are, during the course of assessment proceedings, vide letter dated 2.12.2004 assessee claimed deduction for an amount of Rs.57,32,853/- representing the value of stock of coal and diesel, oil, which was disallowed in Assessment Year 2001-02. The Assessing Officer observed, assessee's claim is not acceptable as the aforesaid items have been consumed in this year. Nevertheless, while allowing the amount of Rs.57,32,853/-, the Assessing Officer disallowed the closing stock of coal and diesel as on 31.3.2002 amounting to Rs.58,25,237/-. Resultantly, he made a net disallowance of Rs.92,384/-. The assessee challenged the aforesaid dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated at Bangalore which was eligible for deduction under section 80IB of the Act. In the year under consideration, the assessee claimed an amount of Rs.2,29,31,050/- towards deduction under section 80IB of the Act in respect of NIP. In course of assessment proceedings, it was submitted by the assessee that till October, 2001, the management operations of SBPI was at Bangalore and not that of assessee. Therefore, the head office general and administrative expenses for the period 01.04.2001 till October, 2001 cannot be allocated to the NIP. Rejecting the aforesaid contention of the assessee, the Assessing Officer held that head office general and administrative expenses for the period 01.04.2001 to 31.03.2002 should be allocated to NIP Bangalore. Accordingly, he allowed deduction under section 80IB of the Act for an amount of Rs.79,44,813/-. The assessee contested part disallowance of deduction claimed under section 80IB of the Act before learned Commissioner (Appeals). After considering the submissions of the assessee in the context of facts and materials on record, learned Commissioner (Appeals) accepted assessee's working of deduction under section 80IB of the Act at Rs.2,21,62,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and the recovery of demand is stayed. The assessee has also not debited any amount to the profit and loss account towards the interest paid or payable to the government. Thus, ultimately the Assessing Officer disallowed assessee's claim. The assessee contested the aforesaid decision before learned Commissioner (Appeals). After considering the submissions of the assessee and following the decision of the Tribunal in assessee's own case in Assessment Years 1986-87 to 1995-96, learned Commissioner (Appeals) allowed deduction of interest on DPEA liability for the period 01.04.2001 to 31.03.2002. 36. We have considered rival contentions and perused the materials on record. Undisputedly, following the decision of the Tribunal in assessee's own case in Assessment Years 1986-87 to 1995-96, learned Commissioner (Appeals) has allowed assessee's claim with regard to interest on DPEA liability for the period 01.04.2001 to 31.03.2002. The aforesaid factual position remains uncontroverted. Even, in the latest order passed by the Tribunal for Assessment Year 2001-02 in ITA No. 3266/Mum/2005 dated 04.05.2018, it has been held that interest on DPEA liability is allowable. We have also noticed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing it as profit of business. 39. We have considered rival submissions and perused the materials on record. As could be seen, while deciding identical issue in assessee's own case in Assessment Year 2001-02 in ITA No. 3266/Mum/2005 dated 04.05.2018, the Tribunal has restored the issue to the Assessing Officer for deciding afresh keeping in view the decision of Hon'ble Supreme Court in the case of CIT vs Excel Industries Ltd., (2013) 358 ITR 295 (SC). Insofar as the issue of deduction under section 80HHC of the Act relating to advance license benefit, it has also been restored back to the Assessing Officer for deciding afresh. It has been submitted before us by the learned AR that while giving effect to the order of the Tribunal in Assessment Years 1998-99 to 2000-01, the Assessing Officer has allowed assessee's claim. Be that as it may, since in the preceding assessment years the issue has been restored back to the Assessing Officer for afresh adjudication and there is no difference in the factual aspects, respectfully following the decision of Tribunal in Assessment Year 2001-02 as well as earlier assessment years, we restore the issue to the Assessing Officer for afresh adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t services. Thus, he ultimately held that further estimation of mark-up at 15% is not necessary. Accordingly, he deleted the adjustment of Rs.69,67,405/-. 43. We have considered rival submissions and perused the materials on record. As could be seen from the ground raised by the Revenue, only the decision of learned Commissioner (Appeals), vis-à-vis the mark-up of 15% has been challenged. whereas, the Revenue has not challenged either the allocation of manpower or earning of mark-up from provision of global procurement services at 66.67%, as has been worked out by the learned Commissioner (Appeals). Further, the factual finding of learned Commissioner (Appeals) with regard to mark-up of 66.15% on indirect cost has not been challenged. Further, from the material available on record it is noticed that the employees of the Procurement Department were exclusively engaged in managing procurement activities of the assessee till 31st December, 2001. Provision of global procurement services to AEs started only with effect from 1st January, 2002. The aforesaid factual position has not been controverted by the Revenue through any supporting evidence brought on record. Further, the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
