9911796707
TMI Blog2022 (2) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the asset side of the balance sheet amounts to write off and deduction u/s. 36(i)(vii) is available - we notice that assessee has charged the unrecovered portion to the profit and loss account and reduced the amount in the debtors balances, therefore the facts are exactly similar to the facts in the above case, accordingly, we allow the claim of the assessee. Disallowance of club membership fees - HELD THAT:- Aforesaid issue raised in the assessment year 1993-94 is covered in favour of the assessee by the decision of the jurisdictional High Court in Otis Elevator CO. (India) Ltd.,[ 1991 (4) TMI 53 - BOMBAY HIGH COURT] Respectfully following the same, we dismiss the ground raised by the department. Interest received from the Income-tax Department - HELD THAT:- As in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] issue decided in favour of assessee. Deduction u/s. 80HHC as claimed, interest received cannot be reduced from business profits as interest paid is higher than interest received - HELD THAT:- We observe from the record that identical issue in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] decided in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organizations - HELD THAT:- As in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] decide this issue in favour of the assessee. Disallowance of tax exempt dividend received - HELD THAT:- As in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] wherein the disallowance was restricted to 1.5% of the exempt income. As the facts and circumstances during the year under consideration are same, we direct the A.O. to restrict the disallowance to 1.5% of the exempt income Expenses towards family welfare activities, sewing centre, supply of seeds, teachers training, Agarbatti making, temple expenses, drama expenses, taxi hire for pulse polio, well dipping expenses, electrification of Gram Panchayat, distribution of material to children and rural sports, leprosy camp expenses, medical camps, balwadis, carpet weaving training, farmers training programme etc . - HELD THAT:- As in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] decided issue in favour of assessee. Exchange fluctuation loss - HELD THAT:- As in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] decided issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y short and such films do not add to the capital structure of the company. Expense incurred on implementation of software and ERP - HELD THAT:- We observe that this issue is dealt by the Hon ble Jurisdictional High Court in the case Raychem RPG Ltd [ 2011 (7) TMI 953 - BOMBAY HIGH COURT] - thus we do not find any infirmity in the order of the Ld.CIT(A) in allowing the claim of the assessee. Ground raised by the revenue are dismissed. We order accordingly. Excluding the excise duty and sales tax in the total turnover for computing the deduction u/s 80HHC - HELD THAT:- As decided in own case [ 2014 (10) TMI 994 - ITAT MUMBAI] no infirmity in the order of the ld. CIT(A) in directing the A.O. to exclude the amount of excise duty and sales tax from the total turnover of the assessee while computing deduction u/s 80HHC. Appropriated gross expenses of Head Office on an estimate basis and reduced the amount of eligible deduction u/s 80IA - HELD THAT:-As in own case the Coordinate Bench of the Tribunal [ 2014 (10) TMI 994 - ITAT MUMBAI] decided issue in favour of assessee. Deduction u/s 80IA in respect of profit of Vikram Power Unit allowed. Levy interest u/s 234D - HELD THAT:- Considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to such interest. 5. Deduction under section 80 HHC 5.1. The CIT (A) erred in not directing the AO to allow deduction under section 80 HHC, as claimed by the appellant. 5.2 The CIT (A) ought to have held that no amount of interest received is to be reduced from profit of the business for the purpose of calculating deduction u/s. 80 HHC. 5.3 Without prejudice to the above, the CIT (A) failed to appreciate that interest paid during the previous year amounting to ₹ 190,25,43,479/- was higher than the amount of interest received amounting to ₹ 54,65,73,130/- resulting in net interest paid and therefore amount of interest received during the previous year cannot be reduced from the profit of the business. 5.4 The CIT(A) ought to have held that rent ₹ 1,03,98,185/should not be reduced from the profit of the business, while calculating allowable deduction under section 80HHC. 5.5 The CIT(A) erred in not following the decisions of the Jurisdictional High Court in the cases of Bangalore Clothing Co. (260 ITR 371) and Alfa Laval India Ltd. (133 Taxman 740). 5.6 The CIT (A) erred in upholding the action of the AO in adjusting loss on export of traded goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of Alternate claim to allow deduction u/s. 43B clause (C), (d) and (e) and Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal and decided the issue in favour of the assesse and against the department, the ITAT has dismissed the plea of the assesse as otiose in the earlier year, therefore it becomes infructuous. On the other hand, Ld. DR has fairly accepted the submissions of the Ld.AR. 6. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02. While deciding the issue, the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "2. Rival contentions have been heard and perused the record. The assessee is engaged in manufacturing and sale various products. During the course of scrutiny assessment, the A.O. disallowed assessee's claim of deduction u/s 43-B of the Act in respect of liabilities disallowed in earlier years which are paid/written back in the current year. The A.O. found that in the computation of income an amount of ₹ 10.85 crores has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same be adopted in the case of assessee also. Ld.DR has relied on the orders of the lower authorities. 8.1 Further, Ld AR submitted that in the instant case the assessee declared all details of debtors and bad debts claimed in the Profit and Loss Account, he brought to our notice the details, which he has filed in the paper book: - Schedule 9 ₹. In Crores Previous year Sundry Debtors Exceeding Six Months 0.42 1.03 Good and secured 58.01 88.27 Good and unsecured 1.70 0.50 Doubtful and unsecured 60.13 89.80 1.70 0.50 Less Provision for doubtful Debts 58.43 89.30 Others Good and secured 139.68 125.33 Good and unsecured 299.74 401.83 439.42 527.16 497.85 616.46 9. Considered the submissions and material placed on record, we observe from the record that on identical facts the Hon'ble Supreme Court in the case of Vijaya Bank (323 ITR 166) held that the assesse debits to Profit and Loss Account and reduces from debtors/loans and advances on the asset side of the balance sheet amounts to write off and deduction u/s. 36(i)(vii) is available, while holding so, Hon'ble Supreme Court held as under: - " Coming to the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor/Defendant in each of those suits would rely upon the Bank statement and contend that no amount is due and payable in which event the suit would be dismissed. Before concluding, we may refer to an argument advanced on behalf of the Department. According to the Department, it is necessary to square off each individual account failing which there is likelihood of escapement of income from assessment. According to the Department, in cases where a borrower's account is written off by debiting Profit and Loss Account and by crediting Loans and Advances or Debtors Accounts on the asset side of the Balance Sheet, then, as and when in the subsequent years if the borrower repays the loan, the assessee will credit the repaid amount to the Loans and Advances Account and not to the Profit and Loss Account which would result in escapement of income from assessment. On the other hand, if bad debt is written off by closing the borrower's account individually, then the repaid amount in subsequent years will be credited to the Profit and Loss Account on which the assessee-Bank has to pay tax. Although, prima facie, this argument of the Department appears to be valid, on a deeper c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 199-34 only reads as under:- "On the facts and circumstances of the case and inlaw, the learned CIT(A) has erred in deleting the sum of ₹.6,183/- incurred in the Diners Club and ₹.17,350/- incurred in the Taj Hotel Membership fees for S.V. Birla disallowed by Assessing Officer on the reasoning that early hearing same is business expenditure. 16. We have heard both the parties, we find that he aforesaid issue raised in the assessment year 1993-94 is covered in favour of the assessee by the decision of the jurisdictional High Court in Otis Elevator CO. (India) Ltd., v. CIT 195 ITR 682 (Bom.). Respectfully following the same, we dismiss the ground raised by the department. 13. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 1993-94 is respectfully followed, accordingly, ground raised by the assessee is allowed. 14. With regard to Ground No. 4 which is in respect of interest received from the Income-tax Department, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this ITAT. Ld. DR has fairly accepted the submissions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w deduction u/s. 80HHC as claimed, interest received cannot be reduced from business profits as interest paid is higher than interest received and Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this ITAT. Ld. DR has fairly accepted the submissions of the Ld.AR. 18. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "14. The next grievance of the assessee relates to allowing deduction u/s 80HHC of the Act with respect to interest income. The issue under consideration is squarely covered by the decision of Hon'ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd., 343 ITR 89(SC) wherein it was held that net interest income is to be excluded from the eligible profit for computing deduction u/s 80HHC rather than gross interest. 15. An identical issue raised as additional grounds for the assessment year 1996-97 and 97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to be reduced from eligible profit rather than the gross rent and gross commission for the computation of deduction u/s 80HHC of the Act. We direct accordingly." 22. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 2001-02 is respectfully followed, we order accordingly. 23. With regard to Ground No. 5.6 which is in respect of loss on export of traded goods not to be adjusted against profit on export of manufactured goods, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this ITAT. Ld. DR has fairly accepted the submissions of the Ld.AR. 24. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y.2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "21. The ld. Sr. counsel for the assessee fairly conceded that this issue is now settled by the Hon'ble Supreme Court against the assessee in the case of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 25.1 Facts of the case, in brief, are that the AO estimated the expenses and allocated head office expense to the various units which had claimed benefits u/s. 8OHH,801, 80M and 80-0 of the Act. Since the nexus between the head office and the individual units cannot be denied and since the assessee did not give details so as to give better allocation of these expenses to various units, the CIT(A) upheld the action of the AO. Aggrieved with such order of the CIT(A), the assessee is in appeal before us. 25.2 After hearing both the sides, we find the AO has only allocated the expenses but no income was allocated. We find the co-ordinate Bench of the Tribunal in the case of M/s. Procter & Gamble India Ltd. Vs. DCIT, vide ITA No. 5466/Mum/99 order dated 27th November, 2006 for the A.Y. 1990-91 has held that head office expense allocated to the units are not to be taken into consideration for computing the income of the assessee eligible for deduction u/s. 801 and also u/s 8OHH. Similarly we fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio is: - "4. However, Mr. Murlidhar, learned counsel appearing on behalf of the respondent, strongly relied on the judgment of the Delhi High Court in the case of CIT vs. Eltek Sgs (P) Ltd. (2008) 215 CTR (Del) 279 : (2008) 3 DTR (Del) 241 : (2008) 300 ITR 6 (Del) wherein the Delhi High Court has in fact considered the very same issue, and also the judgment relied upon by the Revenue and has clearly distinguished the language employed under ss. 80-IB and 80HH and has observed as under (pp. 9 and 10) : "That apart, s. 80-IB of the Act does not use the expression 'profits and gains derived from an industrial undertaking' as used in s. 80HH of the Act but uses the expression 'profits and gains derived from any business referred to in sub-section' ….. A perusal of the above would show that there is a material difference between the language used in s. 80HH of the Act and s. 80-IB of the Act. While s. 80HH requires that the profits and gains should be derived from the industrial undertaking, s. 80-IB of the Act requires that the profits and gains should be derived from any business of the industrial undertaking. In other words, there need not necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we observe from the record that identical issue is decided in favour of the assessee for the A.Y.2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "28. In the additional ground, the assessee has also taken ground regarding sales tax exemption benefit being capital receipt not chargeable to tax. We find that a similar issue has been restored back by the Tribunal in A.Y. 2000-01 in assessee's own case to the file of the A.O. to decide after considering the decision of Special Bench in the case of DCIT vs. Reliance Industries Ltd., 88 ITD 273 (Mum). Respectfully following the said decision of the Tribunal, we restore this issue back to the file of the A.O. for deciding the same in the light of the findings of the Tribunal in assessee's own case for A.Y. 1999-2000 in ITA No. 5631/Bom/2002, wherein the Tribunal at para No. 26.1 on page 11 has restored the issue back to the file of the A.O.to decide the issue afresh after considering the decision in the case of Special Bench of the Tribunal in the case of Reliance Industries Ltd. (supra). Respectfully foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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), (d), (e) & (f), was also ignored." 2. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of ₹ 12,75,197/- towards contribution to local organisations, relying upon the CIT(A)'s orders in the assessee's own case for the AYrs, 1999-2000 & 2001-02 which have been contested by the department in further appeal before the ITAT." 3. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of expenditure of ₹ 55,81,093/- made by the Assessing Officer on estimate basis, being expenditure incurred for earning exempted income of dividend, relying upon the orders of the CIT(A) in the assessee's own case for the AYrs. 1994-55, 1995-96, 1999-2000, 2000-01 & 2001-02 which have been contested by the department in further appeal before the ITAT." 4. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of ₹ 71,31,011/- made by the Assessing Officer on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le unit the consideration of which will generally fall under capital head only and, in view of the same same, the Assessing Officer rightly considered the expenses of ₹ 15 crores as capital expenditure." 10. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow the expenses of ₹ 15 crores accepting the assessee's contention that the expenditure was not for the purpose of securing any assets or advantage of enduring nature but was for the purpose of removing difficulty in order to enable the assessee to carry on the business in a more beneficial manner and to get rid of a disadvantageous commercial relationship resulting from a large work force with low productivity without appreciating that the Calcutta High Court has, in the case of Brook Bond India Ltd. (1983)(140 ITR 272), held that 'where the object of incurring an expenditure is to effect the capital restructure as a result of which certain incidental advantage flows, the expenditure will be of capital nature and it is not the acquisition of arise of a permanent character alone, the creation of which is a condition for the carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon the decision of the Bombay High Court in the case of Sudarshan Chemicals Industries Ltd. (245 ITR 769) which has been contested by the department by way of SLP." 15. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to reduce the net interest, arrived at after reducing the amount of interest paid from the interest received in case the interest received is found to be linked with the business of the assessee, from the profits of the business for the purpose of computation of deduction u/s.80HHC, relying upon the order of the CIT(A) in the assessee's own case for the A.Y. 2001-02 which has been contested by the department by way of appeal to the ITAT. 16. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that no amount of head office expenses can be apportioned to the units eligible for deduction u/s. 80-IA, relying upon the order of the CIT(A) in the assessee's own case for the AYrs. 1996-97 to 2001-02, which have been contested by the department in further appeal before the ITAT. 17. On the facts and in the circumstances of the case and in law, the CIT(A) err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , details as under: - Rs. Clause (b) - Contribution to fund for welfare of employees 14,563 Clause (c) - Bonus 1,23,36,684 Clause (d) - Provision for leave salary 1,71,30,162 Total 2,94,81,409 46. During the course of assessment proceedings, Assessing Officer did not agree to the contention of the Assessee and disallowed amount of ₹.2,94,81,409/- u/s 43B on the ground that the Department has not accepted the decision of the ITAT order in Assessee's case on this issue and has filed an appeal to Hon'ble High Court. [Discussion in this regard is in para no. 6.1 to 6.5 on page no. 5 of the assessment order]. Assessee preferred appeal before the Ld.CIT(A) and the Ld.CIT(A) allowed the claim of the Assessee and deleted the disallowance relying on the decision of ITAT as well as the decision of the Ld.CIT(A) in Assessee's own case of A.Y.1993-94 to A.Y. 2001-02. The CIT (A) has discussed this issue in para 1.1 to 1.6 on page 1 & 2 of the order. 47. Before us, the Ld. AR of the assessee brought to our notice that the decision of Co-ordinate Bench of this tribunal for the A.Y. 2001-02, wherein it considered the issue and has allowed the issue in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his issue in para 3.1 to 3.3 on page 2 & 3 of the order. Revenue preferred appeal before us. 51. Before us, the Ld.AR of the assessee brought to our notice that the decision of the Co-ordinate Bench of this tribunal, wherein it has allowed the above issue in favour of the assessee for the A.Y. 2001-02. Ld. DR fairly accepted the submissions of the Ld. AR. 52. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "32. With regard to the contribution to the local organization, the issue has been dealt with by the A.O. at page 6 -7, para 10 of his order. The ld. CIT(A) deleted the addition/disallowance by dealing the issue at page 3, para 7 of his order wherein he has followed the order of the Tribunal in earlier years. 33. We have considered the rival contentions and we found that the issue has been decided by the Tribunal consistently in favour of the assessee in the assessment years 1986-87 to 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o our notice that the decision of the Co-ordinate Bench of this tribunal, wherein it has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 56. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "37. We found that similar issue has been dealt with by the Tribunal in A.Y. 2000-01 wherein the disallowance was restricted to 1.5% of the exempt income. As the facts and circumstances during the year under consideration are same, we direct the A.O. to restrict the disallowance to 1.5% of the exempt income." 57. Respectfully following the above decision, we direct the Assessing Officer to restrict the disallowance to 1.5% of the exempt income and partly allow the Ground No. 3 raised by the revenue. 58. With regard to Ground No. 4, the brief facts are, during the financial year 2001-02, the Assessee has incurred expenses of ₹.71,31,011/- towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the ld. CIT(A) for deleting the rural development expenses amounting to ₹ 66,08,937/-. 61. Respectfully following the above decision, we sustain the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly. 62. With regard to Ground No. 5, the brief facts are, during the previous year, the Assessee incurred exchange fluctuation loss of ₹.3,34,61,587/- and debited the same to Profit & Loss account. Break up of this loss is as under: a. On completed contracts / transactions - ₹ 1,14,79,288/- b. Conversion of trading assets and liabilities on Balance Sheet - ₹ 2,19,82,299/- Details of exchange loss were filed before the CIT(A) and the AO. A copy of the same is enclosed (Page No.029 to 054). This exchange fluctuation loss pertains to the business operations viz. import of raw materials and spare parts, export sale proceeds receivable etc. 63. During the assessment proceedings, the Assessing Officer has disallowed exchange fluctuation loss of ₹ 2,19,82,299/- relying on his own order for the AY 1998-99. Discussion in this regard is in para 13 on page no. 8 and 9 of the assessment order. On appeal Ld.CIT(A) dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ependent, interconnected and inter-laced with other Units of the Assessee and there is common management, common control and common funds. The Bhatinda Unit is mere expansion of the existing business and is not a new business. The Assessee has claimed debenture interest as business expenditure under section 36(1)(iii) of the Act. During the assessment proceedings the Assessing Officer rejected claim of the Assessee following its own order for the AY 1998-99. Detailed discussion in this regard is in para 14 on page 9 and 10 of the assessment order. On appeal Ld.CIT(A) allowed the claim of the Assessee following his own order for the earlier years including for AY 1998-99 and also the order of ITAT in the Assessee's own case for the AY 1993-94. The CIT(A) has discussed this issue in para 7.1 to 7.5 on page 4 & 5 of the order. Revenue preferred appeal against this order of the Ld.CIT(A). 68. Before us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 69. Considered the submissions and material placed on record, we observe fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing his own order for AY 1998-99, AY 2000-01 and AY 2001-02. The Ld.CIT(A) also followed order of the ITAT in Assessee's own case for AY 1986-87, AY 1990-91 to AY 1992-93. The CIT(A) has discussed this issue in para 8.1 to 8.5 on page 5 of the order. Revenue preferred appeal against this order of the Ld.CIT(A). 73. Before us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 74. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "35. Ground No. 4 of Revenue's appeal relates to the debenture issue expenses by the assessee. The issue has been dealt with by the A.O. at page 10-11, para 18 of his order and the ld. CIT(A) has dealt with this issue at page 3-4, para 9 of his order and deleted the disallowance made in respect of debenture issue expenses. We found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide belief entertained as a result of its advice by the tax advisors that the payment was to be made after 15 days from the date of payment of salaries and wages that the delay; otherwise had been due to financial difficulty as well as the submission that the delay was not intentional or was not to defraud the revenue because by delaying the payments by a few days the assessee was not to get any benefit rather was putting it to the risk of serious penal consequences, as envisaged in sections 43B, 2(24)(x) read with the provisions of section 36(1)(va) which no prudent person would like to do, have got force. We, therefore, are of the opinion that in the light of our decision for liberal interpretation of the provisions of the relevant sections, as observed earlier, by following the decision of the Hon'ble Supreme Court, the delay in depositing the amounts in question being under a bona fide belief and for want of funds can be said to be due to reasonable cause and, therefore, there was no justification in disallowing the assessee's claim for payments of contributions towards, EPF, EFPF, Administrative Charges, Insurance Fund and ESIS by invoking the provisions of section 43B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were number of players in this business and most of them were from unorganized sector. The Assessee was incurring huge losses in fabric business, which is evident from the summary of profit & loss account for last three years reproduced by the CIT(A) in his order. 81. It was submitted before us that there was tremendous pressure on the overall profitability of the Assessee Company. Profits earned in other products were wiped off due to losses in fabric manufacturing. The overall profitability of the Company was affected and outlook of the fabric sector was very weak. In order to reduce the salary and wages bill of the Units, the Assessee declared voluntary retirement scheme for the employees of the Textile Division at Gwalior in August 2000 and also in March 2001. Response to the voluntary retirement scheme was very poor and far below the desired level. In the financial year 2001-02 only 81 workers opted for voluntary retirement and none of the staff member opted for voluntary retirement. The Assessee undertook extensive evaluation of its operations of fabric business and decided to restructure the operations and manufacture to gain economies of scale and operations. The Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee reiterates there was no "Slump Sale" of the Gwailor undertaking as a number of assets and liabilities (over 95% of liabilities) was retained by the Assessee. Further the Bhiwani undertaking continued its business of manufacturing Fabric. 85. It was submitted that during the assessment proceedings the Assessing Officer has accepted the treatment given by the Assessee with respect to the sale of the assets and has only disputed the allowability of the claim of ₹ 15 crores as deduction in computing the business income of the Assessee. Discussion in this regard is in para 18 on page 11 to 15 of the assessment order. The AO disallowed the claim of the Assessee on the grounds as under: (a) Payment of ₹ 15 crores is not made for earning an income assessable during the year and is therefore not an allowable expenditure. (b) Payment is for acquiring advantage of enduring benefit and therefore not allowable as revenue expenditure u/s 37(1). (c) No payment is made in the year under consideration therefore the same is also not an allowable expenditure. 86. On appeal Ld.CIT(A) deleted the disallowance made by the AO and allowed deduction for ₹ 15 crore h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not ascertained therefore, this cannot be allowed, by referring to the findings of Ld CIT(A) in page 14 of the order. He also relied on the case law relied by the AO. 89. Considered the submissions and material placed on record, we observe from the record that this aspect of the matter is elaborately considered by the Ld.CIT(A) by following various judicial pronouncements and held that the expenses incurred of ₹.15 Crores is to be allowed as revenue expenditure, while holding so the Ld.CIT(A) held as under: - "11.2 In the appellant's case the liabilities for payment of ₹ 15 crores arose during this assessment year and therefore the claim during the current assessment year is held to be correctly made by the appellant. 11.22 Now the facts of the case shows that in order to get rid of Surmounting losses year after year which were definitely revenue in nature, and any payments made will also normally be revenue in nature. Moreover, the case laws quoted in the earlier paragraphs will further support this case. 11.23. It was also the fact that the appellant was already running the Same fabric business in both the units i.e. Bhiwani and Gwalior, and therefore the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al important rights, viz., that the lender's consent was necessary for the import of goods, that the goods were to under pledge with the lenders, that the company should not charter tankers without the lenders' consent, that the lenders were to be given an irrevocable power of attorney, etc. The rights reserved were only towards securing to the lenders payments of money agreed to be paid by the company under the agreements. The main intent and purpose of the agreements was to make available to the company finances to enable it to carry on its business. The provisions in the agreement, did not relate to the whole structure of the assessee's profit making apparatus and did not regulate the assessee's activities. Under the agreements, the company hag the heavy liability to pay interest at 6 per cent. on the entire amount of ₹ 19 lakhs whether any finance was borrowed by it or not, commission was to be paid in respect of all goods of import irrespective of the company having borrowed any finance under the agreements and the commission was payable even after the period of ten years so long as the company continued business. These were disadvantages of a trading nature which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the expenditure on the ground that it is capital in nature resulting into benefit of enduring nature and also relied on decision of the Bombay High Court in the case of CIT Vs Patel International Films Limited (102 ITR 209). Detailed discussion in this regard is in para 22 on page 19 to 21 of the assessment order. On appeal the Ld.CIT(A) deleted the disallowance after discussing the detailed submissions made by the Assessee and held that the decision of the Bombay High Court in the case of CIT Vs Patel International Film Ltd. (Supra) is not applicable to the facts of the present case. In Patel International films case the business of the assessee had not started whereas in the present case the Assessee is already having running business. The CIT(A) has also followed his own decision for the AY 2001-02. The Hon'ble Mumbai ITAT in the Assessee's own case for AY 1976-77 deleted the disallowance made by the AO towards expenditure incurred for installation for neon signs. The CIT(A) has discussed this ground in para 15.1 to 15.7 on page 17 & 18 of the order. Revenue preferred against this order of the Ld.CIT(A). 93. Before us, the Ld. AR of the assessee brought to our no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97. Before us, the AR of the assessee brought to our notice various decisions which are in favour of the assesse viz., Raychem RPG Ltd. [346 ITR 138 (Bom. HC)], Kotak Securities Ltd., [346 ITR 349 (Bom. HC)], Asahi India Safety Glass Ltd. [TS-640-HC-2011 (Delhi HC)], Amway India Enterprises [346 ITR 341 (Delhi HC)], DCIT v. Lubi Electricals O. Ltd. (ITA No. 1163/Ahd/92), Amway India Enterprises [111 ITD 112 (Delhi SB)], Empire jute Co. Ltd [124 ITR 1 (SC)], Media Video Ltd [122 Taxman 28 (Delhi ITAT)] and Forbes Campbell & Co. Ltd in ITA No. 8489/Bom/88 (Mumbai ITAT) and requested the same be adopted in the case of assessee also. 98. Ld. DR vehemently supported the order of the Assessing Officer. 99. Considered the submissions and material placed on record, we observe that this issue is dealt by the Hon'ble Jurisdictional High Court in the case Raychem RPG Ltd. [346 ITR 138 (Bom. HC)] and held as under: - "1. Two questions of law raised by the Revenue in this appeal, which reads thus: "(a) Whether on the facts and circumstance of the case and in law, the Hon'ble ITAT was justified in deleting the additions in respect of disallowance of software expenditure to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Ld.CIT(A) in allowing the claim of the assessee. Ground raised by the revenue are dismissed. We order accordingly. 101. With regard to ground No. 14 & 15, the brief facts are, in the return of income, the Assessee claimed deduction u/s 80HHC of ₹ 14,29,360/-. The AO allowed deduction to the extent of ₹ 11,99,358/- only by restricting the deductions on the following grounds: a. Total turnover to be considered inclusive of sales tax and excise duty. b. Reduced 90% of interest income ignoring interest expenditure. 102. Assessing Officer made detailed discussion in this regard in para 27 on page 24 to 28 of the assessment order. 103. On appeal Ld.CIT(A) as regards excluding the excise duty and sales tax in the total turnover for computing the deduction s 80HHC, the CIT(A) allowed the contentions of the Assessee and directed the AO to exclude excise duty and sales tax from the total turnover for computing the deduction u/s. 8OHHC. The CIT(A) has discussed this issue in para 19A.1 to 19A.3 on page 20 of the Order. As regards reduction of 90% of interest income the CIT(A) has discussed this issue in Para 19B.1 to 19B.6 on page 20 & 21 of the order. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para no. 20.1 to 20.6 on page 21 & 22 of the order. Revenue is in appeal against this order of the Ld.CIT(A). 108. Before us, the Ld. AR of the assessee brought to our notice that the Co-ordinate Bench of this tribunal has allowed the above issue in favour of the assessee. Ld. DR has fairly accepted the submissions of the Ld.AR. 109. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "54. The issue in ground No. 18 pertains to the apportionment of head Office expenses while computing deduction u/s 80IA of the Act. 55. This issue has been dealt with by the ld. CIT(A) vide his order in page 15-16, para 23.5 & 23.6. We found that the issue has been decided by the Tribunal in assessee's own case in its favour in assessment years 1994-95 to 1998-99 and the Department is not in appeal against the order of the Tribunal. Respectfully following the order of the Tribunal, we do not find any reason to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t page 16-17, para 24 of his order. We found that the issue has been decided by the Tribunal in assessee's own case in its favour in assessment years 1998-99 to 2000-01. Furthermore, the Department is not in appeal against the Tribunal order on this issue before the Hon'ble High Court for A.Y. 1998-99. Respectfully following the order of the Tribunal, we do not find any infirmity in the order of the ld. CIT(A) for allowing deduction u/s 80IA of the Act in respect of Vikram Unit amounting to ₹ 3,58,74,158/-." 114. Respectfully following the above decision, we do not find any reason to interfere with the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly. 115. With regard to Ground No. 18, the brief facts are, provisions of section 234D were introduced from 01.6.2003 for levy of interest on refund issued in summary assessment. In this case, intimation of summary assessment u/s 143(1) for AY 02-03 was issued by the AO on 28.02.2003 granting refund to the Assessee. Regular assessment order was passed on 16.02.2004 and demand of ₹ 7.27 Cr was raised. The Assessing Officer levied interest u/s 234D of ₹ 40.06 lac. On appeal Ld.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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