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TMI Blog2021 (11) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... AY HIGH COURT] has taken similar view in deciding question no. (b) raised before it and held that the Tribunal was justified in holding that subsidy cannot be considered as a payment directly or indirectly to meet any portion of the actual cost. The assessee in that case also got subsidy for industrial development. Similar view has also been taken in M/s. Alkoplus Producers Pvt. Ltd. and Another [ 2019 (4) TMI 558 - ITAT PUNE] - It is overt that subsidy, in the prevailing circumstances, does not qualify for reduction from the cost of assets in pursuance of Explanation 10 to section 43(1) of the Act. We, therefore, overturn the alternative view also as canvassed in the impugned order on this score. This ground is allowed. Allowability of Aircraft expenses - CIT(A) upheld the disallowance at 25% of the gross amount of expenses - HELD THAT:- While sustaining the disallowance, the ld. CIT(A) took gross figures of aircraft expenses. The assessee has placed on record a calculation showing that out of total expenses of Rs.560.06 lakh the assessee recovered a sum of Rs.344.80 lakh from outside parties etc., leading the net amount of expenses at Rs.215.26 lakh. The disallowance is, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als one by the assessee and other by the Revenue - arise out of the order passed by the CIT(A)-7, Pune on 24-01-2017 in relation to the assessment year 2012-13. 2. The first ground taken by the assessee in its appeal is against the confirmation of disallowance of Rs.2,14,30,844/- made by the Assessing Officer (AO) u/s.14A of the Income-tax Act, 1961 (hereinafter also called the Act ). 3. Briefly stated, the facts of this ground are that the assessee made investment of Rs.527.42 crore in shares and mutual funds etc., which yielded exempt income of Rs.25.15 crore. No disallowance u/s.14A of the Act was offered in the return of income. On being called upon to explain the reasons, the assessee submitted that a sum of Rs.8,01,269/- was disallowable u/s.14A which was omitted to be considered in the computation of income. This amount was computed by attributing certain part of Employees salary cost towards exempt income. The AO held that no disallowance on account of interest for investment in shares and mutual funds was warranted u/s.14A read with Rule 8D(2). As regards other expenses warranting disallowance, the AO found that the assessee offered a meager disallowance of Rs.8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the AO. To sum up, the ground raised by the assessee is dismissed. 5. Ground No.2 of the assessee s appeal is against the taxability of Rs.19,14,34,976/- received by the assessee under Package Scheme of Incentives (PSI) 2001 as revenue receipt chargeable to tax. The assessee claimed a sum of Rs.19.14 crore as subsidy received from Government of Maharashtra under PSI 2001 scheme as Capital receipt. The AO, following the view taken by him for the earlier years, treated the amount as revenue in nature. The ld. CIT(A) upheld the impugned order against which the assessee has come up in appeal before the Tribunal. 6. We have heard both the sides and gone through the relevant material on record. It is seen that similar issue came up for consideration before the Tribunal in earlier years at the instance of the Revenue inasmuch the claim of the assessee was accepted by the ld. CIT(A) for the earlier years, which necessitated the Revenue to file appeal before the Tribunal. Such grounds taken by the Revenue came to be dismissed by the Tribunal. A copy of the Tribunal order for the immediately preceding assessment year has been placed at page 48 of the paper book in which relevant di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and depreciation on the same at Rs.3,44,90,818/-. Following the view taken for the preceding years, the AO made disallowance at 1/3rd of the total expenses. The ld. CIT(A) upheld the disallowance at 25% of the gross amount of expenses. Whereas the assessee is aggrieved by the sustenance of disallowance at 25%, the Revenue wants restoration of addition to 1/3rd of expenses. 10. Having heard both the sides and gone through the relevant material on record, it is seen that similar issue came up for consideration before the Tribunal in the assessee s own case for the immediately preceding assessment year 2011-12. The Tribunal has sustained the disallowance at 15% by following its orders for earlier years. Since the facts and circumstances are similar, respectfully following the precedent, we also uphold the disallowance at 15% of Aircraft expenses and depreciation thereon. 11. It is further found that while sustaining the disallowance, the ld. CIT(A) took gross figures of aircraft expenses. The assessee has placed on record a calculation at page 213 of the paper book showing that out of total expenses of Rs.560.06 lakh the assessee recovered a sum of Rs.344.80 lakh from outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on the judgment of Hon ble Gujarat High Court in CIT Vs. Sun Pharmaceutical Industries Ltd. (2017) 85 taxmann.com 80 (Guj.) in which the matter has been sent back to the AO for verification of the amount of expenses. The ld. AR did not raise any serious objection to the verification of the amount accordingly. We, therefore, hold that the amount of weighted deduction should be allowed in entirety irrespective of the fact that it was not approved by the DSIR, subject to verification of the claim by the AO in terms of the afore referred judgment of the Hon ble Gujarat High Court. 16. Ground No.1 of the Revenue s appeal is against allowing depreciation at 60% on Printers, UPS and other allied items. The AO allowed depreciation at 15% as against the assessee s claim of 60%. The ld. CIT(A) restored the assessee s claim. 17. It is seen that similar issue came up for consideration before the Tribunal for the assessment year 2011-12. Relevant discussion has been made at page 54 of the paper book in which the opinion of the ld. CIT(A), in increasing the rate of depreciation, has been upheld. Respectfully following the same, we dismiss this ground. 18. Ground No.2 of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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