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TMI Blog2008 (6) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... P. K. R. Menon and George K. George for the appellant. P. Balachandran and Smt. Preeta S. Nair for the respondent. JUDGMENT The judgment of the court was delivered by 1. C. N. RAMACHANDRAN NAIR J. — These appeals filed by the Revenue arise from the common order of the Income-tax Appellate Tribunal, Cochin Bench disposing of the assessee's appeals for the assessment years 1993-94 to 1997-98. 2. We have heard the senior counsel Sri P. K. R. Menon appearing for the appellant and the senior counsel Sri P. Balachandran appearing for the respondent. 3. The common issue raised for all the years is whether the assessee was entitled to deduction under section 80-IA of the Income-tax Act, 1961 (hereinafter called "the Act") ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d so much so, the balance new plant is not a new industry. The specific case of the Revenue is that the new industry cannot function on its own and so much so, it is not entitled to relief under section 80-IA of the Act The senior counsel appearing for the assessee, on the other hand, contended that the new plant is separate and distinct in itself and the use of all facilities like conveyor system for raw materials, water storage tank, etc., does not make it part of the old industry. He specifically referred to substantial investment made, increase in production capacity, etc., as factors proving for the setting up of a new plant. Reference is invited to the test laid down by the Supreme Court in Textile Machinery Corporation Ltd. 's case [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme also is entitled to the benefit In the normal course, we should accept the finding of facts by the Tribunal pertaining to the set up of new industry if it is based on cogent and acceptable evidence. However, since the Assessing Officer has conducted an inspection and disallowance is made, based on findings, we feel, it would have been desirable for the Tribunal also to have verified the facts by itself by conducting an inspection. 5. The senior counsel for the Revenue contended that the Tribunal has no new material to arrive at a conclusion different from what the Assessing Officer has recorded. He has, therefore, pressed for requirement of inspection by the Tribunal to enter into a finding as to whether the claim of setting up o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of R D cess of Rs. 2,51,594 paid to the Central Government under the R D Cess Act. The claim was disallowed by the Assessing Officer, since the assessee has shown the payment as "the expenditure pending allocation" in its accounts. Since the conditions laid down in section 43B have been satisfied in this case, the Tribunal allowed the claim following the decision of the Supreme Court in Tuticorin Alkali Chemicals and Fertilizers Ltd. v. CIT [1977] 227 ITR 172. The finding of the Tribunal is that whatever be the pattern of accounting of the amount, the assessee has incurred a statutory liability. In fact, there was liability to pay the cess and the same was, in fact, paid in the previous year relevant to the assessment year. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the purpose of business. We, therefore, do not find any ground to interfere with the order of the Tribunal. 8. The last ground raised pertains to the disallowance of cash payment made in excess of Rs. 20,000 in terms of section 40A(3) of the Act. The Assessing Officer made disallowance by adding all the payments in cash made to the same party. However, the Tribunal held that disallowance should be made only in respect of each and every payment made above Rs. 20,000 other than through cheque or demand draft. Since the amendment authorising clubbing of expenditure for the purpose of disallowance is to take place in the next financial year, the Tribunal's order to make the disallowance with reference to the individual payments is pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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