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TMI Blog2003 (8) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... own case for asst. yr. 1990-91. A copy of the said order has been placed at p. 59 of the assessee's paper book. On perusal of the order of the Tribunal in ITA No. 3229/Ahd/94 dt. 17th April, 2002, for asst. yr. 1990-91 and others we find that the issue is covered in favour of the assessee. The relevant observation of Tribunal from the said order is reproduced as under: "We have considered the rival submissions of the parties and perused the record. It has been found from the order of the CIT(A) relating to asst. yr. 1989-90 that the presentation articles were not carrying the logo of the company. On these facts, we are of the view that such expenses are not disallowable. Therefore, we allow the same and the addition made by the AO on this count is deleted." 4. The second ground is pertaining to disallowance of Rs. 1,78,610 under rule 6D. Luxuary tax, expenditure tax etc. should not be considered at the time of calculation of disallowance under r. 6D. The learned authorised representative pointed out that this issue is covered against the assessee by the order of the Tribunal supra. The relevant observation of the Tribunal supra is reproduced as below: "In our view the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the assessee by the decision of the Tribunal cited supra. The relevant observations of the Tribunal are reproduced as under: "Ground No. 6 relates to assessee's claim for depreciation on electrical fittings and fixtures at rented premises "Arcadia Building, Bombay". The appellant had let out its premises "Arcadia Building, Bombay" and also let out the furniture and fixtures, air conditioner and other electrical installations therein on hire. The rent received towards premises let out is taxed under the head "income from house property". The hire charges are taxed under the head "income from other sources" against which depreciation is claimed. The Asstt. CIT denied the claim for depreciation on electrical installations stating that the same formed part of building. The assessee contended that the electrical installations are not part of the cost of building and are to be treated as so and as such. This issue is also covered against the assessee by the earlier order of the Tribunal in the assessee's own case for asst. yr. 1987-88. We therefore, respectfully following the earlier order of the Tribunal, confirm the view taken by the CIT(A). Hence, ground No. (6) is also rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of fittings. After considering the totality of the facts of the case we find that the controversy under consideration is covered by the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Tarun Commercial Mills Ltd. Some facts and figures involved in this ground are subject to verification. Under the circumstances we send back this issue to the file of the AO to decide the allowability of depreciation in accordance with the above judgment of Hon'ble Gujarat High Court after affording reasonable opportunity of hearing to the assessee. 11. The next ground raised by the assessee pertains to Rs. 1,03,901, prior year expenses debited in Financial year 1989-90. This ground has not being pressed by the learned authorised representative therefore, the same is rejected as not pressed. 12. In the result, the appeal of the assessee is partly allowed. 13. ITA 1816/Ahd/1995 (Revenue's appeal): The first ground raised in this appeal pertains to Rs. 63,86,710 being premium for forward contract for foreign exchange. The learned authorised representative submitted that this ground is covered against the assessee by the decision of the Tribunal cited supra. The relevnat observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilised amount of the contract to be available at a later date. Looking to the nature of expenses and provisions of s. 43A, in our opinion, the AO is legally and factually correct in capitalizing the roll over charges amounting to Rs. 8,26,280. We, therefore, reverse the order of the CIT(A) in this regard and restore the order of the AO. This ground of appeal by Revenue is allowed. The AO will however, allow depreciation on the increased cost of the capital asset as a result of giving effect to the order of the Tribunal." We respectfully follow the above order of the Tribunal and in view of that reverse the order of the CIT(A). Since the relevant facts are subject to verification. Therefore, the matter is sent bank to the AO to decide in accordance with the above observation of the Tribunal after giving reasonable opportunity of hearing to the assessee. 14. The second ground raised by the Revenue pertains to Rs. 17,30,459, addition to closing stock on account of Modvat. At the time of hearing the learned authorised representative pointed out that this issue is covered in favour of the assessee by the above order of the Tribunal. The relevant observations of the Tribunal read as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,775 Eligible export turnover under s. 80HHC 20,10,02,188 Out of the above export Rs. 7,27,580 is for export from gear division and remaining amount of export is claimed to have been made to electricity generating authority of Thailand. It is claimed by the company that amount of export to Thailand has been received in India in convertible foreign currency. Assessee-company has clarified in letter No. A 301:36516 dt. 7th Oct., 1993, that company had not maintained separate books of accounts for export business and as such they are entitled for deduction under s. 80HHC as computed as a proportion of export turnover to total turnover. (ii) On examination of the invitation to bid, contract entered into it with RGAT, details of bills issued etc. it is found that company had executed the foreign project in which it supplied the goods and services taken by it in pursuance of contract entered into it with electricity generating authority of Thailand. The company had undertaken the foreign project as per invitation to BID by BGAT, Thailand for design, manufacture, testing, preassembly, erection, testing and commissioning of third lignite handling system for the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be allowed. Para 17: Assessee-company has made export of gears from gear division for Rs. 7,27,580 and other conditions are fulfilled. So deduction under s. 80HHC for export profit is allowed on this export. This deduction is worked out as under: 7,27,580 x 4,27,61,059 1,38,11,80,317 = Rs. 22,526." 17. The CIT(A) after considering the submission of the assessee directed the AO to allow the claim of the assessee. The relevant observation of the CIT(A) is reproduced as below: "I have considered the submissions made on behalf of the appellant. It is seen that as per the terms of contract award, it was clarified that the EGAT shall have the option of two separate contract, one for supply of material and equipment and the other for the erection of equipment in Thailand. As per the above terms of award, the appellant entered into two separate contracts, one for the supply of material and equipment and the other for the erection of the equipment. Though there were certain clauses, like breach of the terms of one contract, shall be classified as the breach of the terms of the other contract, but it does not alter the basic fact that there were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the profit earned under the contract related to installation and assembling of plant and machinery outside India. The company did not maintain separate books of accounts for separate contract. The company received contract from EGAT and company made supplies from India and outside India against the contract. No separate material receipt were issued by EGAT since the EGAT released payment against the Letter of Credit for various supplies. The learned authorised representative further submitted that all physical export made from India are covered under s. 80HHC and the company has rightly claimed the deduction under s. 80HHC. All supplies other than Elecon Engg. Co. Ltd. were made after purchasing goods in the name of assessee-company. The learned authorised representative further submitted that the assessee-company entered into two contracts with EGAT, Thailand, one is for supply of material and machinery and the other is for erection and commissioning of the system. The bills pertaining to two separate contracts were raised by the assessee separately. The learned authorised representative pointed out the bills separately raised of which copies have been incorporated in the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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