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108 orders · Page 3 of 3
The Tribunal upheld the CIT(A)'s decision to allow depreciation on machinery installed at customer sites. It was held that the asset need not be under the assessee's direct control as long as it is used for the purpose of the assessee's business.
The Tribunal upheld the deletion of the disallowance for cash payments as it was a double disallowance. It also upheld the deletion of property expenses, finding them to be business-related and not capital in nature. The Tribunal allowed the carry forward of losses from the amalgamating company, holding that the procedural amendment to Section 72A was retrospective.
The tribunal held that interest under Section 234B is not applicable as the payer (CIL) had the primary obligation to deduct tax at source. However, interest under Section 220(2) was held to be leviable as the assessment orders were set aside for fresh consideration.
The Tribunal found that the assessee had demonstrated a reasonable cause for non-compliance due to severe ill health and family circumstances. Therefore, immunity under Section 273B should be granted, and the penalty should be cancelled.
On the issue of staff welfare expenses (Ground No. 1 in assessee's appeal), the Tribunal noted that the issue was covered by its own order for AY 2007-08 (ITA No. 919/Kol/2011). In that order, the Tribunal had held that expenses reimbursed to staff recreation clubs/organizations were for the welfare of employees due to business expediency and were part of the organization. The Tribunal restricted the disallowance to Rs. 25,800/- representing direct contribution to a Registrar of Societies, allowing the rest under Section 37(1). Following this precedent, the Tribunal set aside the issue to the AO to decide in light of the earlier order, allowing the ground for statistical purposes. Regarding the disallowance under Section 14A (Ground No. 2 in assessee's appeal and Ground No. 1 in revenue's appeal), the judgment is incomplete and does not record the Tribunal's decision or reasoning on this issue. On the computation of benefit under Section 80-IA (Ground No. 3 in revenue's appeal), the Tribunal held that the market rate contemplated by Section 80-IA is the rate at which electricity could have been sold to a distribution licensee by a generating company, not the rate at which distribution companies sell to consumers. The Tribunal found the reliance on Thiru Arooran Sugars Ltd. and the Chhattisgarh High Court's judgment in Godawari Power & Ispat Ltd. to be incorrect in this context. It also distinguished the Madras High Court judgment and noted that the Calcutta High Court judgments cited were either not admitted or based on concession and thus not precedents. The Tribunal set aside the aspect of determining the market value alone to the AO to decide based on evidence of the rate at which electricity could have been sold to a distribution licensee, allowing the revenue's ground partly for statistical purposes.
The Tribunal held that the CIT(A) erred in admitting fresh evidence without following Rule 46A and that the nature of payments and the related TDS deductions required examination by the Assessing Officer.
The Tribunal confirmed the order of the CIT(A), directing the Assessing Officer to give effect to the CIT(A)'s order. The assessee's appeal before the Tribunal was dismissed as the grounds were not pressed.
The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was defective because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the precedent set by the Karnataka High Court and upheld by the Supreme Court, the levy of penalty was cancelled.