Case Law Details
Gujarat State Fertilizers & Chemicals Ltd. Vs DCIT (ITAT Ahmedabad)
It is evident from the same that the ITAT held that the claim of expenditure incurred by the assessee on the abandoned project, amounting to Rs.20.50 lakhs, was allowable to it subject to the assessee demonstrating the fact that it had incurred the expenditure itself, and not through Gujarat Acrylics Ltd., an Joint Venture entity of the assessee and This fact, we find, has been suitably demonstrated by the assessee, by pointing out that the Shareholders agreement between the JV partners entered on 06/01/1995 required the respective parties to the JV to bear costs up to 31-12-1994 and the assessee had till then incurred this cost of 20.51 lacs. As per the terms of agreement between the JV partners costs incurred upto 31-12 -1994 was to be borne by the partners themselves. There was no question therefore of the JV company, i.e Gujarat Acrylics Ltd, bearing any expenditure up to 31-12-1994 . The impugned expenses incurred by the assessee of 20.51 lacs have been suitably demonstrated as incurred up to 31-12-1994. The Revenue does not dispute this fact. Therefore ,there is no doubt in the fact that the said expenses of Rs.20.5 1 lacs have been incurred by the assessee itself, the Shareholders agreement ruling out in clear terms the JV company from bearing these expenses. Therefore, we find that the assessee had established clearly that this expenditure had been incurred by the assessee itself. In view of the same, we find that the assessee had sufficiently demonstrated compliance with the conditions stipulated by the ITAT for the allowance of the claim, and we hold that the assessee is entitled to the said claim of project expenses in terms of the direction of the ITAT in the first round.
Wage Settlement Expenditure Deductible in Year of Actual Payment
The ld. counsel for the assessee was unable to controvert the factual finding that to the extent of Rs.81 lacs the claim of wages was not settled in the impugned year. In view of the same, we see no reason to interfere in the order of the ld. CIT(A) disallowing the claim of wages to the extent of Rs. 81 lakhs. At the time same, we agree with the contentions of the assessee that the said claim be allowed in the year in which it is actually paid by the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Please become a Premium member. If you are already a Premium member, login here to access the full content.
