Liberty India (supra) was a case of non-operational subsidy inasmuch as the subsidy, provided in Liberty India (supra), did not relate to production; whereas the subsidies, in the present set of cases, are operational in nature inasmuch as the subsidies are related to the production
AO denied deduction u/s 80-IB(10) only on the ground that assessee engaged in business of construction had adopted ‘Project completion method’ instead of ‘Percentage completion method’ as prescribed under AS-7 (Revised). The Hon’ble High Court observed that there was no allegation to the effect that on account of “Project completion method” adopted by the assessee, its profit for any particular year was distorted. Further, the assessee had followed the same system consistently for a long period of time. It was thus held that assessee must be allowed deduction u/s 80-IB(10).
Though the questions are multiple, issue is single, namely, the deduction of Rs.61,08,500/- claimed by the assessee towards expenditure being part of development charges. The assessee had paid such sum to Surat Municipal Corporation towards water connection charges.
The AO merely made comparative study of the expenses for the year under consideration with the preceding assessment year and found that expenses incurred in the preceding assessment year were 2.89% on turnover but in the assessment year under appeal it was 4.78% on the turnover.
The Tribunal in the assessee’s appeal considered several grounds titled as “Additional grounds”. However, upon close perusal of such so-called grounds, we notice that such grounds were nothing but legal contentions and arose out of order of CIT(Appeals) which was under challenge
Issue pertains to expenditure of Rs.1.02 crores ( rounded off) expended by the assessee and whether the same should be treated as capital or revenue expenditure. For the assessment year 2008-09 the Assessing Officer noticed that the assessee had debited in the profit and loss account
In the result, we are of the opinion that Section 40(a) (ia) would cover not only to the amounts which are payable as on 31th March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirements of the said provision exist.
We are of the opinion that the findings of the Tribunal are based on evidence on record and are purely factual in nature. The Tribunal after taking into account relevant materials, came to the conclusion that a certain rate of gross profit presented by the assessee was acceptable.
The nature of processing of loose cotton into cotton bales after sprinkling water and mechanically pressing the same is similar to processing camphor powder into camphor cubes. Loose cotton in bulk quantity with lighter density is as a result of pressing converted intocotton bales and to that limited extent it certainly undergoes a change.
Such conclusions of the Commissioner (Appeals) were confirmed by the Tribunal in the impugned judgment. Here also we notice that the observations of the Commissioner (Appeals), as confirmed by the Tribunal, are based on appreciation of evidence and material on record. When two authorities found on facts that no interest bearing funds were directed for making interest-free advances, in our view, no question of law would arise.
