Business expenditure — Entitlement provided to assessee for deduction of lease rentals on windmills used for purpose of business

Addl. CIT v Weizmann Ltd. ITAT, Mumbai

Deduction under s 80HHC

• Allowability of deduction under s 80HHC while computing the book profit under s 115JB in spite of the fact that the deduction under s 80HHC computed under cl (a), (b) and (c) of sub-s (3) or sub-s (3A) is Nil.
• Income on sale of DEPB licence is represented by entire sale proceeds of the licence and there is no logical justification in bifurcating the value of the sale consideration realised by the exporter on the transfer of the DEPB credit.
• If the assessee carrying on more than one business, only the business of which export was a part was required to be taken into consideration for computing deduction.

Business expenditure — Deduction under s 36(1)(iii)

• As long as the assessee has sufficient interest free funds, the presumption to be taken is that the investments are made out of such interest free funds.
• Mere fact of allowing interest free advance at a rate lower than the rate on which borrowings are made, cannot justify the disallowance of interest on borrowed funds.
• The CIT(A) was justified in making ad-hoc disallowance on account of foreign travelling expenses since the complete details of expenses were not provided by the assessee.