National Organic Chemical Industries Ltd. Vs Addl. CIT
ITAT Mumbai
I.T.A No. 3495/ Mum/2003 (Assessment year: 1998-99)
I.T.A No. 3677/ Mum/2003 (Assessment year: 1998-99)
I.T.A No. 5296/ Mum/2003 (Assessment year: 1999-2000)
I.T.A No. 5176/ Mum/2003 (Assessment year: 1999-2000
O R D E R
Per Pramod Kumar:
1. These cross appeals are directed against separate orders of the CIT(A) relating to the assessment years 1998-99 and 1999-2000, respectively. The appeals arise out of the assessments made under section 143(3) of the Income tax Act, 1961. As they involve some common issues, they were heard together and are being disposed of by this common order for the sake of convenience.
2. The assessee has filed charts in respect of individual appeals as well as paper books, which have been taken into consideration while disposing of the appeals.
3. Ground No. 1 relates to the decision of the CIT(A) disallowing the deduction of Rs. 18,01,43 1 of pro-rata premium on leasehold land.
4. Learned representatives fairly agree that this issue stands covered against the assessee on identical facts by the orders of the Tribunal in assessee’s own case for the assessment years 1989-90 to 1997-98. Copies of these orders have been placed on record. In view of this and respectfully following the orders of the Tribunal, we uphold the order of the CIT (A) in disallowing the deduction of Rs. 18,01,341 on pro-rata premium on leasehold land.
5. This ground is thus dismissed.
6. The second ground is an alternate ground to the one considered above, wherein, the argument of the assessee is that the entire premium needs to be considered as cost of building and plant so as to allow depreciation thereon. Since the issue is considered against the assessee in ground No.1, accordingly, this ground is also dismissed.
7. Ground No. 2 is thus dismissed.
8. Ground No. 3 relates to dis-allowance of license and process technology fees of Rs. 7,92,00,396. This ground was not pressed, therefore, same is dismissed as not pressed.
9. In Ground No. 4, the assessee is aggrieved by the CIT (A)’s action in not allowing Rs. 1,00,83,271 claimed by the assessee towards cost of catalyst issues.
10. Facts in brief are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed deduction of Rs. 1,00,83,271 on the new method which was not allowed by the Assessing Officer in full. The view taken by the AO was upheld by the first appellate authority.
11. Before us, it was argued that on similar issue in assessee’s own case for the assessment years 1987-87 to 1997-98, the matter has been restored back to the file of the Assessing Officer with directions to re-compute the profits in accordance with the old method followed by the assessee. Since, there is no change in the facts in the current year, respectfully following the orders of the Tribunal; we also restore this issue to the file of the Assessing officer with the same directions as were given by the Tribunal in the years cited before us.
12. Ground no. 4 is thus allowed for statistical purposes.
13. Ground No. 5 & 6 is against confirmation of dis-allowance of Rs. 17,29,454 being prior period expenditure.
14. We find that similar issue had come up for consideration before the Tribunal in assessee’s own case for the assessment years, 1991-92, 1996-97 and 1997-98, wherein, the same has been decided in favour of the assessee by the Tribunal. Since in the year under consideration, there is no change of facts, respectfully following the earlier orders of the Tribunal, we decide the issue in favour of the assessee with the direction to the Assessing Officer to ensure that no double deduction is allowed. Subject to this remark, Ground No.5 & 6 is allowed.
15. Ground No. 7 is against CIT (A)’s confirming the dis-allowance of over-riding commission of Rs. 35,07,321 paid to Neeraj Consultants.
16. Facts in brief are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee had paid Rs. 35,07,321 to Neeraj Consultants Ltd., towards overriding commission. In the course of assessment proceedings, the assessee was unable to produce any evidence to show that Neeraj Consultants Ltd has rendered any service to the assessee. It was in this backdrop, the Assessing Officer disallowed the expenses of Rs. 35,07,321. The action of the Assessing Officer was also upheld in the first appeal. Aggrieved, the assessee is in appeal before us.
17. Learned representative fairly agree that this issue is covered against the assessee by the decision dated 28th January, 2011 of a co-ordinate Bench of this Tribunal in assessee’s own case for the assessment year 199 7-98, copy of which is placed on record. We, therefore, confirm the disallowance made by the authorities below.
18. Ground No. 7 is thus dismissed.
19. Ground No. 8 & 9 is against confirmation of dis-allowance of expenditure of Rs. 17,58,270 incurred on purchase of property time share in a holiday resort. Both the grounds were not pressed, therefore, dismissed as not pressed.
20. Ground No.10& 11 is against CIT(A)’s confirming the dis-allowance for the loans and advances of Rs. 2,50,000 given to Samarat Housing and Leasing written off during the year.
21. Learned counsel for the assessee fairly agrees that the ld CIT (A ) has been quite fair in reducing the quantum of dis-allowance to Rs. 2,50,000 out of Rs. 50,18,059. He, accordingly, did not press this ground. In view of this, Ground No.10& 11 is dismissed as not pressed.
22. Ground Nos.12 to 14 relate to confirmation of disallowance of expenditure of Rs. 87,14,824 were not pressed, therefore, same are dismissed as not pressed.
23. Ground No.15 relates to the dis-allowance of fees of Rs. 3,65,51,614 paid for restructuring the assessee’s business.
24. Having considered the rival contentions and having perused the material on record, we find that the CIT (A) has merely followed the decision for the assessment years 1993-94 to 1997-98. However, the Tribunal has reversed the order of the CIT(A) and accepted the grievance of the assessee for the above years. Since, there is no change in facts in the year under consideration, respectfully following the same, this ground is allowed.
25. Ground No. 16 relates to dis-allowance of consultancy and advisory fees of Rs. 1,50,000 for modernisation project.
26. Having considered the rival contentions and having perused the material on record, we find that the CIT (A) has merely followed the decision for the assessment years 1993-94 to 1997-98. However, the Tribunal has reversed the order of the CIT(A) and accepted the grievance of the assessee for the above years. Since, there is no change in facts in the year under consideration, respectfully following the same, this ground is allowed.
27. Ground Nos. 17 to 23 are consequential in nature and does not call for specific adjudication.
28. In the result, appeal is partly allowed.
29. Now we take up revenue’s appeal for the assessment year 1998-99 in ITA No.3677/M/03:
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