Gujarat High Court
Commissioner vs Arvind on 26 March, 2012
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
Gujarat High Court Case Information System
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TAXAP/34/2011 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 34 of 2011
=========================================================
COMMISSIONER
OF INCOME TAX-I - Appellant(s)
Versus
ARVIND
MILLS LTD - Opponent(s)
=========================================================
Appearance
:
MR
MANISH BHATT, SR.ADVOCATE with MRS MAUNA M BHATT
for
Appellant: 1,
None for Opponent(s) :
1,
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CORAM
:
HONOURABLE
THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
and
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
Date
: 26/03/2012
ORAL
ORDER
(Per : HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA) This Appeal is admitted on the following substantial questions of law :
Whether the Tribunal below has substantially erred in deleting the addition of Rs.1,76,58,910=00 made on account of exchange rate fluctuation disregarding the clear finding of the Assessing Officer that share capital in the hands of the assessee was not in the nature of circulating capital.
Whether the Tribunal below has substantially erred in law in deleting the addition of Rs.21.07 lac made on account of surplus of early redemption of debentures disregarding the finding of the Assessing Officer that surplus has arisen in the course of continuing business process of the assessee.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.42.52 lac made on account of profit on forfeiture of debentures disregarding the finding of the Assessing Officer that the said surplus had arisen in the course of continuing business process of the assessee.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.46,54,429=00 made on account of commitment charges paid to Ashoka Mills disregarding the finding of the Assessing Officer that the said charges relate to period prior to commencement of production from the new machines and that the assessee itself had capitalized this amount in its books of accounts.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.29,95,452=00 made on account of retrenchment expenditure disregarding the finding of the Assessing Officer that the said expenditure gave an enduring advantage to the assessee and therefore was required to be capitalized, as also ignoring the matching concept of accrual accounting provided in Section 145 of the Act.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.77,63,386=00 made on account of technical audit fees disregarding the finding of the Assessing Officer that the said expenditure gave an enduring advantage to the assessee and therefore was required to be capitalized, as also ignoring the matching concept of accrual accounting provided in Section 145 of the Act.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.2,93,42,773=00 made on account of management surplus fees disregarding the finding of the Assessing Officer that the said expenditure gave an enduring advantage to the assessee and therefore was required to be capitalized, as also ignoring the matching concept of accrual accounting provided in Section 145 of the Act.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.94,47,117=00 made on account of fees paid to McKenzie and Company, Consultants, disregarding the finding of the Assessing Officer that the said expenditure gave an enduring advantage to the assessee and therefore was required to be capitalized, as also ignoring the matching concept of accrual accounting provided in Section 145 of the Act.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.1,74 crore made on account of disallowance of expenses related to Export Oriented Units (EOUs) disregarding the fact that the assesseed itself in the earlier assessment yeaer had conceded that it was not possible to ascertain expenses under different heads incurred by EOU and other units as also disregarding the provisions contained in Section 10(8) and (9) of the Act, as also disregarding the fact that in this process the assessee had inflated the profit pertaining to EOUs by debiting expenses to other units where the profits are taxable.
Whether the Tribunal below has substantially erred in deleting addition of Rs.1,47,27,379=00 made on account of interest pertaining to EOUs which were claimed against taxable profits in disregard to finding of the Assessing Officer that the allocation of interest expenses was required to be done as per the earlier year basis and despite there being no change in the circumstances, the Tribunal held contrary with regard to the aspect of allocation of expenses than the earlier year.
Whether the Tribunal below has substantially erred in deleting the addition of Rs.20,32,38,000=00 made on account of disallowance of depreciation on sale and lease back transactions disregarding the finding of the Assessing Officer that the said transactions were nothing but sham transactions coupled with the fact that written down value of these assets as per Income Tax records of the selling party was Nil which was revalued and sold to the assessee which was again leased back to the same selling parties, as also ignoring the provisions contained in Explanation (3) to Section 43(1) and Explanation 4A to Section 43(1) of the Act.
(Bhaskar Bhattacharya, Acting C.J.) (J.B.Pardiwala, J.) /moin Top