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1 - 10 of 15 (2.71 seconds)Section 35DDA in The Income Tax Act, 1961 [Entire Act]
The Industrial Disputes Act, 1947
K. Ravindranathan Nair vs Commissioner Of Income Tax, Ernakulam on 30 November, 2000
In my view the facts of the case of K. Ravindranathan Nair v. CIT [2001]
247 ITR 178 (SC) relied upon by the appellant are similar to those of the
appellant's case. In that case, where the assessee, processing
cashewnats in ten units, closed some of the units in the wake of labour
disputes, and carried on the business in the remaining units, the
expenditure incurred under a settlement with the trade union
representing the workers was allowable as business expenditure, since
it was incurred in connection with the industrial health of the business
as a whole.
Jayshree Tea & Industries Ltd. vs Cit on 18 June, 2004
Similarly we also find support & guidance from the judgment of Hon'ble
Calcutta High Court in the case of Jayshree Tea & Industries Limited vs. CIT
reported in 143 taxman 143 has decided the issue in favour of assessee. The
relevant extract of the judgment is reproduced below :
Shree Meenakshi Mills Ltd., Madurai vs Commissioner Of Income-Tax, Madras on 19 September, 1966
DCIT Cir-12, Kol. Vs. M/s Linde India Ltd. Page 6
The ratios laid down by the Hon'ble Courts in the above cases are applicable
to the facts of the case in hand. In the instant case the assessee was having
several units and few of them were close down. All the units of the assessee
constitute a single business. In consequence to the closure of the units based
in the Chennai, the assessee had to pay certain compensation over and
above the VRS to the employees, therefore in our considered view the extra
payment is eligible for deduction under section 37(1) of the Act. In view of
above we do not find any reason to interfere in the order of ld CIT(A). We hold
accordingly and this ground of appeal of the Revenue is dismissed.
Travancore Tea Estates Co. Ltd. vs Commissioner Of Income Tax, Cochin on 17 December, 1997
In the case of Travancore Tea Estates Co.
Ltd. V. CIT [19792] 197 ITR 528 (Ker), it has been held that under sec.
28, a bad debt which cannot be written off may be allowed as a trading
loss, provided the loss is incurred wholly and exclusively for the purpose
of the business of the assessee.
Commissioner Of Income-Tax vs Inden Biselers on 7 September, 1989
In the case of CIT v. Inden Biselers
[1989] 47 Taxman 225 [1990] 181 ITR 69 (Mad), it has been held that
'even though the expenditure is not admissible for the computation of
the total income either as a bad debt or as an expenditure wholly
incurred for the purpose of business, still, it can be allowed as an
expenditure as a trading loss if it arises directly from carrying on the
business and is incidental to the business. The facts of the reported
cases are similar to those of the appellant's case. Therefore, I am of the
view that the Assessing Officer was not justified in disallowing the claim
of loss of bad advances written off as a trading loss. Therefore, the
addition of Rs.36,99,359/- is deleted."
Section 35 in The Delhi Development Authority Act, 1957 [Entire Act]
Life Insurance Corporation Of ... vs Commissioner Of Income Tax, Bombay on 19 February, 1996
In the case of CIT v. Budhraja & Co. (1993) 204 ITR 656 (Ori), it has
been held that payment of accrued liability to pay retrenchment
compensation under section 25F of Industrial Disputes Act is an
allowable deduction as business expenditure - CIT v. J.C. Budharaj &
Co. (1993) 204 ITR 656 (Ori), - where services are terminated by
payment of compensation with the result that a recurring liability is got
rid of, the Hon'ble Bombay High Court in the case of Life Insurance
Corporation of India v. CIT [1979] 119 ITR 900 (Bom) held that the
amount paid by way of compensation is in the nature of revenue
expenditure. The ratio laid down in the cases cited here are, in my view,
applicable to the facts of the case. Further, the foremost condition that
in order to sustain a claim for deduction by way of business expenditure
under sec. 37(1) of the Act, the expenditure must have been incurred
for the purpose of a business which was in existence in the year of
ITA No.323/Kol/2014 A.Y. 2006-07
DCIT Cir-12, Kol. Vs. M/s Linde India Ltd. Page 4
account, the profits of which are under am, is fulfilled in the appellant's
case. Having regard to the facts and circumstances of the case, it is
held that the Assessing Officer was not justified in restricting the claim
of expenditure to one-fifth and disallowing expending to the extent of
Rs.44,77,420/-. Thus, the addition made by him is hereby deleted and
this ground of appeal is allowed."