TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal upholds Revenue's appeals, directs independent determination of disallowance for exempt income expenses.</h1> <h3>DCIT, Ci rcle-4 Versus M/s Jay Shree Tea & Industr ies Ltd.,</h3> DCIT, Ci rcle-4 Versus M/s Jay Shree Tea & Industr ies Ltd., - TMI Issues Involved:1. Deletion of addition made under Section 14A read with Rule 8D.2. Deletion of addition on account of cess paid on green tea leaf.3. Deletion of addition on account of interest on sticky loan.4. Deletion of addition of expenses related to exempt income under Section 115JB.Issue-wise Detailed Analysis:1. Deletion of Addition under Section 14A read with Rule 8D:The Revenue contested the deletion of Rs. 59,75,517/- added by the Assessing Officer (AO) under Section 14A read with Rule 8D. The AO had disallowed this interest expense, claiming the assessee did not make any disallowance for interest expense. The CIT(A) deleted the addition, noting that the assessee had sufficient own funds and did not use borrowed funds for the investments. The Tribunal upheld the CIT(A)’s decision, referencing the assessee’s own case in earlier years where similar disallowances were deleted, and the Tribunal’s decision was upheld by higher courts. The Tribunal reiterated that the assessee had sufficient own funds, making the disallowance under Rule 8D(2)(ii) inapplicable.2. Deletion of Addition on Account of Cess Paid on Green Tea Leaf:The Revenue challenged the deletion of Rs. 1,77,41,778/- related to cess paid on green tea leaf. The CIT(A) deleted the addition, citing earlier decisions in the assessee’s favor, including a judgment by the Hon’ble Calcutta High Court in the case of AFT Industries Ltd. The Tribunal upheld the CIT(A)’s decision, noting the consistency with previous rulings and confirming that the issue was covered by precedent.3. Deletion of Addition on Account of Interest on Sticky Loan:The Revenue disputed the deletion of Rs. 37.50 lakh related to interest on sticky loans. The CIT(A) deleted this addition, referencing the Tribunal’s decision in the assessee’s own case for earlier years. The Tribunal upheld the CIT(A)’s decision, noting that similar issues had been consistently decided in favor of the assessee in prior years.4. Deletion of Addition of Expenses Related to Exempt Income under Section 115JB:The Revenue appealed against the deletion of Rs. 59,75,517/- added by the AO while determining the book profit under Section 115JB. The CIT(A) deleted the addition, referencing earlier decisions in the assessee’s favor. However, the Tribunal noted that subsequent to the ITAT order, the Hon’ble jurisdictional High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. held that disallowance under Section 14A cannot be equated with disallowance under Section 115JB. The Tribunal directed the AO to independently work out the disallowance under Section 115JB, considering the expenses debited in the profit & loss account, thus partly allowing the Revenue’s appeal on this ground.Conclusion:The Tribunal partly allowed the Revenue’s appeals, upholding the CIT(A)’s decisions on the first three issues but directing the AO to independently determine the disallowance under Section 115JB for the fourth issue. The Tribunal’s decisions were consistent with precedents and earlier rulings in the assessee’s own cases.
TaxTMI 
TaxTMI 
