Tax Appeals Outcome: Revenue dismissed for 2012-13, 2013-14; Partial success for 2008-09, 2009-10.

The appeals filed by the Revenue for the assessment years 2012-13 and 2013-14 were dismissed. The appeal filed by the Revenue for the assessment year 2008-09 was partly allowed, the appeal filed by the assessee for the assessment year 2009-10 was partly allowed, and the cross objection filed by the assessee for the assessment year 2013-14 was partly allowed for statistical purposes.

---

---

Issues Involved:
1. Condonation of delay in filing appeals.
2. Disallowance of amount released from reserves.
3. Addition of interest income under tonnage tax.
4. Disallowance under Section 14A.
5. Disallowance of interest cost on borrowings.
6. Validity of reopening of assessment under Section 147.
7. Re-computation of book profit under Section 115JB.
8. Disallowance of notional interest on advances to subsidiaries.
9. Disallowance of advertisement expenditure.
10. Disallowance of loss on redemption of FCCBs.
11. Disallowance of Forex monetary item translation difference.
12. Transfer pricing adjustment to deduction claimed under Section 80IA.
13. Depreciation on franchisee rights of IPL.
14. Treatment of subsidy from Government.
15. Disallowance of payment to Vasthu Consultant.
16. Depreciation charges on amount paid to consultant.
17. Addition towards provision for leave encashment.
18. Disallowance of interest paid on TDS under MAT provisions.
19. Depreciation on UPS.

Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The Tribunal condoned the delay in filing appeals for the assessment years 2012-13 and 2013-14, accepting the Revenue's explanation that the delay was due to a reasonable cause.

2. Disallowance of Amount Released from Reserves:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance made by the AO on the amount released from reserves. It was determined that the entries passed in the books of accounts were not determinative for computing the correct income of the assessee.

3. Addition of Interest Income under Tonnage Tax:
The Tribunal reversed the CIT(A)'s decision and held that interest income earned by the assessee from deposits is not derived from shipping business and is not entitled to tonnage tax scheme benefits.

4. Disallowance under Section 14A:
The Tribunal upheld the CIT(A)'s decision to direct the AO to recompute the disallowance under Section 14A by taking into account only those investments which yielded exempt income for the year.

5. Disallowance of Interest Cost on Borrowings:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance of interest cost on borrowings, stating that the investments in subsidiaries were strategic and for business purposes.

6. Validity of Reopening of Assessment under Section 147:
The assessee did not press the ground challenging the reopening of assessment, and thus, the ground was dismissed as not pressed.

7. Re-computation of Book Profit under Section 115JB:
The Tribunal directed the AO to delete the addition made towards disallowance under Section 14A while computing book profit under Section 115JB, following the decision of ITAT, Delhi Special Bench in the case of ACIT vs. Vireet Investment Pvt. Ltd.

8. Disallowance of Notional Interest on Advances to Subsidiaries:
The Tribunal upheld the CIT(A)'s decision to delete the notional interest on advances to subsidiaries, following the decision in the assessee's own case for earlier years.

9. Disallowance of Advertisement Expenditure:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance of advertisement expenditure paid to M/s. Kalaignar TV Pvt. Ltd., stating that the expenditure was genuine and incurred wholly and exclusively for business purposes.

10. Disallowance of Loss on Redemption of FCCBs:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance of loss on redemption of FCCBs, following the Supreme Court's decision in the case of CIT vs. Woodward Governor India P. Ltd.

11. Disallowance of Forex Monetary Item Translation Difference:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance of Forex monetary item translation difference, citing the Supreme Court's decision in the case of ONGC Ltd. vs. CIT.

12. Transfer Pricing Adjustment to Deduction Claimed under Section 80IA:
The Tribunal upheld the CIT(A)'s decision to delete the TP adjustment on deduction claimed under Section 80IA, following the decision in the assessee's own case for earlier years.

13. Depreciation on Franchisee Rights of IPL:
The Tribunal upheld the CIT(A)'s decision to allow depreciation on the total value of franchisee rights capitalized in the books of accounts, following the decision in the assessee's own case for earlier years.

14. Treatment of Subsidy from Government:
The Tribunal upheld the CIT(A)'s decision to treat the subsidy received from the Government of Maharashtra as a capital receipt, following the decision in the assessee's own case for earlier years.

15. Disallowance of Payment to Vasthu Consultant:
The Tribunal confirmed the disallowance of payment to M/s. Rishividya Consultants Pvt. Ltd., following the decision in the assessee's own case for earlier years.

16. Depreciation Charges on Amount Paid to Consultant:
The Tribunal confirmed the disallowance of depreciation charges on the amount paid to consultant Dr. K. Venkatesan, following the decision in the assessee's own case for earlier years.

17. Addition towards Provision for Leave Encashment:
The Tribunal set aside the issue to the file of the AO to decide after the Supreme Court's decision on the deductibility of provision for leave encashment in light of the amended provisions of Section 43B(f).

18. Disallowance of Interest Paid on TDS under MAT Provisions:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance of interest paid on TDS under MAT provisions, stating that TDS is not an income tax of the assessee and hence, interest on TDS cannot be added back while computing book profit under Section 115JB.

19. Depreciation on UPS:
The Tribunal upheld the CIT(A)'s decision to allow depreciation on UPS at 60%, considering it as an integral part of the computer system, following the decision in the assessee's own case for earlier years.

Conclusion:
The appeals filed by the Revenue for the assessment years 2012-13 and 2013-14 were dismissed, the appeal filed by the Revenue for the assessment year 2008-09 was partly allowed, the appeal filed by the assessee for the assessment year 2009-10 was partly allowed, and the cross objection filed by the assessee for the assessment year 2013-14 was partly allowed for statistical purposes.

---