TaxTMI 
TaxTMI 
2014 (3) TMI 260
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....(A) vide order dated 18.01.2011 granted partial relief to the Assessee. Aggrieved by the aforesaid order of CIT(A), the Revenue as well as Assessee are now in appeal before us. 4. The grounds raised by the Assessee reads as under:- 1. In law and in the facts and circumstances of the case, the learned CIT (A) erred in confirming the disallowance of administrative expenses of Rs 32,74,850/- u/s 14A of The IT Act by applying formula of 0.5% of the investment as done by the Ld. A.O. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT (A) erred in rejecting the appellant's claim that the leasehold rights for 99 years was a intangible asset envisaged in section 32 of the IT. Act and consequently erred in not accepting the appellant's claim of depreciation thereon. 3. Without prejudice to the above the Ld. CIT (A) ought to have allowed a deduction equal to some attributable to relevant previous year (being total premium paid divided by 99 years) because the lease is operative for the period of 99 years. 4. Without prejudice to the above the LD. CIT (A) erred in not allowing the expenditure u\s 37(1) of The IT Act as revenue expe....
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....938/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) after considering the submissions of the Assessee granted partial relief to the Assessee by holding as under:- "3.2 I have considered the assessment order and the above contentions, it is noticed that the appellant had made investment out of Contingency Reserves as statutorily required and further it had availability of shareholders fund of Rs.2607 crores which is much more than the investment, income from which is exempt. Thus, following ratio of decision of Bombay H.C. in the case of Reliance Utility Ltd and decision of ITAT Ahmedabad in the case of Hipolin Ltd. referred to earlier, the disallowance of interest of Rs.23,81,088/- made u/s 14A is deleted. Thus, the appellant gets relief of Rs.23,81,088/-. So far as, disallowance of administrative expenses of Rs.32,74,850/- is concerned the appellant has argued that no specific expenditure is incurred for such investment. It is held that a part of the expenditure out of administrative activity is required to be considered for the purpose of Section 14A. The Assessing Officer has therefore, rightly disallowed the amount of Rs. 32,74,850/- whic....
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....e 8D were not applicable, the A.O. would be duty bound to compute the expenditure of disallowance by the applying a reasonable method. It is also a fact that in the Assessee's own case for A.Y.06-07, the Co-ordinate Bench of Tribunal has deleted the disallowance. The year under appeal before us is A.Y. 07-08 and therefore as per the decision of Hon'ble Bombay High Court in the case of Godrej Boyce (supra) the provisions of Section Rule 8D are not applicable to the year under consideration. Before us the Assessee has not placed any material to demonstrate the number of transactions and the details of receipt of exempt income. The Assessee has also not been able to demonstrate that no administrative expenses at all have been incurred for earning the exempt income to the extent of Rs. 6.27 crore. We also find CIT(A) while deleting the disallowance to the extent of Rs. 32.74 lacs has not given any detailed finding but by passing a very cryptic order has summarily upheld the disallowance It is a settled law that the principle of res judicata is not applicable in income tax matters and each assessment year is separate unit of assesssment. Considering the totality of the facts, we....
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....4,26,81,418/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) upheld the order of A.O. by holding as under:- 4.2 I have considered the facts of the case and the submissions of the appellant. I am not inclined to accept the contentions of the appellant since the Assessing Officer had already considered all such submissions including the ratio of various case laws relied upon and judiciously rebutted or given reasoning for non acceptance of same. Similar issue in the appellant's own case (The erstwhile companies viz. Torrent Power Sec. Ltd. (TPSEC) and Torrent Power AEC Ltd. (PAEC) now amalgamated with appellant company) the Hon. ITAT Ahmedabad 'D' bench in the appellant's M/s Torrent Power SEC Ltd. {Income Tax Act No. 1998/Ahd/2006/ c.o. 254 /Ahd/2006 (a/o Income Tax Act 1998 /Ahd/2006} case for A.Y. 02-03 vide order dt: 23-12-08 had already considered issue in respect of leasehold rights on land so acquired and claim of depreciation and held against the appellant. Since the Hon'ble ITAT Ahmedabad after considering all the facts and circumstances including the ratios of various case laws held against the appellant not only....
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....ithout claiming the same in return of income is also against the settled principle of claim of any such deduction as held by the Hon'ble Supreme Court in the case of - Goetze (India) Ltd. vs. CIT (2006) 284 ITR 323 (Supreme Court). d) By accepting the appellant's claim of allowability of entire expenditure as revenue not only reduce the returned income of previous year but also effect the assessed income of earlier year and, therefore, has cascading effect for which there is no scope of rectification in the Act. Respectfully following the Hon'ble ITAT's order in the appellant's case which is binding also and also considering the distinguishable facts and reasons for non applicability of ratio of Hon'ble Gujarat High Court in the case of Sun Pharmaceuticals (supra), the appellant's ground is rejected. 13. Aggrieved by the order of CIT(A), the Assessee is now in appeal before us. Before us, at the outset, the ld. A.R. submitted that on identical facts in the Assessee's own case for A.Y. 06-07, the issue has been decided in favour of the Assessee. He placed on record, the copy of the aforesaid order by Tribunal in ITA No. 1865/AHD/2010 for A.Y.....
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....advance rent and hence, allowable as revenue expenditure. After going through the lease agreement the A.O. disallowed the claim holding that the assessee had acquired a benefit of enduring nature in the form of use of land for a period of 99 years; that the land had been transferred through a registered deed involving transfer of immovable property and thus, the assessee had acquired a fixed asset in the form of a parcel of land. The Tribunal held that the lease rent was deductible. On appeal to the High Court: Held, dismissing the appeal, that the Tribunal had found that the land in question was not acquired by the assessee. Merely because the deed was registered the transaction in question would not assume a different character. The lease rent was very nominal. By obtaining the land on lease the capital structure of the assessee did not undergo any change. The assessee only acquired a facility to carry on business profitably by paying nominal lease rent. The lease rent paid by the assessee to GIDC was allowable as revenue expenditure," 4. On careful reading of the judgment of Sun Pharmaceuticals Ind. Ltd. (supra), we have found that the issue was confined to the question....
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....g reasonable opportunity of hearing to the Assessee. Thus this ground of Assessee is allowed for statistical purposes. 16. In the result, the appeal of the Assessee is partly allowed for statistical purposes. ITA No. 955/AHD/2011 Revenue's appeal. Ground no. 1 is with respect to disallowance under section 14A. 17. The facts of the case of this ground are interconnected with ground no. 1 of Assessee's appeal in ITA No. 922/AHD/2011. We while disposing of the aforesaid ground hereinabove have partly allowed the appeal of Assessee. We therefore for similar reasons partly allow the present ground of Revenue. Thus this ground of the Revenue is partly allowed. Ground no. 2 is with respect to disallowance of fees paid for new project at Bhuvneshwar:- 18. During the course of assessment proceedings, A.O. noticed that Assessee had paid Rs.12,28,579/- towards fees for study relating to new project at Bhuvneshwar to Earnst and Young . The A.O. was of the view that since the amount was paid for new project, it would be capital in nature and therefore disallowed the same. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) deleted the addi....