TaxTMI 
TaxTMI 
2014 (4) TMI 431
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....allowed the appeal of the assessee in respect of claim of the assessee u/s.80IA(4) by taking the price of electricity supplied by GEB. 1(b) On the facts and circumstances of the case, the Id.CIT(Appeals) as well as the Hon.ITAT did not rely on the decision in the case of Chettinad Cement Corporation Ltd. in ITA No.1026 (MDS)/2005 for A.Y.2001-Q2 on the ground that the assessee had captive power generation plant and therefore the claim was not allowable. 2(a). On the facts and in the circumstances of the case and in law, the Id.CIT(Appeals) erred in deleting the disallowance of Rs.14.91 lacs u/s. 14A towards interest and other expenses incurred in relation to exempted income of dividend and tax-free interest without taking note of landmark decision in the case of CIT(Appeals) vs Abhishek Industries Ltd., 286 ITR 01 (P & H), laying down that, in view of section 106 of the Indian Evidence Act, the facts being in the special knowledge of the assessee, it was up to him to adduce evidenced that all the borrowings were used for the purposes of business and its is assessee's own surplus funds that were invested in the shares and deposits earning exempted income and, even in case of m....
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....ase of M/s. Chettinad Cement Corporation Ltd. vs. ACIT in ITA No. 1029 (Mads.) 2005 for A.Y. 2001-02, wherein it has been held that the deduction u/s. 80IA is not available in respect of captive power plant to meet in house requirement and rate of supply. Further, the assessee was requested to show cause as to why for calculating the eligible profits of COGEN - I, COGEN -II & COGEN Unit -III for the purpose of computation of deduction u/s. 80IA, the average sale rate of Rs.2.36 per unit should not be taken by invoking the provisions of section 80IA(8) r.w.s. 80IA(10) of the Act. The assessee submitted his reply on 16.03.2009 and after considering the assessee's reply, the ld. A.O. held that the deduction under this provision is not allowable for reasons that assessee has generated the power for captive use only. As per Hon'ble ITAT, Chennai Bench in case of M/s. Chettinad Cement Corporation Ltd. vs. ACIT (supra), the assessee has not entitled to deduction u/s. 80IA(4) of the IT Act. The assessee relied upon the decision of CIT vs. DCM Shriram Consolidated Ltd. 221 CTR 519 of Delhi High Court, which was not found applicable by the A.O. for deduction u/s. 80IA. Alternatively, it was ....
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....Y. 06-07. The A.R. submitted that Hon'ble 'D' Bench in ITA No. 3530/Ahd/2008 for A.Y. 06-07 at page no.2 against the ground no.1 had confirmed the order of the CIT(A) who has allowed the deduction u/s.80IA(4) on captive power plant, where the profit was calculated on the basis of market rate of power unit on captive power plant production of unit. 5. We have heard the rival contentions and perused the material on record. The Co-ordinate 'B' Bench vide its order dated 15.02.2011 has set aside this issue in favour of the assessee. The Co-ordinate Bench has confirmed the order of the CIT(A) who had allowed the 80IA deduction on the basis of market rate of power unit computing the profit from the eligible unit u/s. 80IA(4). Accordingly, we confirm the order of the CIT(A) in appeal before us. Ground no.1 is allowed. 6. Ground no.2 is against deleting the disallowance of Rs.14,91,000/- u/s. 14A towards interest and other expenses incurred in relation to exempted income of dividend and tax-free interest. The A.O. observed that during the financial year under consideration, the assessee had received exempt income in the form of dividend of Rs.1,32,82,469/- and tax-free interest of Rs. 9,....
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.... relying upon various case laws. He further relied in case of UTI Bank Limited (2013) 215 Taxman 8 (Gujarat HC) and it was argued that Hon'ble Gujarat High Court held that if any fund of the assessee are sufficient to cover the investment then no any disallowance needs to be made u/s. 14A. He also relied upon the decision of Hon'ble Bombay High Court in case of Reliance Utilities & Power Ltd. 18 DTR 1 and argued that this issue may be decided by the Hon'ble Bench itself. 9. We have heard the rival contentions and perused the material on record. The assessee did not supply the information called for by the A.O. at the time of assessment. Therefore, we cannot decide the issue at this level. Accordingly, we set aside this issue to the A.O. and direct him to take decision after providing reasonable opportunity of being heard to the assessee. Ground no.2 is allowed for statistical purpose. 10. Ground No.3 of Revenue's appeal is against allowing the adjustment of wealth-tax liability of Rs.7.50 lacs of the Explanation below Section 115JB. The A.O. observed that as per computation of book profit u/s. 115JB, the assessee had not added back wealth-tax of Rs.7,50,000/- for the purposes of ....
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....he A.O., after considering the various case laws on this issue on page nos. 19 to 22 and held as under: "8.7 Having regard to the totality of the circumstances as mentioned above, the jurisdictional interpretation on the issue by Madras and Mumbai High Courts, as well as that of ITAT, Ahmadabad Bench, and the course of action suggested by the Hon. Supreme Court in such a situation, it is held that the AO was not justified in denying the claim of deduction u/s 80HHC while computing profits u/s.115JB. The AO is directed to recomputed the book profit u/s 115JB and allow the deduction of profit u/s 80HHC and the same is to be worked out on the basis of adjusted book profit and not on the basis of profit as computed by regular provisions. Further, the AO is also directed not to reduce or scale down the profit as per section 80HHC(1B). 15. Now the Revenue is before us. Ld. CIT D.R. vehemently argued that now Section 115JB has been amended w.e.f. 01.04.2005. As per clause iv, the amount of profits eligible for deduction u/s. 80HHC, computed under clause (a) or clause (b) or clause (c) of sub-section (3) or sub-section (3A), as the case may be, of that sections, and subject to the condit....
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....not be imported into Clause (f) of the Explanation to Section 115JB of the Act. As per Clause (f) of Explanation 1 to Section 115JB refers to amount debited to the p&l account, which can be added back to the book profit while computing the book profit u/s. 115JB. Similar views have been taken by the ITAT, Delhi Bench in case of Goetze(India) Ltd. (supra). Therefore, we held that adjustment made by the A.O. is not as per law. Accordingly, we dismiss the Revenue's appeal on this ground. 18. Revenue's appeal is partly allowed. Now we take C. O. No. 204/Ahd/2010 (Assessee's C.O.) 19. Assessee's C.O. is against the addition of provision for doubtful debt of Rs.3,00,51,177/- for computing the book profits u/s. 115JB. The A.O. observed that assessee had not added provision for bad debt and leave encashment. The A.O. gave reasonable opportunity to the assessee of being heard on this issue. The assessee has replied and after considering the assessee's reply, ld. A.O. observed that the provisions made by the assessee as per accounting standard in respect of liability can not make at ascertained liability. It is merely a provision. Such types of liabilities are covered by the Expla....
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....lity other than ascertain liability is to be considered in increasing book profit as per Explanation 1. The Hon'ble Karnataka High Court has decided this issue in case of CIT vs. Yokogawa India Ltd., [2012] 17 taxmann.com 15 (Kar.), that provision made for bad debt cannot be added back in accordance with Explanation (c) to Section 115JB(1) as same is not an ascertained liability. Ld. A.R. further relied in case of Hon'ble 'A' Bench, ITAT, Ahmadabad, in case of ACIT vs. Vodafone Essar Gujarat Ltd. in ITA No. 1999/Ahd/2008, wherein identical issue has been decided in favour of the assessee by considering the Hon'ble Karnataka High Court decision in case of CIT vs. Yokogawa India Ltd. (supra). Ld. Counsel argued that in A.Y. 06-07, Hon'ble ITAT 'D' Bench in assessee's own case has set aside this issue on the basis of finding given in A.Y. 03-04 & 05-06 vide order dated 15th February, 2011 in A.Y. 06-07. The operative portion is reproduced as under: "16. We find that the Tribunal while deciding the issue has held as under:- "14. Ground No.5 relates to deleting addition towards provisions for doubtful debts at Rs.3,76,27,965/-. The ld. CIT(A) has directed to add amount of provision in....