2015 (8) TMI 549

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.... 2. First we take up assessee's appeal in ITA No.6630/Mum/2010. The assesee has taken the following grounds of appeal. "1. On the facts and in the circumstances of the case and in law, the learned AO has erred in disallowing an additional sum of Rs. 32,19,195/- u/s. 14A read with rule 8D. The learned AO be directed to delete the disallowance so made. 2. On the facts and in the circumstances of the case and in law, the AO erred in disallowing an amount of Rs. 13,03,506/- claim u/s. 35D towards 1/5th of the share issue expense incurred in F.Y. 2006-07, on account of expansion of business." 2.1 Ground no.1 relates to disallowance of Rs. 32,19,195/- made by the AO under section 14A of the Income Tax Act, 1961 r.w. Rule 8D of the I....

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....y the assessee. The disallowance under Rule 8D can be made if AO is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure. Hence, in view of our above observation, this issue is restored back to the file of AO with a direction to give the assessee a reasonable opportunity to place on record all relevant facts including its accounts and examine the computation calculation made in this regard by the assessee regarding the suo-motu disallowance of Rs. 25,34,001/-If the AO will not be satisfied with the working given by the assessee, then he will record his dissatisfaction in this regard by way of a speaking order and will be at liberty to make the disallowance on some reasonable basis. 3. Vide g....

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...., hence, deduction under section 35D of the Act is not allowable to the assessee. This issue is accordingly decided against the assessee. 4. Now we take up Revenue's appeal in ITA No.7530/Mum/2010. The grounds of appeal raised by the Revenue read as under: "1.The order of the CIT(A) is opposed to law and facts of the case. 2(a) On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in holding that the provision of Rs. 1,32,18,459/- made on account of leave salary shall he allowed as deduction as the provision was on the basis of actuarial estimation irrespective of the fact that allowance of such provision of expense is prohibited under the provisions of section 43B(f) of the I.T. Act. 2(b) O....

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....um/2008. Aggrieved by the order of Ld. CIT(A) the Revenue has come in appeal before us. 4.2 At the outset Ld. AR of the assessee has produced before us a copy of order of the Tribunal in the case of the sister concern of the assessee M/s. Birla Insurance Advisory & Broking Services Ltd., in ITA No.7531/Mum/2010. The Tribunal in the said case has restored the matter on the identical issue to the file of the AO while relying upon the decision in the case of Essar Exploration and Production India Ltd. vs. ACIT in ITA No.6189/Mum/2011 order dated 8/8/2012. The operating part of the order for the sake of convenience is reproduced as under: "3. At the outset Ld. AR of the assessee has produced before us a copy of order of the Tribunal dated....

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....ide Industries Ltd (supra) by its order dated 8.9.2008 in SLP No.12060/2008 has stayed the operation of judgment of Hon'ble Calcutta High Court. Further, it is also a fact that Hon'ble Bombay High Court has admitted the issue under consideration in the appeal filed by department in the case of Universal Medicare Pvt Ltd (supra). At the time of hearing, ld A.R. submitted that the said appeal is yet to be disposed of. We also observe that ITAT Kolkata Bench by its order dated 30.1.2012 considered the said issue and by following earlier decision on identical issue in the case Ernst & Young Pvt Ltd. (supra) has restored the matter to the file of AC with a direction to adjudicate the same as per decision of Hon'ble apex Court in the ....