TaxTMI 
TaxTMI 
2016 (10) TMI 319
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....7.03.2008 for AY 2004-05. ITA No. 2273/Ahd/2011 is the appeal filed by the assessee against the order of the ld. Commissioner of Income-Tax (Appeals)-XI, Ahmedabad dated 17.06.2011 for AY 2002-03. Since all these appeals involve common issues, these were heard together and are being disposed of by this consolidated order for the sake of convenience. 2. At the time of hearing before us, at the outset, ld. Counsel for the assessee submitted that he is withdrawing the appeal bearing ITA No.2273/Ahd/2011 for AY 2002-03; hence the said appeal of the assessee is dismissed as withdrawn. 3. Cross appeals for AY 2004-05 3.1 The Revenue has raised following grounds:- 1. The CIT (A) has erred in law and on facts in deleting the addit....
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....ect legal position as held by the Hon'ble ITAT, Ahmedabad in the case of Sarabhai Holdings Pvt Ltd vide order dated 08.08.2005 in ITA No.1617/Ahd/1999 wherein it was held that corporate assessee were required to follow mercantile system of accounting mandatorily and hence the income on bonds was required to be shown on accrual basis. 6. On the facts and in the circumstances of the case and in law, the CIT (A) ought to have upheld the order of the A.O. 3.2 Assessee has taken following grounds:- 1. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income-tax (Appeals) has grossly erred in points of law and facts. 2. In law and in facts and circumstances of the Appe....
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....ssment order and the above submissions. I find that the issue is now covered by the decision of the ITAT, Ahmedabad in the case of Kishan Discretionary Family Trust dated 02.11.2007 for AY 2003-04, whereby the similar additions have been deleted by the ITAT. For this reason following the decision of ITAT, the AO is directed to delete the addition as per the directions contained in the above decision of ITAT, Ahmedabad." 4.1 Aggrieved, the Revenue preferred the present appeal. 4.2 Ld. Departmental Representative relied on the order of Assessing Officer. 4.3 Ld. Counsel for the assessee, on the other hand contends that this issue is covered in favour of the assessee by the decision of the Tribunal in assessee's own case for AY 2002-0....
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....authorities below. We find force in the submissions of ld. Counsel for the assessee that the issue has been already decided by ITAT in assessee's own case for AY 2002-03 in ITA No.1244/Ahd/2006, wherein the Tribunal, following the decision in the case of Kishan Discretionary Family Trust vs. ACIT in ITA No. 1850/Ahd/2007 dated 02.11.2007, held that the assessee has right to adopt the changed system of accounting and by changing the system of accounting from mercantile to cash was a bona fide change. Respectfully following ITAT judgment in assessee's own case (supra), we uphold the order of the ld. CIT(A) in this regard. Accordingly grounds in this behalf and the appeal of the Revenue are dismissed. 5. Coming to assessee's appeal for AY 2....
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....6.2 Aggrieved by the order of the Assessing Officer, the assessee went in appeal before the ld. CIT(A) who, after considering the submissions of the assessee-company, upheld the additions made by Assessing Officer; however, directed him to verify the claim of the assessee w.r.t. exempted income, by following observations:- "5.2 I have considered the assessment order and the above submissions. In my view when the appellant itself has explained before the AO that the interest of Rs. 8,61,050/- was relating to the borrowings which were used for acquiring shares, the interest so paid by the appellant is directly related to earning of exempted and therefore, the AO was justified in making such disallowance in so far as prorate expenses ....
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.... of the interest expenses of Nirman Soaps & Detergents Pvt Ltd and Navin Detergent Pvt Ltd, which requires to be verified at the Assessing Officer's level alongwith other relevant facts and circumstances of the case alongwith the case law relied by the assessee in the case of UTI Bank Ltd (supra). Therefore, in the interest of substantial justice, we set aside this issue to the file of the ld. Assessing Officer with a direction to decide the same afresh in accordance with law, after providing due opportunity of being heard to the assessee. Thus, these grounds are allowed for statistical purposes. 7. Ground No.4, which relates to disallowance of interest expenses of Rs. 1,02,74,427/- u/s 14A, is also similar to the issue we decided above ....