AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 686
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....and thereafter assessment was framed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") vide order dated 31/12/2010 and the total income was determined at Rs. 1,53,52,832/-. Aggrieved by the order of the Assessing Officer (AO), assessee carried the matter before the ld.CIT(A), who vide order dated 21/05/2012 (in Appeal No.CIT(A)-XX/704-10-11) granted partial relief to the assessee. Aggrieved by the order of ld.CIT(A), Assessee and Revenue are now in appeal(s) before us. The grounds raised by the Revenue in ITA No.1683/Ahd/2012 read as under:- 1) The Ld.Commissioner of Income-Tax (Appeals)-XX, Ahmedabad has erred in law and on facts in directing the Assessing Officer to exclude only the income on sale of DEPB while computing the deduction u/s.80IB of the Act after following the decision of the Hon'ble Supreme Court in the case of Topman Exports Vs. CIT, reported in 67 DTR 185, without appreciation the fact that the Hon'ble SC has held that both the fact value and the profit on sale of DEPB is taxable as revenue receipts and the same is not derived from eligible business / unit as held by the Hon'ble SC in the case of Liberty India vs. CIT reported in 31....
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.... the deduction and disallowed the excess claim to the extent of Rs. 7,83,848/-. Aggrieved by the order of AO, assessee carried the matter before the ld.CIT(A), who decided the issue holding as under:- "3.2. Vide para-3 of the assessment order, AO observed that the appellant claimed deduction u/s.80IB of Rs. 7,83,848/-; the said claim was revised to Rs. 9,12,158/- during the assessment proceedings; in view of Supreme Court decision cited at 317 ITR 218, DEPB income was to be excluded while calculating the deduction u/s.80IB and accordingly the deduction claimed of Rs. 7,83,848/- was being disallowed. The contention of the ld.A.R. is that in view of the recent Supreme Court decision in the case of Topman Exports Vs. CIT, only the income on sale of DEPB is to be excluded for calculation of the deduction (and not the entire sale proceeds of DEPB). Since the said decision of the Supreme Court is squarely on the issue under consideration, AO is directed to work out the income arising on the sale of DEPB and exclude the said amount for working out the eligible profit and the allowable deduction u/s.80IB. The disallowance gets reduced accordingly. This ground of appeal is partly allowed....
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....n the amounts used for making investments was required to be disallowed. He accordingly, after considering the rate of interest @12%, worked out the disallowance of Rs. 27,27,514/-. Aggrieved by the order of AO, assessee carried the matter before the ld.CIT(A) who decided the issue by holding as under:- "4.2. Vide para-6 of the assessment order, AO observed that the appellant made investment to the tune of Rs. 1,45,47,000/- in M/s.Banpal Agro Tech Pvt.Ltd. during the year; interest-free advances to the extent of Rs. 1,74,76,692/- were made; interest of Rs. 1,56,74,752/- was debited to the profit & loss account; in response to the show cause notice issued, appellant contended that the investment in M/s.Banpal Agro Tech Pvt.Ltd. was out of commercial expediency; said explanation was not satisfactory and proportionate interest disallowance @12% on the amount of Rs. 2,27,29,285/- was being made u/s.36(1)(iii), which worked out to Rs. 27,27,514/-. The ld.AR's contentions are three pronged. The first one is that no disallowance is called for u/s.14A. In this connection, it is seen that the disallowance was not made u/s.14A and therefore this contention is beside the point. Second cont....
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....h are not available to him at the relevant time. While deciding the issue, we find that ld.CIT(A) has noted that assessee could not substantiate that the amount used by the assessee for acquisition of shares of Banpal Agro Tech Pvt.Ltd. was on account of commercial expediency and that the argument of not utilizing the interest-free funds for making investments was made by assessee before AO. We find that on those issues apart from oral submissions, there is no material placed on record by assessee to substantiate its claim, at the same time Revenue has also not placed any material on record to controvert the observations of ld.CIT(A). In view of these facts, we are of the view that the matter needs to be restored to the file of AO for considering the submissions of the Assessee and thereafter deciding the issue on the basis of facts and circumstances of the case and in accordance with law. Needless to state that AO shall grant adequate opportunity of hearing to Assessee. Thus, this ground of Revenue and Assessee are allowed for statistical purposes. 9. In the result, the appeal of Revenue is partly allowed for statistical purposes. 10. Now we left with the Assessee's ground N....
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.... the policies was not wholly and exclusively for the purpose of business. On the contrary, it was wholly and exclusively for the personal benefit of the concerned individuals. In the light of these undisputed facts, it is to be seen whether the case laws relied on by the ld.A.R. are applicable or not. In the case cited at 323 ITR 178 (Bom.) the issue involved was whether a partner of the firm could be considered a keyman. There was a clear finding that the policy was taken for the benefit of the firm and not for the personal benefit of the partner. In the case of CIT Vs. Rajan Nanda (Delhi), at the time of taking the policy it was for the benefit of the business. The policies were assigned in favour of the beneficiaries subsequently. Therefore, it was held that the subsequent action of assigning the policies to the beneficiaries did not change the character of the policies at the time of obtaining the policies. In the case of M/s.P.G. Foils Ltd., the issue involved was whether the policy taken at a much higher value than the norms fixed by IRDA was eligible for allowance or not. In the case of Prakash Chemical Pvt.Ltd., the issue was whether the persons (on whom policies were taken....