TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 1314
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....A of the Act in respect of interest income received from deposits, management fees and corporate guarantee commission. According to the Ld. counsel, these receipts were inextricably linked to the business of the assessee. Therefore, according to the Ld. counsel, the assessee is eligible for deduction under Section 80-IA of the Act while computing taxable income. Referring to the judgment of Apex Court in ACG Associated Capsules Pvt. Ltd. (2012) 343 ITR 89, the Ld.counsel submitted that at the best, only the net profit shall be taken into consideration. The Ld.counsel submitted that netting of the expenditure/interest has to be allowed while computing the taxable income. 4. On the contrary, Shri M. Swaminathan, the Ld. Sr. Standing Counsel for the Revenue, submitted that interest income, management fees and corporate guarantee commission are not derived from the industrial undertaking, therefore, the same is not eligible for deduction under Section 80-IA of the Act. Referring to the order of the CIT(Appeals), the Ld. Sr. Standing Counsel submitted that the assessee has received interest income to the extent of Rs. 5,14,989/-, management fees to the extent of Rs. 3,54,36,933/- and c....
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....business of the assessee. Merely because there was a nexus between the business and the receipt of income, we cannot say that the income was directly derived from the business undertaking. This Tribunal is of the considered opinion that for claiming deduction under Section 80-IA(4) of the Act, the income shall have to be derived from business of developing or operating and maintaining or developing or operating and maintaining of infrastructure facility. Therefore, interest income received from deposits, management fees and corporate guarantee commission are not eligible for deduction under Section 80-IA of the Act. In fact, the CIT(Appeals) has rightly placed his reliance on the judgment of Apex Court in Sterling Foods (supra), Pandian Chemicals (supra) and Liberty India (supra). 7. We have carefully gone through the judgment of Apex Court in ACG Associated Capsules Pvt. Ltd. (supra). In the case before the Apex Court, the issue was deduction claimed by the assessee under Section 80HHC of the Act. After referring to Explanation (baa) to Section 80 HHC of the Act, the Apex Court found that 90% of net interest or net rent, which was included in the profit of the business of the ass....
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.... Section 115JA(v) of the Act, found that before the introduction of 80- IB(4) and 80-IB(5) by Finance Act 1999, there was a reference about 115JB in Section 80-IA(2) with sub-clause (iv). The change was effected in Section 115-JA consequent to splitting of Section 80-IA into Section 80-IA and 80-IB by Finance Act 1999 with effect from 01.04.2000. Therefore, the assessee is eligible for deduction under Section 80-IA or subsequently under Section 80-IB after amendment to the extent of 100% for the first five years and 30% for next five years and the deduction of profit from the book profit would be applicable during the period in which the assessee is eligible for 100%. In the absence of any express provision for allowing the deduction when the assessee itself claims at the rate of 30% at the normal computation, according to the Ld. Sr. Standing Counsel, the CIT(Appeals) has rightly confirmed the order of the Assessing Officer. 11. We have considered the rival submissions on either side and perused the relevant material available on record. Sub-section (4) of Section 80-IB of the Act clearly says that in case of industrial undertaking in the industrially backward State, specified in....
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.... Counsel submitted that by referring to the method of accounting followed by the assessee and the judgment of Apex Court in Apollo Tyres (255 ITR 273), this Tribunal decided the issue in favour of the assessee which is reported in 6 SOT 497. Therefore, according to Ld. Sr. Standing Counsel, the issue is covered in favour of the assessee by earlier order of this Tribunal. 15. We have heard Dr. Anita Sumanth, the Ld.counsel for the assessee also. The Ld.counsel submitted that this issue is covered in favour of the assessee for the assessment years 1998-99 and 1999-2000. 16. We have considered the submissions on either side and perused the relevant material available on record. As rightly submitted by the Ld. Sr. Standing Counsel for the Revenue and the Ld.counsel for the assessee, the very same issue was considered by this Tribunal for the assessment years 1998-99 and 1999-2000 and this Tribunal deleted the similar addition made by the Assessing Officer. Both, the Ld. Sr. Standing Counsel for the Revenue and the Ld.counsel for the assessee very fairly brought to the notice of the Tribunal that the issue is covered in favour of the assessee. We have carefully gone through the order ....
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.... as that of the CIT(Appeals), who passed the impugned order now under challenge before this Tribunal. In the block assessment, the CIT(Appeals) has examined the issue and found that the assessee has purchased the steel which was used in fabrication of plant. Therefore, the CIT(Appeals) has rightly allowed the claim of the assessee. 20. We have considered the rival submissions on either side and perused the relevant material available on record. The issue before this Tribunal is with regard to depreciation on the so-called purchase of steel. The Revenue claims that the assessee has not produced bills and vouchers for purchase of steel, and the claim is bogus. From the material available on record, it appears that the assessee purchased steel to the extent of Rs. 267,66,84,018/-. The Assessing Officer found that the copies of bills to support the purchase are not produced. The CIT(Appeals), by referring to the order of block assessment, found that the assessee is eligible for depreciation. 21. We have carefully gone through the order of this Tribunal for block period. The block assessment was made under old scheme, i.e. under Section 158BC of the Income-tax Act. Under the old schem....
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....his Tribunal is of the considered opinion that all the issues of depreciation shall be reconsidered by the Assessing Officer, in accordance with law, after giving a reasonable opportunity to the assessee. 24. The next ground of appeal is with regard to disallowance under Section 14A of the Act. 25. Shri M. Swaminathan, the Ld. Sr. Standing Counsel, submitted that the Assessing Officer disallowed the claim of the assessee to the extent of Rs. 2.93 Crores and the CIT(Appeals), however, allowed the claim of the assessee on the ground that the assessee has invested its own funds. According to the Ld. Sr. Standing Counsel, irrespective of investment out of its own funds, the assessee has to necessarily incur expenditure on managerial level for the purpose of taking decision to make investment. Therefore, according to the Ld. Sr. Standing Counsel, the CIT(Appeals) is not justified in allowing the claim of the assessee. 26. On the contrary, Dr. Anita Sumanth, the Ld.counsel for the assessee, submitted that the assessee invested its own funds, therefore, the assessee has not incurred any expenditure at all. Hence, there cannot be any disallowance. Therefore, according to the Ld. counsel....