TaxTMI 
TaxTMI 
2017 (10) TMI 1206
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....the Income Tax Act 1961, by invoking Rule 80 when the said Rule is inapplicable to A.Y 2006-07. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the assessee has claimed that no expenditure is incurred with regard to exempt income when the assessee has in fact submitted that only Treasury Dept. expenses can, if at all be attributed to earning the exempt income and consequently only Rs. 1,77,284 qualifies for disallowance u/s 14A of the Income Tax Act, 1961. 4. On the facts and in the circumstances of the case and in law and without prejudice to above, the learned CIT(A) erred in not holding that since the tax free investments are made by the assessee out of its own funds, no amount of the interest of Rs. 247,41,36,975 paid on borrowings qualifies for disallowance u/s 11A of the Income Tax Act, 1961. 5. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not admitting the additional grounds of appeal filed by assessee. The assessee submits that the learned CIT(A) ought to have admitted the additional grounds and adjudicated them on merits. 6. On the fact....
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....he ground of the appeal raised by assessee are covered in favour of the assessee by the decision of assessee's own case for earlier assessment year. The Ld. A.R of the assessee submitted a chart showing the narration ground of appeal and the details of various orders in assessee's own case for earlier orders. The Ld. D.R for the revenue after going though the details furnished by the Ld. A.R of the assessee not disputed the contention of the Ld. A.R of the assessee. 4. Ground No. 1 relates to disallowance of amortization of premium on leasehold land of Rs. 1,57,59,706. The Ld. A.R of the assessee argued that this ground of appeal is covered in favour of assessee by the decision of Tribunal in assessee own case for A.Y 2004-05 and 2005-06. 5. We have considered the submission of the Ld. A.R of the assessee and perused the order of Tribunal for A.Y 2004-05 in ITA no. 5963/um/2011. The coordinate bench of the Tribunal in identical ground of appeal has passed the following order:- 14. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material produced before us. We find that as stands gathered from ....
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....capital expenditure, therefore the same had rightly been held as not allowable as a revenue expenditure by the lower authorities. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material produced before us. We are of the considered view that after appreciating the facts of the case in toto, it can safely be concluded that the leasehold premium amortized by the assessee corporation was in the nature of compensation paid to the landlords, in addition to the rent. We thus are of the considered view that the leasehold premium amortized by the assessee corporation, being in the nature of rent, was therefore allowable as a revenue expenditure in the hands of the assessee. We are of the considered view that our aforesaid view stands fortified by an analogy that can safely be drawn from the judgment of the Hon'ble Jurisdictional High Court in the case of Reliance Industrial Infrastructure Ltd. (supra), on the basis of which the claim of the assessee corporation towards registration and stamp duty charges of Rs. 2,47,98,757/-, as observed by us hereinabove, had been allowed as a revenue expenditure in the assessment fram....
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....und of Appeal No. 1' in the present appeal was identical to the 'Ground of Appeal No. 5' raised by the assessee corporation in its appeal before us for A.Y. 2004-05, viz. Bharat Petroleum Corporation Ltd. Vs. Additional CIT-Range-2(1), Mumbai, marked as ITA 5963/Mum/2011. The ld. D.R. had not disputed the aforesaid factual position. We have perused the orders of the lower authorities and the material produced before us. We find that the issue involved in the present appeal is identical to that as was raised before us by the assessee corporation as 'Ground of appeal No. 5' in its appeal for A.Y. 2004-05. That in the backdrop of our observations and reasonings adopted while adjudicating the 'Ground of Appeal No. 5' raised by the assessee before us in its aforesaid appeal for A.Y. 2004- 05, viz. Bharat Petroleum Corporation Ltd. Vs. Additional CITRange- 2(1), Mumbai, marked as ITA 5963/Mum/2011, our decision passed in the context of the issue under consideration shall apply mutatis mutandis in the present appeal also. We thus going by our observations and reasonings adopted while disposing of the 'Ground of appeal no. 5' raised before us in assesses own appeal for A.Y. 2004-05, therei....
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....n the present appeal. 9. Considering the decision of co-ordinate bench in assessee's own case and following the principle of consistency, ground no. 2 to 4 of appeal are allowed in favour of assessee with similar direction as contained in the order for AY 2004-05. 10. Ground No. 5 relates to not admitting the ground of appeal raised before ld CIT(A). Ground No.6 is the claim with regard to loss on Oil Bond as a business loss, which was raised as additional ground No.1 of before ld. CIT(A). The ld CIT(A) not admitted the additional ground of appeal holding that the assessee has not revised the return nor such claim was made before the AO during the assessment proceeding. It was argued that similar loss on Oil Bonds was allowed as business loss by the Tribunal in assessee's own appeal for AY 2004-05 & 2005-06. 11. Considering the contention of ld. AR of the assessee and the decision of Co-ordinate Bench in assessee's own case in ITA No. 5963 & 5966/M/2004-05 & 2005-06. We admit this ground of appeal and restored the matter to the file of CIT(A) to verify the fact and allow the claim in accordance with law and considering the decision of Tribunal in assessee's own case for AY....
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....he interest income on oil bonds, which though was shown by the assessee under the head 'Profits and gains of business', but had been assessed by the A.O. under the head 'Income from other sources'. That it was submitted by the Ld. A.R that a similar change of head of income had also been carried out by the A.O in the case of the assessee for the A.Y. 2004- 05. It was further averred by the Ld. A.R that the said change of head of income had also been assailed before us in the appeal of the assessee for A.Y. 2004-05, viz. Bharat Petroleum Corporation Ltd. Vs. Additional CIT-Range-2(1), Mumbai, marked as ITA 5963/Mum/2011. We find that the identical issue raised by the assessee in the present appeal before us was also raised in its aforesaid appeal for A.Y. 2004-05, marked as ITA 5963/Mum/2011, wherein in the backdrop of the order of the ITAT passed in the case of Mangalore Refineries and Petro Chemicals Ltd.(Supra) Vs. DCIT (ITA No. 776/Mum/2004), which thereafter had been affirmed by the Hon'ble High Court of Bombay in the case of Manglore Refineries and Petro Chemicals Ltd.(Supra), we had restored the matter to the file of the CIT(A) for re-adjudication. We thus in the backdrop of ....
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....477,35,26,537/- paid on borrowings qualifies for disallowance u/s 14A of the Income Tax Act, 1961 5. On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the oil bonds are capital assets and in confirming that the loss of Rs. 42,21,00,000/- incurred on sale of oil bonds is a capital loss and not business loss. 6. On the facts and in the circumstances of the case and in law, assessee submits that Oil bonds issued being in lieu of under recovery on sale of sensitive petroleum products are not capital assets & consequently learned CIT (A) erred in confirming Assessing Officer's action of treating loss on sale of oil bonds as capital loss and not as business loss. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming disallowance of prior period expenditure made by Assessing officer amounting to Rs. 4,32,53,288/- 8. On the facts and in the circumstances of the case and in law, the assessee submits that Interest income earned on Oil Bonds ought to be taxed as 'Profits and gains from Business and Profession' instead of 'Income from other sources'. ....
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....2006-07 which we have already restored to the file of ld. CIT(A) on the basis of decision of Tribunal in assessee's own case for AY 2004-05. Thus, considering the principle of consistency, this ground of appeal is also restored to the file of ld. CIT(A) with similar direction. 25. Ground No.7 relates to prior period expenditure. The ld. AR of the assessee argued that this ground of appeal is also covered in favour of assessee by the decision of Tribunal in assessee's own case for AY 2002-03 in ITA No. 2557/M/2011. The ld. DR for the Revenue not disputed the contention of ld. AR of the assessee. We have considered the submission of both the parties and find that the Co-ordinate Bench of Tribunal in assessee's own case for AY 2002-03 have passed the following order: "Ground No. 4. 10. This ground is against the disallowance of Rs. 5,33,97,234/- held to be prior period expenses. Similar issue was decided by coordinate bench in ITA No.1013/Mum/2001 and the operative para is reproduced below:- "2. Ground No.1 of the appeal is regarding disallowance of prior period expenses amounting to Rs. 34,51,324/-. 3. Learned Departmental Representative of the ....
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.... Ground No.8 relates to Interest Income from Oil Bonds to be taxed as Business Income. We have seen that this ground of appeal is identical to the ground no.10 of appeal for AY 2006-07 which we have restored to the file of ld. CIT(A) to decide afresh in accordance with the direction contained hereinabove. Thus, respectfully following the decision of Coordinate Bench, this ground of appeal is also restored to the file of CIT(A) to decided afresh a per the direction in appeal for AY 2006-07. In the result this ground of appeal is allowed for statistical purpose. 28. Ground No.9 relates to contribution to Rajiv Gandhi Institute of Petroleum Technology. The ld. AR of the assessee argued that the assessee contributed a sum of Rs. 1,55,00,000/- to Rajiv Gandhi Institute of Petroleum Technology. The contribution was made for promotion of efficient human resources and to meet the growing requirement of Petroleum and Energy sector. The contribution is allowable deduction under section 37 of the Act. On the other hand, the ld. DR for the Revenue supported the order of authority below. 29. We have considered the rival submission of the parties and perused the record of the case. Rajiv G....