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2018 (8) TMI 1136
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.... 15,85,,719/- made by the AO on account of depreciation claimed being 40% on Aircraft as the Aircraft was currently not in use.? 4. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) in deleting the disallowances of Rs. 4,95,74,440/- made by the AO on account of unpaid operational charges to M/s ONGC.? 5. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the disallowances of Rs. 90,89,065/- made by the AO on account of expenses claimed as previous year adjustment under the head Admn. & Other expenses? 6. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the disallowances of Rs. 4,42,355/- made by the AO on account of provision of Gratuity? 7. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the disallowances of Rs. 12,66,36,468/- 8. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. 2. The brief facts of the case are that the assessee filed return of income showing loss of Rs. 39,56,19,757/- on 15.09.2011. The case was selected for scrutiny and ....
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....rther submitted written reply, but the Assessing Officer was not convinced therewith. The Assessing Officer noted that no such expenses were debited in earlier years although business of the assessee remained the same with ONGC. He accordingly disallowed the entire operational charges claimed and added the same to the total income of the assessee. 6. It was further noticed that in the profit and loss account, the assessee had claimed expenses of Rs. 90,89,065/- as previous years adjustment under the head administration and other expenses. The assessee was asked to file the details to justify these expenses, but the assessee stated that the expenditure stands incurred for the purpose of business, debited to administrative or other heads and so, the same are required to be allowed. The Assessing Officer observed that the assessee did not discharge his obligation to explain the nature of expenses whether these expenses pertain to the current year or for previous year or the same were incurred wholly and exclusively for the purpose of business. He, therefore, disallowed these expenditure. 7. The Assessing Officer further found from the tax audit report of the assessee that the as....
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....d allow its application for exercising option for tonnage tax scheme u/s 115VP/115VR of the Act. Aggrieved with the order of Ld. CIT(A), the revenue preferred an appeal before Hon'ble ITAT who has however vide order dated 20.112009 in ITA no. 2979/Del of 2007 dismissed the appeal of revenue Now the revenue has preferred an appeal before Hon'ble Delhi Court against the order of Hon'ble IT AT. Similar treatment was given in A. Y. 2007- 08, 2008-09 & 2009-10 also. During the year under consideration the appeal is pending before Hon'ble Supreme Court of India. Based on the aforesaid facts, the claim of the assessee to treat shipping unit exempt is hereby rejected and same is added to the book profit for working out income under MAT as the matter is still sub-judice. The income claimed as exempt in the computation of income for calculation of book profit as per MAT uls 115 va is accordingly not allowed to the assessee and an addition of Rs. 12,66,36,468/- is made on this account. Accordingly, the Assessing Officer made addition of Rs. 12,66,36,466/-. 9. Aggrieved from the order of the Assessing Officer, the assessee appealed before the ld. CIT(A) ....
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....ief, are that during the course of assessment proceedings the Assessing Officer observed that assessee has given interest free loans to its subsidiary company M/s. Jagson Airlines Ltd. of Rs. 26,38,69,280/-. Since these funds are interest bearing in nature and the assessee has incurred financial charge of Rs. 2,53,61,633/- the Assessing Officer disallowed an amount of Rs. 2,53,61,633/- to the total income of the assessee. 12.2 Before the learned CIT (Appeals) it was submitted that the assessee company holds more than 69% of the shares of M/s. Jagson Airlines Ltd. Since M/s. Jagson Airlines Ltd. suffered huge losses, therefore, in order to run this company the assessee company has advanced interest free loan to M/s. Jagson Airlines Ltd. It was submitted that out of three aircrafts of the airlines, two aircrafts were owned by the assessee company. In order to safeguard the interest of the assessee it was necessary to feed this company also. It was accordingly argued that the advance given by the assessee company was based purely on commercial expediency. The assessee further submitted that prior to taking loans from the bank for purchase of the vessels by the assessee compan....
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....nt to advance interest free money in question to its sister concerns as the appellant company has shown a profit of Rs. 38,97,52,337/- which was sufficient to advance the money to its sister concern. The Assessing Officer has failed to appreciate that the assessee company is a major investor in Jagson Airlines Ltd and they have long business relationship as the aircrafts belonging to the assessee company were run by M/s Jagson Airlines Ltd on lease basis in last so many years. In my considered view, the onus, which was on the Assessing Officer for making the disallowance by bringing on record some material to show nexus between interest free advance and interest bearing loans was not at all discharged by the Assessing Officer. Moreover, there is a business expediency and interest of the assessee company in M/s. Jagson Airlines Ltd due to which loans were given by the assessee company. Therefore, in my considered opinion, the disallowance was made by the Assessing Officer was on a wrong footing and unsustainable. 3.5 The decision relied upon by the appellant company also support the case of the assessee. In the case of CIT Vs. Reliance Utilities and Power Ltd 2009-TIOL-27-H....
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....arned CIT (Appeals). He submitted that when the interest free funds available with the assessee are sufficient to advance interest free loan to the sister concerns, therefore, in view of the decision of Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities and Power Ltd. 2009-TIOL-27- HC-MUM-IT, no disallowance is called for. 12.7 We have considered the rival arguments made by both the sides and perused the material available on record. The findings given by the learned CIT (Appeals) that the interest free funds available with the company were sufficient to advance interest free advance could not be controverted by the learned Departmental Representative. Therefore, in view of the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities and Power Ltd. (supra) where it has been held that if the interest free funds are sufficient to make the investment the presumption would arise that investment would be out of interest free funds generated or available with the company if the funds are both interest free and interest bearing funds. It is also an admitted fact that the assessee company had already advanced Rs. 21,17,41,988.5 prior to ....
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....D is not at all required. Thus, Ground No 2 is allowed." 13.3 Aggrieved with such order of the learned CIT (Appeals) the Revenue is in appeal before the Tribunal. 13.4 After hearing both the sides we find the above ground raised by the Revenue is identical to ground of appeal No. 2 in ITA. No. 5915 (Del) of 2013. We have already decided the issue and the ground raised by the Revenue is dismissed. Following similar reasoning, this ground raised by the Revenue is dismissed." 15. The issues involved in ground No. 5 & 6 and ground No. 7 are also covered by the aforesaid decision of Tribunal who vide para 14.1 of its order for A.Y. 2010-11, after following its reasoning given in appeal of Revenue for 2008-09 dismissed the relevant ground of Revenue's appeal, held as under : 14.1 After hearing both the sides we find the above ground raised by the Revenue is identical to ground of appeal No. 2 in ITA. No. 4392 (Del) of 2011. We have already decided this issue and the ground raised by the Revenue has been dismissed. Following similar reasoning, this ground by the Revenue is dismissed. 16. The relevant findings of the Tribunal appeal for A.Y. 2008-09 read as under....
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....15VP/VR. Therefore, the additions of Rs. 90,89,065 on account of administration and other expenses and Rs. 4,42,355/- on account of provision for gratuity is not required at all. In view of above discussion, we observe that the ld. CIT(A) has rightly deleted the additions, challenged by Revenue by way of grounds Nos. 5, 6 & 7 of appeal. 17. The issue involved in ground No. 3 regarding deletion of disallowance of depreciation amounting to Rs. 15,85,719/- is also covered by the decision of Tribunal for A.Y. 2010-11 vide 15 to 15.1, which read as under : "15. Ground of appeal No. 4 by the Revenue reads as under :- "Whether on the facts and circumstances of the case, the ld. CIT (A) erred in deleting addition of Rs. 26,42,865/- being disallowance of depreciation on Aircrafts?" 15.1 After hearing both the sides we find the above ground is identical to ground of appeal No. 4 in ITA. No. 5915 (Del) of 2013. We have already decided the issue and the ground raised by the Revenue is dismissed. Following similar reasoning, this ground is also dismissed. From the above decision, it reveals that the Tribunal has followed its own decision in appeal of Revenue in the....