AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1036
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.... order dated 30.03.2013 passed by the AO under s.143(3) of the Act concerning AY 2010-11. 2. The captioned appeals were heard on two different dates i.e. 27.07.2018 and 02.08.2018. Since, all these appeals pertain to same assesse and on almost similar issues, hence they are being disposed of by common order for the sake of convenience. 3. We shall first take up the appeal of the Revenue and Cross Objection of the assessee thereon concerning AY 2009-10 for adjudication purposes. ITA No. 775/Ahd/2014-AY 2009-10-Revenue's appeal 4. The grounds of appeal raised by the Revenue in the captioned appeal concerning AY 2009-10 reads as under:- "1. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 5.04 Crores being undervaluation of closing stock despite the fact that the assessee had followed exclusive method of accounting in contravention of the provisions of section 145A which mandates inclusive method for valuation of inventory. 2. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 2.57 lacs u/s 40(a)(ia) overlooking the fact that during assessment proceedings the same was claimed as paid to Adani Power Ltd. without furnishing any reas....
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....s not called for. 6. The learned DR for the Revenue, on the other hand, relied upon the order of the AO. 7. We have carefully considered the rival submissions on the issue towards applicability of Section 145A of the Act as well as perused the order of the lower authorities. While it is a case of the Revenue that the element of excise duty/CENVAT etc. would represent part of the closing stock of the assessee in terms of Section 145A of the Act, it is the case of the assessee on the other hand that Section 145A of the Act has no application to the facts of the case. It is further case of the assessee that assessee follows exclusive method of accounting for valuation of inventory and therefore, entire exercise would be tax neutral. The CIT(A) has examined the issue on facts and binding judicial precedents and concluded the issue in favour of the assessee. In the absence of any impact on the profitability of the assessee per se due to method of accounting followed, we do not see any error in the conclusion drawn by the CIT(A). In parity with judicial precedents cited, we decline to interfere with the order of the CIT(A) on the issue. 8. In the result, Ground no.1 of the Revenue's a....
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....foresaid disallowance of amortization of lease hold lands. We thus decline to interfere. 13. In the result, Ground no.3 of the Revenue's appeal is dismissed. 14. In the result, appeal of Revenue in ITA No.775/Ahd/2014 for AY 2009-10 is dismissed. CO No. 171/Ahd/2014-AY 2009-10-Assessee's appeal 15. The grounds of appeal raised by the Revenue in the captioned cross objection concerning AY 2009-10 reads as under:- "1. In law and in the facts and circumstances of the Respondent's case, the learned CIT(A) has grossly erred in upholding disallowance of the Respondent's claim for deduction of Rs. 3,71,271 under Section 80G merely because the Receipt for the donation in question was in the name of Adani Energy Ltd. whose Division which had paid the donation had been merged (under a Scheme of Demerger) with the Respondent and for which reason the donation had been accounted in the appellant's Profit and Loss Account along with other expenditure and that therefore, the said Adani Energy Ltd. had not claimed deduction for the same. 2. In law and in the facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred in dismissing Ground No. 14 ....
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.... the other company and merged with assessee's company, there is no warrant to deny the deduction in the hands of the resulting company (assessee). It shall however be open to the AO to verify as to whether the demerged company (Adani Energy Ltd.) has already claimed deduction or not. Where the assessee proves to the satisfaction of the AO that no deduction has been claimed under s.80G of the Act by the demerged company towards the amount in question, the AO shall allow the deduction in the hands of the assessee company after verifying the receipts etc. in accordance with law. 17. In the result, Ground no.1 of assessee's Cross Objection is allowed for statistical purposes. 18. The Ground no.2 of the assessee's Cross Objection is not pressed and accordingly dismissed. 19. The Ground no.3 concerns disallowances of preliminary expenses amounting to Rs. 10,28,028/- claimed under s.35D of the Act. It was pointed out that similar claim was made in the earlier year and similar controversy arose in the earlier year and adjudicated in favour of the assessee. For this purpose, the decision of the co-ordinate bench of the Tribunal concerning AY 2008-09 in assessee's own case in ITA Nos. 224....
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....the remaining claim of goodwill amount of Rs. 3,22,38,166/- by revising the amount of goodwill carried forward owing to notional depreciation in AY 2006-07 and 2007-08. The learned AR referred to the tabulated statement worked out by the AO as reproduced in the assessment order concerning AY 2012-13 which is reproduced hereunder for easy reference and understanding of the subject: Particulars FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 Goodwill generated 339,890,680 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 Depreciation 42,486,335 74,351,086 55,763,315 41,822,486 31,366,865 23,525,148 Closing WDV 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 70,575,445 Particulars FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 Goodwill generated 339,890,680 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 Depreciation 42,486,335 74,351,086 55,763,315 41,822,486 31,366,865 23,525,148 Closing WDV 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 70,575,445 21.1 As stated on behalf of the assessee, the assessee company was formed as a resultant company out of the demerger....
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....h depreciation on goodwill in this year. It is the case of the assessee by way of additional ground that the eligibility of depreciation on goodwill is not in dispute. The AO has simply disputed the quantification of eligible depreciation spanning over various financial years on the ground that depreciation is eligible from the appointed date as sanctioned by the Hon'ble Gujarat High Court. Thus, on account of such re-working, the assessee has presented a new claim towards depreciation on goodwill in the impugned AY 2009-10 on the ground that all the relevant facts are available on record which are duly admitted by the Revenue. Therefore, the assessee cannot be deprived of the eligible depreciation as computed by the AO himself concerning AY 2009-10. 21.4 A legal issue also cropped up in the course of hearing as to whether additional ground could be raised in a cross objection filed by the assessee under s.253(4) of the Act. On being enquired on this aspect of the matter, it was submitted on behalf of the assessee that there is no perceptible distinction between the position of law qua cross objection in the matter of filing additional ground. It was submitted that a cross objecti....
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....advert to cross appeals of assessee and Revenue concerning AY 2010-11. ITA No. 2273/Ahd/2015-AY 2010-11-Assessee's appeal 25. The grounds of appeal raised by the assessee in the captioned appeal concerning AY 2010-11 reads as under:- "1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has grossly erred in rejecting additional claim made by the appellant for claiming depreciation on goodwill arising on demerger of Adani Energy Ltd from Adani Gas Ltd. to the tune of Rs. 4,24,86,335/- on the ground that same was not claimed through revised return of income but claimed during the course of assessment proceedings. 2. In law and on facts and circumstances of the appellant's case, the Ld. CIT(A) has grossly erred by rejecting the additional claim of depreciation on goodwill contending that the said claim is not duly supported by Tax Auditor's report but has failed to appreciate the fact that such claim is duly covered by decision of Hon'ble Supreme Court in case of CIT V/s Smifs Securities Limited (2012) 24 taxman.com222 and identical claim is already allowed by Assessing Officer while passing the assessment order. 1.2 In law and in facts a....
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....s order. 28 In the result, Ground No.1 of the assessee's appeal is allowed. 29. Ground No.2 of the assessee's appeal concerns disallowance of preliminary expenses under s.35D of the Act amounting to Rs. 10,02,818/-. The identical issue arose in AY 2009-10 and adjudicated in favour of the assessee as per para no.19 of this order. In consonance thereof, the assessee would be entitled to benefit under s.35D of the Act for the aforesaid amount. 775/Ahd/14 & 9 Ors. [Adani Gas Ltd.] A.Y. 2009-10 to 2013-14 - 16 - 30. In the result, Ground No.2 of the assessee's appeal is allowed. 31. In the result, appeal of the assessee for AY 2010-11 is allowed. ITA No. 2346/Ahd/2015-AY 2010-11-Revenue's appeal 32. Now, we advert to the Revenue's appeal concerning AY 2010-11. 33. The grounds of appeal raised by the Revenue in the captioned appeal concerning AY 2010-11 reads as under:- "1. The CIT(A) has erred in law and on facts in deleting the addition made of Rs. 2,66,56,242/- on account of unutilized CENVAT credit u/s.145A of the Act. 2. The CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 38,30,834/- being amortization of lease charges. 34. Ground No.1 concern....
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....e Revenue to seek restoration of its appeal on showing inapplicability of the aforesaid CBDT Circular in any manner. 42. In the result, the appeal of the Revenue is dismissed. Assessee's Cross Objection No. 202/Ahd/2015-AY 2011-12 43. The grounds of appeal raised by the assessee in the captioned cross objection concerning AY 2011-12 reads as under:- "1. In law and in the facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred in not adjudicating upon Ground No. 1 of the respondent's appeal challenging the validity of the assessment order impugned before him, on the ground that it was general in nature. 2. In law and in the facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred in upholding the disallowance of the respondent's claim for deduction for preliminary expenses of Rs. 5,02,818 u/s. 35D after following his predecessors upholding similar disallowances in earlier assessment years. He ought to have appreciated, inter alia, that the decisions of the Supreme Court in Brooke Bond India Limited (225 ITR 798 and of the Gujarat High Court in Vareli Textiles Limited (284 ITR 238) holding that shar....
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....lled for. It may kindly be deleted. 3. In law and in facts and circumstances of the appellant's case, the Ld. CIT(A) has grossly erred in upholding disallowance of Rs. 3,22,38,166/- on account of depreciation on goodwill arising on demerger of Adani Energy Ltd from appellant on the ground that since as per order of Hon'ble Gujarat High Court dated 09.12.2009, appointed date of demerger is 01.01.2007, depreciation on goodwill ought to have been claimed from appointed date i.e. A.Y. 2007-08 and not from effective date i.e. 2010-11. The Ld. Assessing Officer may be directed to allow full depreciation on goodwill amounting to Rs. 5,57,63,315/- as claimed in return of income. 3.1 In law and in facts and circumstances of the appellant's case, the Ld. CIT(A) has grossly erred in upholding the disallowance of depreciation on goodwill without appreciating the fact that Appellant Company is being assessed at maximum marginal rate and even if it is held that appellant is entitled for depreciation from A.Y. 2007-08 and not A.Y. 2010-11, entire exercise of disallowance of depreciation on goodwill is tax neutral and hence, uncalled for." 50. Ground No.1 concerns disallowance of prelimina....
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.... assessee in the preceding assessment years as per para nos.11-13 of this order. Therefore, we find no infirmity in the order of the CIT(A). In consonance therewith Ground No.1 of the Revenue's appeal is dismissed. 59. Ground No.2 concerns addition of Rs. 1,55,814/- made under s.41(1) of the Act towards cessation of liability. In the absence of onus discharged by the Revenue towards cessation of liability, we find no infirmity in the order of the CIT(A) on this score. Ground No.2 of the Revenue's appeal is thus dismissed. 60. Ground No.3 concerns enhancement of closing stock under s.145A of the Act towards unutilized CENVAT credit and consequent increase in the assessed income to this extent. The issue has been deliberated in length in ITA No.775/Ahd/2014 relevant to AY 2009-10 as per para nos. 4-8 of this order. Thus, we are of the view that CIT(A) has appreciated the facts in perspective and deleted the addition made under s.145A of the Act in the facts and circumstances of the case. Thus, we decline to interfere with the order of the CIT(A). 61. Thus, Ground No.3 of the Revenue's appeal is dismissed. 62. In the result, Revenue's appeal for AY 2012-13 is dismissed. ITA No. 2....
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....ution to ESI. The issue is covered against the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. GSRTC (supra) as discussed in para 47 of this order. 67. In the result, Ground No.2 of the assessee's appeal is dismissed. 68. Ground No.3 being consequential having regard to the decision in the earlier years is rendered infructuous owing to relief granted in the earlier years as claimed. Accordingly, Ground No.3 of the assessee's appeal is dismissed. 69. Ground No.4 concerns disallowance made under s. 14A r.w.r. 8D for Rs. 70,125/-. The assessee has earned exempt income by way of dividend income amounting to Rs. 91,04,212/- on investment to the tune of Rs. 10,00,50,000/-. The AO invoked Section 14A of the Act and computed disallowance as per statutory formula provided in the Rule 8D whereby disallowance of Rs. 16,75,809/- was computed by the AO. After taking into account, the suo motu disallowance of Rs. 1,80,000/- on this count, the AO disallowed the remaining amount of Rs. 14,95,809/- and added to the total income of the assessee. 70. In the first appeal, the CIT(A) deleted the disallowance of Rs. 14,25,684/- made towards proportionate inte....