AI Drafter 
TaxTMI 
TaxTMI 
2015 (10) TMI 2739
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.... Industries Ltd 25,50,000 (b) Mayesh Chemicals P. Ltd. 33,25,000 (c) Mafatlal S .A. Intex Ltd. 2,04,20,095 (d) Mafatlal V.K. Intex Ltd. 38,00,000 (e) Repal Apparel P. Ltd. 75,76,557 (f) Silvia Apparel Ltd. 80,00,000 (g) MEIL by Mafatlal Fine Spg. 2,77,50,000 (h) MEIL 3,91,15,000 Total 11,25,36,652 2. Without prejudice, the learned Commissioner (Appeals) ought to have appreciated that interest on advances to MEIL was to accrue only after all the dues of the financial institutions had been paid and that the question of comparing the interest paid with the interest receivable from MEIL did not arise in the present year. 3. The learned Commissioner (Appeals) ought to have appreciated that the advances to Ibiza Industries Ltd., Mayesh Chemicals P. Ltd., Silvia Apparel Ltd., Mafatlal S.A. Intex Ltd., Mafatlal V.K. Intex Ltd. and Repal Apparel P. Ltd. were for the purpose of the business of the appellant. 4. The learned Commissioner (Appeals) ought to have appreciated that the Assessing Officer was not justified in charging to tax notional interest of Rs. 1,63,12,256 whic....
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....rned Commissioner (Appeals) ought to have appreciated the position taken by the Assessing Officer in the assessment for the assessment year 1998-99. Capital Expenditure incurred on scientific research 11. The learned Commissioner (Appeals) erred in not specifically directing the Assessing Officer to allow the capital expenditure on scientific research of Rs. 74,51,457. Interest on securities 13. The learned Commissioner (Appeals) erred in confirming the action of the Assessing Officer in bringing to tax a sum of Rs. 15,840 as interest on Government Securities. Import duty benefit 14. The learned Commissioner (Appeals) erred in not directing the Assessing Officer to exclude from the income the estimated import duty benefit of Rs. 422.93 lacs. Pooja Expenses 15. The learned Commissioner (Appeals) erred in confirming disallowance in respect of pooja expenses of Rs. 2,30,445. 16. The learned Commissioner (Appeals) erred in not considering fact that in the Income-tax Appellate Tribunal order dated June 9, 1998 in the case of erstwhile Mafatlal Fine and Spg. & Mfg. Co. Ltd. for the assessment year 1987-88, s....
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....xus and therefore the expenditure of Rs. 3,50,98,649 cannot be set off against the dividend income. Expenses in respect of House Property. 27. The learned Commissioner (Appeals) erred in confirming the action of the Assessing Officer in restricting the appellant's claim for deduction for repairs and maintenance at 25 per cent of Rs. 34,76,882 as against 25 per cent of Rs. 67,86,676 claimed by the appellant in the return of income. Carry forward of losses 28. The learned Commissioner (Appeals) erred in not specifically directing the Assessing Officer to quantify and carry forward unabsorbed business losses and depreciation of the assessment year 1998-99 and the earlier assessment years. 3. At the outset the ld. AR submitted that the assessee do not want to press following grounds : i) Ground No.10 regarding disallowance of Rs. 25,00,000/- on account of valuation of closing stock of finished goods; ii) Ground No.12 regarding disallowance of stamp duty payable on amalgamation in the year in which the same has been paid; iii) Grounds No. 11 and 12 , regarding disallowance of exchange gain of Rs. 985.52 lakhs; ....
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....decide the issue denovo. Ground No.1 is allowed for statistical purposes. 11. The second issue pertain to the disallowance of balance 4.5th deferred revenue expenditure in the next four years in accordance with the provisions of section 35DDA; deferred revenue expenditure. The factual matrix of this are that the assessee has claimed deduction deferred revenue expenses of Rs. 2,22,21,08,642/- on account of voluntary retirement scheme, retrenchment compensation and ex-gratia payment. The AO called for the explanation from the assessee and on being scrutiny the same, the AO did not accept the explanation rendered by the assessee and disallowed the above mentioned expenses and added back to the total income of the assessee. The ld.CIT(A) allowed the 1/5th of the above expenditure for the year under consideration and rest 4.5th to the succeeding four years. Aggrieved by this, the assessee is in appeal before us. 12. At the time of hearing, the ld. AR submitted that an identical issue had come up before this Tribunal in the assessee's own case for the assessment year 1998-99 and the Tribunal following the decision of jurisdictional High Court in Bhore Industries Ltd (264 ITR 180) (....
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....nghji Spinning and Weaving Mills Limited V/s Inspecting Assistant Commissioner reported in 41 ITD 142)(Mum) has decided this issue in favour of the assessee. The facts being the same and consistent with the view so take by this Tribunal in earlier year, we allow the claim of the assessee for this year too. Ground No.14 taken by the assessee allowed. 20. The AO made the addition of Rs. 2,30,445/- by rejecting the claim of the assessee being pooja expenses on the ground that the revenue was disallowing the same on the ground that CIT(A) confirmed the same for the AY 1987-88 in the case of another group company namely, The Mafatlal Fine Spg.and Mfg Co.Ltd. The ld. CIT(A) also upheld the action of the AO by upholding his observations. 21. Before us, the contentions of the ld.AR are that the similar issued has been decided in favour of the assessee by this Tribunal in the assessment year 2003-04, 1998-98 and 1997-98 and therefore prayed that similar view be taken for this year also. 22. On the contrary, the ld.DR could not bring any material contrary to the submissions of the ld.AR so we can take different view than the view so taken by this Tribunal in earlier years. 23. Af....
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....ecision of Hon'ble Supreme Court in M/s Artex Manufacturing Company reported in 227 ITR 260 (SC) upheld the action of the AO. Therefore, the assessee is in appeal before us. 29. Before us, the ld.AR submitted that an Identical issue had come up before this Tribunal in assessee's own case for the assessment year 1997-98 and the Tribunal has set aside this issue to the file of the AO for fresh adjudication in the light of the Tribunal order. In support of this contention, he placed reliance on the following decisions : a) Premier Automobiles Ltd V/s ITO (264 ITR 193)(Bom); b) M/s Artex Manufacturing Company reported in 227 ITR 260 (SC) ; c) CIT V/s Electric Control Gear Mfg.Co. 227 ITR 278 (SC); and d) CIT V/s Asea Brown Boveri Ltd 11 TTJ 502 (Mum). and submitted that the issue may be restored to the file of AO for fresh adjudication in the light of the above precedents. 30. The ld. DR did not object to the plea putforth by the ld.AR. 31. After hearing both the parties and perusal of the record on this issue, we find that the assessee has claimed depreciation on total scrap sales which comprises different type of the assets. The a....
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....ed on borrowed funds should not be disallowed. In reply, the assessee submitted that under the provisions of section 36(1)(iii) of the Act, the interest paid on borrowed funds utilized for business purposes is allowable expenditure. During the year under consideration, the assessee incurred interest expenses of Rs. 13,165.63 lacs. The AO by invoking the provisions of section 14A, the AO disallowed Rs. 3,50,98,649/-. Aggrieved by the decision of the AO, the assessee appealed before the ld.CIT(A). 39. Before, the first appellate authority, the assessee contended that the investment made from its own funds and assessee could not establish the nexus with own funds or borrowed funds completely. Therefore, without discussing the issue thoroughly, the ld. CIT(A) reduced the disallowance to 50%. Being aggrieved by this decision of ld. CIT(A), the assessee is in appeal before us. 40. Before us the ld. AR contended that the assessee made investment and earned dividend income. The said investment was made by taking funds from outside. The assessee has also paid interest on borrowed funds. Therefore, the assessee has incurred expenditure for earning dividend income. Hence the claim of th....
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....vide a reasonable opportunity to the assessee of producing its accounts and relevant or germane material having a bearing on the facts and circumstances of the case." In the present case, the assessee neither before the AO nor the ld.CIT(A) or the Tribunal produced any documents how the assessee is eligible for deduction of the expenditures incurred for earning dividend income. We find that the ld. CIT(A) restricted the claim to 50%. Therefore, we are of the considered opinion, that this facts requires details investigation and verification at the level of AO to determine the exact expenditure incurred by the Assessee. The AO is directed to follow the decision rendered by the Hon'ble High Court in Godrej & Boyce Mfg. Co. Ltd (supra). Resultantly, Grounds No. 25 and 26 are allowed for statistical purposes. 43. The last issue is in respect of disallowance of excess expenses incurred towards repairs and maintenance of house property amounting to Rs. 8,69,220/-. 44. The assessee incurred expenses toward repairs and maintenance amounting to Rs. 67,86,676/-, and the assessee on own disallowed 25% thereof. The AO restricted the claim 25% of Rs. 34,76,882/-. The CIT(A) confirmed t....