TaxTMI 
TaxTMI 
2016 (1) TMI 1398
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....n law and on facts in deleting the addition of Rs. 50,13,577/- made u/s 145A of the Act on account of unutilized CENVAT Credit." 2. The assessee filed its original return of income on 30.09.2012 declaring total income of Rs. 77,10,590/- which was processed u/s 143(1) of the Income Tax Act, 1961. Subsequently, the case was selected for scrutiny; notice u/s 143(2) of the Act was issued on 08.08.2013 followed by another notice u/s 143(2) r.w.s. 129 due to change of incumbent and notice u/s 142(1) of the Act along with questionnaire on 01.08.2014. The same procedure was repeated by issuance of notice u/s 143(2) r.w.s. 129 & 142(1) of the Act along with questionnaire dated 17.11.2014. 3. It appears from the records that assessee has earned dividend income to the tune of Rs. 3,34,502/- and also made investment in Mutual Funds and Shares of various Companies. Investment to the tune of Rs. 6,77,22,655/- on 31.03.2012 was made by the assessee upon which a notice u/s 142(1) of the Act dated 17.11.2014 was issued directing him to furnish the list of investments that yield tax free income. In reply to that notice, the assessee submitted that it had not incurred any expenditure for the pu....
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....ow of funds. Reliance was placed by the Learned DR on the judgment passed by the Hon'ble High Court of Calcutta in the case of Dhanuka & Sons Vs. CIT, 339 ITR 319 (2011) where it was held that it was for the assessee to show by production of materials on records that, the shares were acquired from funds available in its hand at relevant point of time without taking benefit of any loans. It is a fact that the assessee as suo moto disallowed Rs. 29,20,159/- in the computation of income and therefore the expenses of Rs. 22,62,174/- as incurred for exempt income has been rightly disallowed and added to the total income of the assessee as submitted by the Learned DR before us. The Learned Representative appearing for the assessee submitted before us that while making addition the Learned Assessing Officer has not recorded any such satisfaction. He further added that the process of disallowances u/s 14A by applying the Provision of Rule 8D is factually incorrect and consequential disallowance made by the Ld Assessing Officer is to be deleted. Further that the Learned AR submitted before us that the Assessing Officer has made disallowance u/s 14A simply applied Rule 8D. However, by doing ....
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....with the assessment year 2009-2010, such formula was correctly applied by the Revenue. We however, notice that sub-section(l) of section 14A provides that for the purpose of computing total income under chapter IV of the Act, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. In the present case, the tribunal has recorded the finding of fact that the assessee did not make any claim for exemption of any income from payment of tax. It was on this basis that the tribunal held that disallowance under section 14A of the Act could not be made." 7. Admittedly the assessee has not claimed any exempt income in the instant case. Therefore the ratio laid down in the judgment relied upon by the Learned CIT(A) passed by the Hon'ble Jurisdictional High Court in the case of Corrtech Energy Ltd. where the assessee has not made any claim for exemption of any income payment of tax, no disallowance could be made u/s 14A of the Act has rightly been applied by the Learned CIT(A). In the absence of any infirmity in the order passed by the Learned CIT(A), the same is confirmed by us. In the ....
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....TR 88) and DCIT vs. M/s. Axel Ploymers Ltd. (ITA No.3488/Ahd/2010). He ultimately relied upon the order passed by the Learned CIT(A) on the finding that the said vehicle was used for the business purpose and the same was duly reflected in the books of accounts of the assessee company. 11. We have heard the respective parties, perused the relevant materials available on record. We find from the order passed by the Learned AO that the fact of funds provided by the appellant company for purchase of the assets was accepted by him and the same was shown in the annual accounts of the assessee company was also recorded in his order. Since, the vehicle was not registered in the name of the assessee but in the name of the Directors on the sole motive of evading tax for such registration with the State Government, the depreciation has mainly been disallowed by the Learned Assessing Officer. This is a settled principle of law that when the evidence have established that vehicles in question where in use for the purpose of business of the assessee company and when the same duly reflected in the Books of accounts of the assessee company the claim of depreciation cannot be disallowed. This vi....
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....the assessee was not found tenable by the Learned AO. He then made addition of the entire amount of Rs. 50,13,577/- being the net unutilized CENVAT Credit on the ground that had the inclusive method of accounting been followed the assessee would have earned higher profit then profit shown as per exclusive method of accounting. In appeal, the Learned CIT(A) deleted the said addition. Hence, the appeal. 14. At the time of hearing of the instant appeal the Learned Representative of the assessee submitted before us that the purpose of CENVAT Credit is to avoid cascading effect of incidence of indirect taxes in the hands of various persons engaged in the chain of supply of raw material for processing the raw materials and manufacturing the finished goods in order to distribute the finished goods to the ends user. The Learned Assessing officer erred in example referred in the order for adjusting the excise duty to give effect Section 145A, if the excise duty paid at the time of purchase of raw material is included in the closing stock, the value of stock can never exceed the actual purchase price including the excise duty. In the said example the value of raw material as per the exclu....
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..... Narmada Chematur Petrochemicals Ltd. 327ITR 369 (Guj.), wherein following was held: "Held, dismissing the appeal, that Tribunal was justified in excluding the excise duty at the time of valuation of the closing stock of finished goods at the end of the accounting period because: (a) No deduct ion for the liability had been claimed by the assessee. The excise duty payable on the finished goods lying in the closing stock at the end of the relevant, accounting period had been paid in the subsequent year before the due date of filing of the return of income and that was how the amount was available considering the fact that the assessment had been framed and the show-cause notice was issued much after the close of the accounting year; A.Y. 2005-06 (b) The Assessing Office had not had recourse to sub-section (3) of section 145 of the Act. The assessee was following the mercantile system of accounting but it was not the case of the assessing Officer that the Assessing Officer was not in a position to deduce true profits of the year under consideration. Such duty of Central excise if added to enhance the value of closing stock would result in enhanced....