TaxTMI 
TaxTMI 
2018 (12) TMI 1623
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....:- 1. That the Ld. CIT(A) has erred in law and on facts while treating interest income amounting to Rs. 16517422/- as ''Income from other sources" instead of "Income from Business and Profession". 2. That the Ld. CIT(A) has erred in law and on facts while reducing profits of undertaking for calculating deduction u/s 10B. 80IB and 80IC by the following amounts: Name of the unit Anant Spinning Mills Unit 3 VSGM EOU Auro Weaving Unit-2 Auro Wvg Unit-3 Auto Spinning Mills Auto Textiles. Deduction Claimed 10B 10B/80IB 80IB 80IB 80IC 80IC Rent 494567 249016 73301 38982 1032309 1072193 Misc. Receipts 238725 3482 1275 282989 696527 DEPB/Duty Drawback 370206 5820457 68903960 Commission 7141 1426 2771 Interest 93264 3. That the Ld. CIT(A) erred in law and on the facts while confirming the action of Ld.AO. for reducing profits of units eligible for deduction u/s 10B, 801B and 801C by allocating Head office expenses. 4. Tha....
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....om other sources'. 6. We have heard the rival submissions on this issue. We do not find any infirmity in the order of the CIT(A) so far as the treatment of the interest from customers and suppliers as 'business income' and interest from bank and other sources as 'income from other sources' is concerned. However, a contention has been raised by the Ld. Counsel for the assessee that where there is a direct nexus between the interest income earned and the interest expenditure incurred in this respect, the assessee should be allowed netting of the same before computing the same under the head 'income from other sources'. We find merit in the above contention of the assessee and we order accordingly. 7. Ground No.2 : Vide ground No.2, the assessee has agitated the action of the CIT(A) in directing the Assessing officer to reduce the eligible profits of the undertaking for the purpose of deduction u/s 10B, 80IB and 80IC of the Income-tax Act, 1961 (in short 'the Act') in respect of other income received. 8. The Ld. Counsel for the assessee has given details of other income which is mentioned in the ground No. 2 itself. A perusal of the aforesaid details will reveal that ....
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....of the Act on the actual expenditure incurred by the assessee. 14. At the outset, Ld. Counsel for the assessee has submitted that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of the assessee in ITA No.141 of 2012 dated 31.7.2013 and has pointed out that in the year 2000-01, the assessee had earned dividend income of Rs. 2.16 crores whereupon the disallowance of Rs. 1 lac was affirmed by the Hon'ble High Court. The Ld. Counsel for the assessee has further submitted that for the year under consideration the assessee had earned dividend income of Rs. 1.59 crores. 15. The Ld. DR, on the other hand has, however, relied on the findings of the lower authorities. 16. We have considered the rival submissions. The assessment year involved admittedly is 2006-07. The Hon'ble Bombay High Court in the case of 'Godrej & Boyce Manufacturing Co. Ltd.' 234 CTR 1 (Bom.) held that Rule 8D of the Income Tax Rules is applicable from the assessment year 2008-09 onwards and that for the year prior to assessment year 2008-09, the disallowance u/s 14A is to be made on some reasonable basis. Considering the o....
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....further relied upon the decision of the Hon'ble Supreme Court in the case of 'Taparia Tools Ltd Vs. JCIT' (2015) 7 taxman 361 wherein, the Hon'ble Supreme Court has held that such type of premium / interest paid to debenture holders was to be allowed as Revenue expenditure in the year of payment itself. Admittedly, in the year under consideration, the assessee has booked the aforesaid expenses payable which was paid in the assessment year 2011-12. In view of this, the said expenditure is to be allowed in the year of payment. Subject to the above observation, this ground of the assessee's appeal for the year under consideration is hereby dismissed. 22. Apart from the above, the assessee has raised an additional ground of appeal which reads as under:- "That the authorities below have erred in treating the interest reimbursement of Rs. 24,64,44,644/- under Technology Upgradation Fund Scheme (TUFS) as Revenue receipt instead of capital receipt." 23. The assessee has claimed that interest reimbursement of Rs. 24,64,44,644/- received under 'Technology Upgradation Fund Scheme' (TUFS) should be treated as capital receipt instead of Revenue receipt as treated by the l....
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....rsonal, administrative and financial expenses for earning of dividend income. 6 That the Id. CIT(A) has erred in law and facts in treating the income from Sale of Shares amounting to Rs. 2,35,69,012/- as income from Capital gain instead of income from speculative Business as considered by the Assessing Officer in view of explanation to section 73. 7 That the order of the Id. CIT(A) be set aside and that of the A.O. be restored. 8 That the appellate craves leave to add or amend any ground of appeal before it is finally disposed off. 26.Ground No.1 :The Revenue vide ground No.1 of the appeal has agitated the action of CIT(A) in deleting the interest received on account of delayed payment from customer's and suppliers as business income instead of income from other sources. In view of our findings given above awhile deciding ground No.1 of the assessee's appeal in ITA No. 1429/Chd/2010, we do not find any infirmity in the order of the CIT(A) on this issue. Ground No.1 of the Revenue's appeal is accordingly dismissed 27. Ground No.2 : Ground No.2 raised by the Revenue is in three parts. The Revenue in the Ist part has agitated the action of the CIT(A....
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....ive units for reducing the same out of eligible profits of assessee for claim of exemption / deduction u/s 80IB, 80IC and u/s 10B of the Act. This issue has already been discussed while adjudicating ground No.4 of the assessee's appeal wherein we have upheld the order of the CIT(A) on this issue. In view of this, ground No.3 of the Revenue's appeals is hereby dismissed. 31.Ground No.4 : Vide ground No.4, the Revenue has agitated the action of the CIT(A) in allowing deduction u/s 80IB in respect of unit which has already claimed exemption u/s 10B of the Act. The Ld. Counsel for the assessee has submitted that the assessee has claimed deduction u/s 80IB in respect of unit Vardhman Spinning & General Mills on the balance amount, after excluding the amount upon which the exemption u/s 10B of the Act has been claimed. In view of this, it is not a case of double deduction, hence we do not find any infirmity in the order of CIT(A) on this issue also. The order of the CIT(A)on this issue is accordingly upheld. 32. Ground No.5: The Revenue vide this ground has agitated the action of the CIT(A) in reducing / deleting the addition made by the Assessing officer u/s 14A of the Ac....
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....93032 201342 13696283 8894379 11284064 Rent 471200 235503 80710 43397 12359452 1 593793 636884 Misc. Receipts 1406002 978 51888 1 586025 53682 Commission 603 1996 1083 94395 Total 4429243 2993477 516128 342572 26243113 11845562 14125791 3. That the Ld. CIT(A) erred in law and on the facts while confirming the action of Ld. AO for reducing profits of units eligible for deduction u/s 10B, 80IB and 801C by allocating Head office expenses as under: Anant-III Vsgm(Eou) Auro Wev.II AuroWev.III Auro Spg. Auro Tex. Arisht 6449934 6077375 3632454 1746372 10711082 36161544 18348549 4. That without prejudice to ground No. 3, the Ld. CIT(A) erred in law and on facts while allocating gross head office expenses instead of expenses net of income. 5. That the Ld. CIT(A) erred in law and on the facts while confirming the action of Ld.AO while taxing the capital receipt amounting to Rs. 9,87,63,065/- on account of Sales....
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....erred in Law and facts in directing the A.O. to consider interest income received by the assessee on delayed payments from customers as 'Business Income, instead of 'Income from Other Sources' as considered by the A.O. 2 (i) That the Id. CIT(A) has erred in law and facts in directing the A.O. to treat the interest received from the customers and suppliers to be the income derived from industrial undertaking and eligible for exemption u/s 10B and deduction u/s 801B and 80IC. (ii) That the Id. CIT(A) has erred in law and facts in directing the A.O. to allow deduction u/s 8OIB and 80IC and exemption 10B on profits after excluding loss debited in the accounts in respect of which the insurance claims were received. (iii) That the Id. CIT(A) has erred in law and facts in directing the A.O. not to reduce foreign exchange fluctuation gain from eligible profits of units eligible for deduction u/s 801B and 80IC and exemption u/s 10B. 3. The Id. CIT(A) has erred in law and facts in directing the A.O. to allocate the eligible head office income to the respective unit for calculating deduction u/s SOIB and sec 80IC and exemption u/s 10B. 4. T....