TaxTMI 
TaxTMI 
2016 (9) TMI 1521
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.... assessment year 1999-2000 and these two appeals of the Revenue in ITA No.4824/Mum/2004 for assessment year 1998-99 and ITA No.4825/Mum/2004 for assessment year 1999-2000 is as regards to the claim of deduction of write off of investments. For this issue, in both the appeals of the assessee and the Revenue, the facts and circumstances are exactly identical as admitted by both the sides. Hence, we take up the ground No.2 of assessee's appeal for assessment year 1998-99. The relevant ground No.2 reads as under:- "[2] On the facts and circumstances of the case and in law, the CIT (A) erred in not assessing Rs. 63,44,04,198/- as long term capital in respect of write-off of shares and debentures made in certain companies". Similarly, the ground No. 4 from Revenue's appeal reads as under:- "4. On the facts and circumstances of the case and in law, the learned CIT (A) erred in holding that the write off of investment on conversion of loan arrears amounting to Rs. 12,09,03,673/- can be allowed as business loss." 3. At the outset, the learned Counsel for the assessee stated that an identical issue has been decided by the Tribunal in favour of the....
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....ff, a sum of Rs. 10,47,95,551, is on account of write-off of the loan which has been alternatively claimed to be business loss. It is noted that the Tribunal in assessee's own case for A. Y. 1982-83allowed it as business loss. No distinction has been brought in facts or legal position by Ld. CIT-DR. Therefore, respectfully following the orders of earlier years, the A O is directed to follow the orders of the earlier years and allow a sum of Rs. 10,47,95,551 as business loss and the balance amount on account of write-off of investment as capital loss should be disallowed, as held above also. Thus, assessee gets part relief. This ground is partly allowed. Respectfully following the decision of the Coordinate Bench of the Tribunal in assessee's own case as above, we direct the AO to partly allow relief as above. This common issue of assessee's appeal is dismissed and that of the Revenue is also dismissed. 6. The next common issue in these two appeals of the assessee and two of Revenue is as regards to the order of the CIT (A) partly confirming the interest expenses of Rs. 150,39,30,857/- incurred for earning interest free income from bonds instead of....
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....orrectly, the amount of net income available for exemption u/s 10(23G). For the sake of ready reference, the said work sheet submitted by the ld. Counsel is reproduced below: (Amount in Crores) Rs. Ratio of borrowed funds to total funds: 550.53 Share capital 3,900.21 Reserves and surplus I 4,450,74 _____________ II 29,393.86 Interest bearing funds: (I + II) 3,844.59 Ratio of borrowed funds to total funds (29,393.86/33844.59*100) 86.85% 2. Ratio of allocable expenses Total interest expenses as per Revenue Account 4,439.67 Ratio for allocation (25,02,93/4439.67*100) 56.38% 3. Calculation of income exempt u/s 10(23G) ....
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....the exempt income can be deducted for computing net income available for exemption u/s 10(23G). Under these circumstances, we send this issue back to the file of the Assessing Officer, who shall decide this issue afresh after giving adequate opportunity of hearing to the assessee to submit requisite details and documents in support of claim made by the assessee. The assessee shall also extend requisite cooperation to the Assessing Officer. The Assessing Officer shall consider aforesaid circular of the Board as well as judgments relied upon by both the parties before us. The assessee is also free to place on record any other judgment in its support as may be available at the time of passing of fresh assessment order. The assessee is free to raise all legal and factual issues in this regard. The Assessing Officer is also at liberty to taken into account latest position of law as may be available at the time of deciding this issue afresh. The Assessing Officer shall consider all the submissions and evidences as may be placed by the assessee on objective basis and shall decide all the issues as may be raised by the assessee before him. Thus, this issue is sent back to the Assessing Off....
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....ting to Rs. 451,47,71,600/-. For this, the assessee has raised the following ground No.5:- "[5] On the facts and circumstances of the case and in law, the CIT (A) erred in upholding the disallowance of depreciation on all those assets which were purchased and leased during the previous year after excluding the principle component of lease rentals". Both the parties admitted that the facts and circumstances are exactly identical in both the years and hence, the facts can be taken from assessment year 1997-98 and the issue can be decided. 10. We find that the Tribunal in assessment year 1997-98 in ITA No.5424/Mum/2001 vide order dated 13-07-2016 had restored the matter back to the file of the AO to decide the same in favour of the assessee following the order of the assessment year 1995-96 by observing in Para 9.2 as under:- "9.2 With the assistance of the parties, it is noted by us that in A.Ys. 1995-96 and 1996-97 this issue has already been decided by the Tribunal. In A.Y. 1995-96, the Tribunal decided this issue vide its order dated 15-09-2007 reported in 115 ITD 25 (Mum). It is further noticed by us that in A.Y.1996-97 in ITA No....
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....e are deciding the issue. We find that the assessee claimed exemption u/s 10(33) of the Act but the AO disallowed interest expenses and managerial & administrative expenses at Rs. 180.51 lacs and Rs. 70,43,373/- respectively and disallowed exemption u/s 10(33) of the Act as against the claim of the assessee of Rs. 54,24,28,451/-. The CIT (A) partly confirmed the disallowance of interest expenses at Rs. 32,72,22,218/- and managerial and administrative expenses at 1%. The assessee before us now claimed that no interest expenses to be allocated as the investment is made out of assessee's own funds. For this, the learned Counsel for the assessee relied upon the decision of the Hon'ble Bombay High Court in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and also in the case of CIT Vs. Reliance Utilities & Power Ltd. 313 ITR 314 (Bom.). It was contended by the learned Counsel for the assessee that the entire interest expenses are to be allowed as expenses and no interest expenses to be allocated as the investment is made out of assessee's own funds. She referred to the Tribunal's decision in assessee's own case in assessment year 1997-98 in ITA No.5424/Mum/2001 wherein the issue is....
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....culation of special reserves as under: a. That due to the nature of business carried on by the Appellant is a difficult to identify expenses attributable to long term finance and hence the working has been made by segregating items of finance and applying the ratio to derive profits from long term finance; b. That expenses that are directly attributable to non-finance are allocated while working out profits from long term finance. [10] The CIT (A) erred on the facts and circumstances of the case and in law, in not accepting the appellant's without prejudice working by (a) treating commission and fees as fund based and (b) reducing bad debts pertaining to noon-finance income". The revenue has raised following ground No.7:- "7. On the facts and circumstances of the case and in law, the learned CIT (A) erred in holding that for the computation u/s. 36(1) (viii) of the I. T. Act, the Assessing Officer will also take into account the interest cost attributable to non-finance income, in addition to administrative overheads estimated by him at 10%". 16. At the outset, the learned Co....
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....hile ITC Classic Finance Limited." 19. Brief facts leading to the above issue are that ITC Classic Finance Ltd. got amalgamated with the assessee Company. According to the assessee, ITC was having prior period expenses of earlier years at Rs. 5,45,30,000/-. The assessee claimed these as debit in the profit & loss account for achieving uniformity with the accounting policies of the assessee Company and consequently, recasting of accounts resulted in debit of Rs. 7,55,30,000/- to the profit & loss account including this amount of Rs. 5,45,30,000/-. The assessee explained that these expenses relates to earlier years but cannot be classified as prior period expenses because they arose in the current year on account of extra ordinary event of merger of ITC into assessee and accounting policies were recasted to bring it in line with those followed by the assessee. The A O was not convinced for the reason that both the parties are following mercantile system of accounting and hence, he disallowed. The CIT (A) confirmed the action of the AO by observing in Para 13.3 as under:- "13.3 I have carefully considered the submissions made by the Appellant. The A O h....
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.... common issue in these two appeals of the Revenue is as regards to the order of the CIT (A) deleting the disallowance of earlier years expenditure. For assessment year 1998-99, the deletion was to the extent of Rs. 15,38,098/- and for assessment year 1999-2000 Rs. 4,75,311/-. At the outset, the learned Counsel for the assessee as well as learned CIT DR conceded that the Tribunal in assessee's own case for assessment year 1996-97 and 1997-98 in ITA No.3782 & 5339/Mum/2001 order dated 28-10-2005 and 24-05-2006 has decided this issue in favour of the assessee, wherein exactly on identical facts vide Para 9 as under:- "9. Having heard both the parties we find that this issues stands covered in favour of the assessee by the aforesaid decisions of t he Tribunal for assessment year 1991-92, 1994-95 and 1996-97 passed in assessee's own case. The relevant para No.10 of the Tribunal order dt. 29.3.2004 reads as under: "We find that it is an undisputed position that it is not a case of double deduction in as much as the deduction was not also allowed in the year to which according to the revenue, these expenses pertain. We also find that the revenue has not disputed a....
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....e and restore the matter to the file of the Assessing Officer with the direction to decide the issue afresh in the light of the Tribunal's directions for the assessment year 1996-97 This ground of the revenue is allowed for statistical purposes". Respectfully following Tribunal's decision in earlier year, we exactly on same directions, restore the matter back to the file of the A O for fresh adjudication. This issue of Revenue's appeal is set aside. 26. The next common issue in Revenue's appeal in ITA No.4824/Mum/2004 for assessment year 1998-99 and in ITA No.4825/Mum/2004 for assessment year 1999-2000 is against the order of the CIT (A) deleting the disallowance of claim of the assessee of write back of non-cash. 27. At the outset, the learned Counsel for the assessee as well as the learned CIT DR conceded that the Tribunal in assessee's own case for assessment year 1996-97 and 1997-98 in ITA No.4109 & 5424/Mum/2001 order dated 09-09-2015 and 31-07-2016, wherein exactly on identical facts following assessee's own case for assessment year 1987-88 in ITA No.8958/Bom/90 decided the issue and the matter back to the file of the A O. Th....