AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 537
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.... of Income Tax (Appeals)-1, Vadodara ('CIT(A)' in short), dated 12.06.2017 emanating from the assessment order dated 30.03.2016 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning assessment year 2013-14. 2. The grievances raised being common, both the cases were heard together and disposed of by the common order. 3. We shall first take up assessee's appeal in ITA No. 1989/Ahd/2017 concerning AY 2013-14. ITA No. 1989/Ahd/2017-AY-2013-14 (Assessee's appeal) 4. The grounds of appeal raised by the assessee read as under:- "1. The order passed by the Learned Commissioner of Income-tax (Appeals) [hereinafter referred to as 'the Ld. CIT(A)'] is bad in law and on facts.....
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....e without appreciating that the CBDT Circulars are not binding on the Appellant. 3. Re: Disallowance u/s. 14A read with tule 8D of Rs. 7.24.182/- 3.1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of the Assessing Officer in disallowing administrative expenses u/s 14A by invoking Rule 8D without first recording satisfaction with regard to correctness of claim of the Appellant and as to how the disallowance carried out by the Appellant amounting to Rs. 50,000/- was not reasonable. 3.2 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have appreciated mat once it is undisputed that the Appellant had sufficient interest fr....
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....the assessee has no nexus with the sales made by it to the C&F agents. The AO accordingly is of the view that such indirect discounts to the customers of its agents are not allowable expenditure. 11.10 We do not see any iota of merit in such plea. The discounts given to the customers/ultimate consumer has direct bearing on the potential turnover of the company. It is well settled that the test of the commercial expediency cannot be reduced to the shape of a ritualistic formula nor can it be put in a water tight compartment. It is trite that the Revenue authorities have to place themselves in the position of a business and find out whether expenses incurred can be said to have been laid out for the purposes of businessman. The comme....
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....rdinary business expenditure. Thus, Ground No.2 of the Revenue's appeal is dismissed. As a corollary, Ground No.1 of the assessee's appeal in ITA No. 2511/Ahd/2015 stands allowed." 6.2. In the light of the view taken in the earlier assessment years, the disallowance of discount offered to Doctors is uncalled for. 7. Ground No.2 of the assessee's appeal is allowed. 8. Ground No.3 of the assessee's appeal concerns disallowance of administrative expenditure amounting to Rs. 7,24,182/- calculated in terms of Rule 8D(2)(iii) r.w.s. 14A of the Act. 8.1 When the matter was called for hearing, the learned Senior Counsel for the assessee sought limited direction for computation of disallowance of administrative expenses only with referen....
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.....3 In the identical facts, the issue in the instant assessment year is also remitted back to the file of the AO for re-computation of disallowance under Rule 8D(2)(iii) of the IT Rules with reference to these investments which have actually yielded exempt income instead of gross investments. 9. Ground No.3 of the assessee's appeal is partly allowed. 10. In the result, appeal filed by assessee is partly allowed. ITA No. 2026/Ahd/2017-AY-2013-14 (Revenue's appeal) 11. The grounds of appeal raised by the assessee read as under:- "1. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in allowing the interest of Rs. 14,98,46,433/- by treating it as business expenditure ignoring the fact on record that....
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.... concerning AYs 1997-98 in CIT vs. Aditya Medisales Ltd. Tax Appeal No. 559 of 2009 judgment dated 04.05.2010 towards deletion of disallowance made on account of excess interest payment under s.40A(2)(a) of the Act. Thus, the issue stands concluded in favour of the assessee by the jurisdictional High Court. The issue having been already examined in the earlier years, we do not see any reason to look afresh. Therefore, we decline to interfere with the order of the CIT(A) in this regard. Consequently, Ground No.1 of the Revenue's appeal is dismissed." 12.2 In parity with the view already taken in the identical circumstances, we find no error in decision rendered by the CIT(A). We therefore decline to interfere. 13. Ground No....