TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 1270
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....se of all these matters by way of this common order, with primarily reference to the facts of obtaining for the assessment year 2007-08, and wherever it is necessary with reference to other years also. 3. At the outset, it is submitted by Ld. AR and also Ld. DR that though the authorities below passed the orders by placing reliance on the orders relating to the assessment years 2009-10 and 2010-11, facts are very similar for the subsequent years also. They have submitted that in the appeal preferred in respect of the assessment years 2009- 10 on 2010-11, a co-ordinate Bench of this Tribunal in ITA No. 5180 and 5718/Del/2013 in respect of assessment year 2009-10 and ITA No. 6181 and 6648/Del/2015 in respect of the assessment year 2010-11, quashing the assessment and preliminary ground of jurisdictional aspect and while holding that the directions issued by the ACIT for special audit under section 142 (2A) of the Income tax Act, 1961 (in short "the Act") was illegal and thus the assessments were made was barred by limitation. They, therefore, submitted that a co-ordinate Bench of this Tribunal decided the appeal on similar facts for the assessment year 2011-12 by order dated 12/02/2....
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....es held by the wholly owned subsidiary company. Learned Assessing Officer relied upon the assessment orders relating to assessment years 2009-10 and 2010-11 to reach a conclusion that the transactions of sale of shares were in fact in accordance with the ordinary lines of business as defined in MOU and Articles of Association of the company. Learned Assessing Officer further found that the transactions were found to be carried out in a manner which indicates systematic and organised activity with profit motive and, therefore, the transaction of sale of shares of a wholly owned subsidiary companies is infected business profit and not capital gain as the intention of the company was not to earning dividend but again profit by sale of shares of those companies. 8. Ld. CIT(A), on these facts, noticing his predecessors order dated 16/08/2013 for the assessment year 2009-10 in assessee's own case, felt that the said order for the assessment year 2009-10 is self explanatory, exhaustive on the basis of modus operandi adopted by the assessee, and to follow the rule of judicial consistency, he found it difficult to take a different view and, therefore, upheld the addition. 9. Ld. AR submit....
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....on 36 (1)(iii) of the Act on the borrowed funds to the extent of funds advanced in respect of share application money, it is involved for the assessment years 2007-08, 2012-13 and 2013-14. Learned Assessing Officer found certain amounts shown as outstanding balance of share application money, which are exceeding 6 were sold, a period considered reasonable for allotment of shares and, therefore, held that interest should have been charged on these loans as the company is operating on borrowed funds. While following the assessment orders for the assessment years 2009-10 and 2010-11, learned Assessing Officer brought the proportionate interest to tax. 13. It is submitted that this issue also is no longer res integra and is covered by the order in ITA No. 6585/Del/2015 for the assessment year 2011-12. On a perusal of the order, we find that the Tribunal dealt with this issue vide paragraph numbers 16-21 of the order, and vide paragraph No. 21 held that,- 21. "Further, if at all such disallowance is being made on notional and hypothetical basis treating share application money as advance or interest free loan, then AO also needs to take into consideration, whether assessee company ha....
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.... assessment proceedings for the years 2009-10 and 2010-11, it was held that such interest (at the rate of average rate of interest paid by the assessee during the year, which is 11% in 2007-08, on interest free loans to related concerns must be added to the income of the assessee. Learned Assessing Officer, therefore, made such an addition and basing on the same analogy of the earlier year findings of 2009-10 and 2010-11, Ld. CIT(A) also upheld the same. 16. It is brought to our notice that this issue is covered by the order dated 12/02/2019 for the assessment year 2011- 12, vide paragraph numbers 27-31 and vide paragraph numbers 30 and 31, a co-ordinate Bench of this Tribunal held as follows:- 27. In ground No. 6 to 7.2 assessee has challenged the disallowance of Rs. 1,32,17,15,364/- as interest imputed by AO on interest free loan/ advance to sister concerns. The facts in brief are that assessee company has given advances during the year to subsidiaries/joint venture/associates for sum of Rs. 233.01 crores. The outstanding balance as on 31.3.2001 aggregated to Rs. 986,67,87,694/-, the details of outstanding balances have been incorporated at page 11 of the assessment order. AO ....
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....nexus proved by the AO that only borrowed funds were advanced, then presumption can be drawn that such advances have been given out of interest free funds. This view is now well supported by various judgments, like; CIT vs. Reliance Utilities Ltd. reported in 313 ITR 340 (Bom); and CIT vs. Max India Ltd., reported in 398 ITR 209 (P&H). Accordingly, such a disallowance is deleted on this ground also." 17. Revenue does not dispute the applicability of these findings for the years under consideration also and in view of the above finding of the Tribunal, we hold that in the absence of any nexus proved by the learned Assessing Officer that only borrowed funds were advanced, a presumption has to be drawn that such advances were provided out of interest free funds, in view of the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Max India Ltd (supra). Hence, ground No. 3 of the appeals of the assessee for the assessment year 2007-08 and 2012-13 and ground No. 2 for the appeal for the assessment year 2013-14 are answered in favour of the assessee and the addition stands deleted. 18. Ld. AR reported that grounds No. 4 and 6 in ITA No. 1906/Del/2017 for assessme....
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....ly following the decision of the Hon'ble Delhi High Court in the case of Vedanta (supra) delete the addition made under section 14 A and Rule 8D. 23. Now coming to the appeals of the Revenue for the assessment years 2012-13 and 2013-14, we find that 3 issues are common for both the years and those related to the addition out of deduction under section 24 of the Act, disallowance of prior period expenses and disallowance of expenses under section 14A of the Act read with Rule 8D of the Rules and all these issues are covered by the order dated 12/02/2019 for the assessment year 2011-12 in assessee's own case in ITA No. 6585/Del/2015. In respect of the assessment year 2013-14, an additional issue is raised by the Revenue relating to the addition of Rs. 4,85,65,343/-on account of late payment of PF payable. We shall deal with these aspects hereunder. 24. In respect of the addition out of deduction under section 24 of the Act, the Tribunal dealt with this issue vide paragraph numbers 32-35, and vide paragraph No. 35 thereof it was held that,- 35. "After hearing both the parties and on perusal of the impugned order it is seen that, nowhere it has been denied that the rental income b....