AI Drafter 
TaxTMI 
TaxTMI 
2019 (10) TMI 124
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.... [in short "CIT(Appeals)"], in so far as sustaining the additions and disallowance made by the Learned Assessing Officer, is based on irrelevant considerations, against the principles of natural justice, contrary to facts, arbitrary, erroneous and bad in law. 2. Disallowance of Interest on disputed Govt, duty (Electricity Duty and water charges -Rs. 202,61,47,249/-, a. That on the facts and in the circumstances the case, sustaining the addition/disallowance of Rs. 202,61,47,249/- under 'Interest on Disputed Govt, duty (Electricity Duty and water charges)' by the learned CIT (Appeals), ignoring the written submissions and the orders of the jurisdictional ITAT Bench, is against the principles of natural justice, arbitrary, erroneous, bad in law and legally untenable. b. That the learned CIT (Appeals) ignoring arid not following the order of the Jurisdictional ITAT (Hon'ble ITAT Cuttack Bench, Cuttack) for the Asst. Year 2005-06 in appellant's own case), wherein in under similar circumstances, the issue of allowbility of 'Interest on Disputed Govt, duty (Electricity Duty and water charges)' having been decided in favour of the assesse....
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....ing of the addition of Rs. 6,82,43,072/- u/s.l4A of the Act is unjustified, arbitrary, contrary to facts, erroneous and bad in law. d. The appellant's computation of the aforesaid Rs. 82,378/- u/s. 14A of the Act is based on its books of accounts and is worked out in a reasonable and fair manner, the learned lower authorities have mis appreciated/misconstrued the same and the disallowance U/S.14A of the Act is incorrect, arbitrary, erroneous and bad in law. e. That the learned CIT(Appeals) holding that the aforesaid Rs. 82,378/- has no basis and purely adhoc' is incorrect, contrary to facts, arbitrary and erroneous and bad, both in the eye of law and on facts, 5. Treatment of Short Term Capital Gains of Rs. 67,67,666/- and not accepting Loss under Long term Capital Gains of Rs. 13,75,90,268/- and treating the same as 'Business income' and the addition under "Business Income" of Rs. 114,80,58,652/- a. That on the facts and in the circumstances the case, the dismissal of the ground for Treatment of Short Term Capital Gains of Rs. 67,67,666/- and not accepting Loss under Long term Capital Gains of Rs. 13,75,90,268/- and treating the ....
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....action of the learned Assessing Officer in changing the 'Head of Income' as per the return of income filed by the assessee. 6. Addl. Depreciation u/s.32(i)(iia) of the Act- Rs. 85,65,464/- That on the facts and the circumstances of the case, the learned CIT (Appeals) ought to / have allowed the claim of Additional depreciation Rs. 85,65,464/- u/s.32(l)(iia) of the I.T Act, instead of directing the matter to the Ld. Assessing officer as all the details and supporting were available with him. 6. That the appellant craves leave to add, supplement, modify the grounds here-in-above before or at the hearing of the appeal. 3. The brief facts are that the assessee is a public sector company is engaged in the business of bauxite mining, manufacture of Alumina and Aluminum & Power Generation and filed its return of income for the assessment year 2014-2015 electronically on 28.11.2014 with total income of Rs. 748,62,49,500/- and under the provision of section 115JB of the Act at Rs. 642,35,18,317/- and the return of income was processed u/s.143(1) of the Act and subsequently, the case was selected for scrutiny under CASS and notices u/s.143(2) & 142(1) of....
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.... by the AO. 8. Ld. AR before us submitted that the issue is squarely covered by the decision of the Tribunal in assessee's own case in ITA No.211/CTK/2017, order dated 29.06.2018, and drew our attention to para 11 of the aforesaid order, wherein the Tribunal has observed as under :- "11. On further appeal to the Tribunal, the ld. AR of the assessee before us submitted that the issue under consideration is squarely covered by the order of this Tribunal in assessee's own case for A.Y. 2006-07 and 2007-08 in ITA Nos. 233, 234/CTK/2011 dated 20.07.2012 and in ITA Nos. 66-68, 459, 511-512/CTK/2003 dated 20.11.2005 in respect of A.Y. 1994-95 to 1998-99 and 2000-01. Ld. AR further stated that the interest liability is as per Statute and has been charged to the Profit & Loss account on accrual basis and comply the mercantile system of accounting, and is allowable u/s 37 of the Act and prayed that addition by the lower authorities be deleted. The ld. AR filed a copy of order of the Tribunal in assessee's own case for the assessment year 2010-2011 in ITA No.352/CTK/2016 and other connected appeals, dated 27.04.2018, wherein the Tribunal has decided the issue in favour of the asse....
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....far as assessee is also offering interest on the amount deposited in the bank account as per the direction of the Hon'ble High Court. When interest on such deposit is brought to tax, there is no reason for disallowing interest payable to Government for non-payment of such duty in Government account. 6.The reasoning given by the AO for disallowing interest on non/delayed payment of water charges are that it was a contingent liability. We found that Tribunal in assessee's own case in earlier years had allowed this claim under similar circumstances and held that interest on unpaid electricity duty and water charges is fully allowable u/s.37 of the Act and provisions of Section 44A of the Act for disallowance is not attracted. 7.It is pertinent to mention here that the ITAT Cuttack Bench in the case of NALCO in the combined order dated 30-11-2005 has held that interest on disputed Electricity Duty are allowable u/s.37 of the Act and further the interest on Electricity Duty, even if a statutory liability, the same do not fall under the ambit of Section 43B of the Act and therefore, even if such interest is not paid the same is not to be disallowed under section 43B. ....
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....submissions and perused the material on record. We found that the similar issue has been decided by the Tribunal in assessee's own case for the assessment years 2007-08 & 2008-2009 in ITA No.343 & 392/CTK/2015, order dated 23.04.2018, wherein the Tribunal has observed as under :- "28. We have heard rival submissions and perused the material on record. The assessee has made the provision for leave encashment and the provision was not added back in the computation of income. As the ld. AR submitted that the above issue is covered by the order of the coordinate bench of the Tribunal in the case of Baitarani Gramya Bank in ITA Nos.318 & 319/CTK/2013 for assessment years 2008-09 & 2009-10, wherein the Tribunal held as under :- "19.1The DR also agreed with the submission of ld. AR of the assessee. In the circumstances of the case, we set aside the order of the CIT(A) and remit the matter to the file of the Assessing officer to re-adjudicate the issue in the light of the Hon'ble Supreme Court decision. Hence, this ground is allowed for statistical purposes. 20. In the result, appeal for the assessment year 2008-09 is partly allowed for statistical purposes." ....
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....ssment year 2010-2011 along with other connected appeals has observed as under :- 22. From the above judicial decisions, we find that the Tribunal has restored the disputed issue to the file of AO for re-examination and re-verification and apply the provisions of Section 14A r.w.rule 8D and in the instant case, the issue being similar, we find that the AO has not complied with the mandatory requirement of Section 14A (2) of the Act read with Rule 8D (1) (a) of the Rules and we respectfully follow the above judicial decision of the Tribunal and remit the disputed issue to the file of AO for re-examination and verification and to decide the issue on merits after complying the mandatory requirement of the provisions of Section 14A of the Act and this ground of appeal is allowed for statistical purposes. 14. From the orders both the authorities below, we observe that the assessee is earning income under different heads, as mentioned above. During the year, the assessee has received dividend of Rs. 110,068,076/- and claimed such income as exempt income. The assessee has only made disallowance at Rs. 1,20,828/- u/s.14A to earn the exempt income. The Assessing Officer has a....
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....submissions and perused the material available on record. We find that in the instant case the AO has treated the short-term and long-term capital gain earned by the assessee as business income of the assessee and in appeal, the CIT(A) has confirmed the action of AO. At the outset, we find that the Tribunal in assessee's own case for the assessment year 2010-2011 in ITA No.352/CTK/2016, order dated 27.04.2018 along with other connected appeals, has allowed the appeal of the assessee. The observations of the Tribunal in this regard are as under :- "39. We have heard rival submissions and perused the material available on record. We find that the main object of the assessee is manufacturing and assessee being a public sector company has enough funds and made investment in the mutual funds and on redemption the income is offered under the capital gain and the main object being the business and the maximum income is established through the direct business operations and not from the financial transaction. The investment has been made with the mutual funds/liquid funds/ closed ended funds and encashment on redemption/maturity. Further, the total profit earned by the assessee co....
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....ndividual case since the taxpayers find it difficult to prove the intention in acquiring such shares/securities. In this background, while recognizing that no universal principal in absolute terms can be laid down to decide the character of income from sale of shares and securities (i.e. whether the same is in the nature of capital gain or business income), CBDT realizing that major part of shares/securities transactions takes place in respect of the listed ones and with a view to reduce litigation and uncertainty in the matter, in partial modification to the aforesaid circulars, further instructs that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as Capital Gain or Business Income, shall take into account the following- a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares/securities would be treated as its business income, (b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its tra....
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....tal gains and not as business income and allow this ground of appeal of the assessee. 16. Respectfully following the above observations of the Tribunal, we direct the AO to accept the loss under long term capital gains and treat the income under the capital gains instead of business income. Ground No.5 is allowed. Ground No.6 : Additional Depreciation u/s.32(i)(iia) of the Act at Rs. 85,65,464/-. 17. Ld. AR before us submitted that the assessee is eligible for claim of additional depreciation and the assessee had also substantiated its claim before the lower authorities. Therefore, claim of additional depreciation may kindly be allowed. On the other hand, ld. DR relied on the order of AO. 18. After hearing both the parties and perusing the material on record along with orders of authorities below, we find that the assessee has claimed additional deprecation u/s.32(1)(iia) of the Act, however, the AO disallowed the same on account of the fact that the assessee could not produce the particulars/details of actual cost during the course of assessment proceedings. The CIT(A) has dealt with the issue in details and restore the issue to the file of AO for verification of claim....
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.... My predecessor has also decided the issue under similar facts and circumstances for the AY 2007-08 vide order dt.7.5.2015 in appeal No.0176/14-15 and for the AY 2008-09 vide order dt.8.6.2015 in appeal No.0544/14-15, by directing the AO for necessary verification, which have been followed by me in my order dt.9.6.2016 in ITA No.0492/14-15 for the AY 2010-11 and order dt.30.6.2016 in ITA No.0713/14-15 for the AY 2012-13. The issues being similar in the assessment year under appeal, the AO is directed to verify once again the additions to the plant & machinery to the extent of Rs. 7,77,14,686/-, on which additional depreciation claim has been disallowed in assessment, after calling for the necessary details from the assessee to ascertain the date of acquisition, and allow additional depreciation as per law after such verification." From the above observations of the CIT(A), we are of the considered opinion, that the CIT(A) has already remitted the issue to the file of AO to allow the claim of the assessee after verification of necessary details. Therefore, any order/direction by us, at this stage, on this issue, would be futile exercise. However, a reasonable order is exp....