AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 853
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....nt order that expenses of Rs. 453.53 Crores were attributable to earning of exempt income." 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to compute the disallowance under rule 8D(2)(iii) on the investment excluding investment of Rs,328.78 crores as on 01.04.2012 and Rs. 385.05 crores as on 31.03.2013 and investment in Foreign company as on 01.04.2012 at Rs. 10.43 lakhs and as on 31.03.2013 at Rs. 33.31 lakhs relying on the decision of the Hon'ble ITAT in the case of Garware Wall Ropes Ltd. (65 SOT 83) without appreciating the fact that the decision of Hon'ble ITA T has not been accepted by the department and appeal has been admitted by the Hon'ble High Court." 3. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that the broken period interest is allowable on the matching principles, without realizing that the same has not been incurred for realizing the interest on securities as enunciated by the Apex court in Vijaya Bank Ltd. (57 Taxman 152) (SC)." 4. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to all....
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....ates to deleting the interest disallowance under Rule 8D(2)(ii). During the assessment the AO noted that the assessee has earned exempt income of Rs. 9.97 Crore. The assessee made suo moto disallowance of Rs. 22,38,426/-. The working of the assessee was not accepted by AO. The worked out the disallowance at Rs. 28,02,45,208/- as given in para 4.5 on page 18 of his order. the AO worked out disalwance under Rule8D(2)(ii) of Rs. 26,01,60,853/- and Rs. 2,00,84,355/- under Rule 8D2(iii). However, he set off the suo moto disallowance carried out by the assessee from the disallowance worked out by him and made a net disallowance of Rs. 27,80,06,782/-. On appeal, the Ld.CIT(A) deleted the disallowance under Rule 8D2(ii) with the following observations:- "6.4 I have carefully considered the facts of the case, discussion of the AO in the impugned order as well as oral contentions and written submissions of the appellant. The appellant is a banking company and carries on the banking business as provided in the Banking Regulation Act, 1949. The appellant has various subsidiaries companies, which are in the business of life insurance, stock broking, asset management, NBFC etc. Besides invest....
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....ase of HDFC Bank Ltd. vs. DCIT (Supra), the disallowance made by the AO under clause (ii) of Rule 8D(2) of the Rule u/s 14A of the Act is directed to be deleted. Ground No. I is accordingly, allowed." 6. The Ld. DR present for the revenue heavily relied upon the order of the assessing officer. The Ld.AR for the assessee, on the other hand, submitted that the issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessees own case in ITA Nos 1657, 1629/Mum/2012; 3491, 3592, 3593, 6394, 6217/M/2013 for AYs 2008- 09 to 2011-12. Further, relying upon the following judgements, has submitted that when own funds are more than the amount of investments made for earning tax free dividends, no disallowance u/s 14A is warranted. He also submitted that when the investments are made in view of having strategic interest, no disallowance could be made. The following are the decisions, the Ld.Counsel relied upon:- 1. HDFC Bank Ltd vs DCIT (2016) 383 ITR 529 (Bom) 2. CIT vs HDFC Bank Ltd (2016) 383 ITR 529 (Bom) 3. CIT vs Reliance Utilities & Power Ltd (2009) 313 ITR 340 (Bom) 4. CIT vs Bombay Oil Industries Ltd 23014) 42 Taxmann.com 440 (Bom) 5. CIT vs R....
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....al Mining Ltd vs DCIT 67 Taxmnn.com 260 10. DCIT vs Rare Enterprises ITA No.5207,5208/M/2016 8. The Ld.AR further submitted that when investments are not for the purpose of yielding income, that part of investment is to be excluded from the working of disallowance u/r 8D(2)(iii). For this proposition, the Ld.AR relied upon the following precedents:- 1. Vireet Investment (P) Ltd 82 Taxmann.com 415 (Del)(SB) 2. Kotak Securities Ltd ITA No.666, 7055/M/16 3. Ageis Logistic Ltd ITA No.1945/M/2016 4. Reliance Capital Ltd ITA No.4008/M/2016 5. Stock Traders Pvt Ltd ITA No.2108/M/2006, 4403 & 687/M/2011 6. Reliance Capital Ltd ITA No.6396 & 6397/M/2017 7. Syntex Corporation P Ltd ITA No.2994/M/2012 8. Garden Court Distilleries P. Ltd ITA No.5562/Mum/2016 9. Bombay Oxygen Corporation Ltd 86 Taxmann.com 88(Mum) 10. Sajjan India Ltd 89 Taxmann.com 21 (Mum) 11. Integrated Coal Mining Ltd 67 Taxmann.com 260 (Mum) 12. Joy Beauty Care (P) Ltd vs DCIT ITA No.786/Kol/20134 13. DCIT vs Skill Infrastructure Ltd 5786/Mum/2017 14. Wartsila India Ltd vs ACIT ITA No.5002/M/2013 15. Vrindavan Services Pvt Ltd v. DCIT ITA Nos 10, 11,12,15,232, 233/M/2015 9. We have conside....
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....Bom) 5. Indian Bank vs DCIT 44 Taxmann.com 339 (Mad) 6. DCIT vs Dena Bank ITA No.1407/M/16 & 1408/M/16 7. DCB Bank Ltd vs. ACIT ITA No.820/M/14 & 615/M/14 8. ACIT vs Dena Bank ITA No.5259/M/14 9. DCIT vs Bank of Baroda ITA No.5605 & 5604/M/16 10. CBDT circular 28 of 2015 CBDT circular 18 of 2015 11. ACIT vs The W.B. State Co-op Bank Ltd ITA No.324&325/Kol/2018 12. DCIT vs Bank of Baroda ITA No.4355,4504,5082, 5020,4505,4356,5602/M/2018 13. DCIT vs Bank of Baroda ITA No.1222, 1221, 1120,1121/M/2018 14. ADIT vs HSBC ITA No.2519,2520, 2679, 2680,4424,4424 /M /2004 13. The Ld.AR of the assessee further submitted that the issue is squarely covered in favour of the assessee by the judgment of Hon'ble Supreme Court / Bombay High Court / Tribunal. 14. We have considered the submissions of the parties and perused the order of lower authorities and the various case laws relied by the ld AR for the assessee. During the assessment the AO required the details of the broken period interest expenses. The assessee furnished such interest on broken period expenses of Rs. 88,41,69,624/-. The AO disallowed the same holding that the securities are held till the maturity which con....
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....r the purpose of the trade; (v) There is not any specific provision for such deduction from sections 30 to 36 of the Income-tax Act. So, the residuary section 37 only comes to play and the primary condition for allowance under this section is the existence of business. As elaborated in the above points, there is neither any real expenditure at the stage of grant or otherwise, nor the expenditure if at all any, can be qualified as Revenue in nature. The CBDT circular No.9/2007 dated 20-12-2007 has clearly provided that where ESOPs are purchased by the Company, and then issued to the employees then the same is allowed; else it is not an expenditure. For thisw proposition, the AO relied upon the decision of Ranbaxy Laboratories Ltd vs ACIT [124 TTJ 771 (2009)(Delhi Tribunal). Further, in giving its judgment, the Delhi Tribunal held that the issue of shares at below market price does not result into incurring any expenditure; rather it results into short receipt of share premium which the assessee was otherwise entitled to. The receipt of share premium is not taxable and hence any short receipt of such premium will only be a notional loss and not actual loss for which no liability is....
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....17 17. We have considered the submissions of both the partied and perused the record. We have noted the AO disallowed the ESOP as we have recorded in para 15 above. However, the ld CIT(A) allowed relief to the assessee by following the order of his predecessor in assessee's own case for AY 2009-10 dated 12.11.2015 and for AY 2012-13 dated 19.01.2016.The ld CIT(A) also relied on the decision of Special Bench of Bangalore Tribunal in Biocon Ltd (supra). We have further noted that the order of ld CIT(A) in appeal for AY 2009-10 & 2012-13 has been affirmed by Tribunal in ITA No. 698/Mum/2016 sated 20.12.2017 and in ITA No.2817/mum/2016 dated 28.02.2018, thus, we do not find any reason for interfering with the order of ld CIT(A), which we affirms. In the result this ground of appeal is dismissed. 18. Ground No. 5 pertains to disallowance of urban (non rural) bad debts. The brief facts are that the assessee had debited an amount of Rs. 7,95,88,80,461/- in the books being net provision for bad and doubtful debts / write off / recover / tax, etc. The assessee submitted the break of this amount, whereby it stated that bad debts amounting to Rs. 1,30,06,04,016/- pertained to non rural bra....
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....T Vs Kotak Mahindra Bank Ltd ITA No.2817/M/16 & 38/M/18 confirmed the action of ld CIT(A). The Tribunal while confirming the order of ld CIT(A) followed the decisions of Hon'ble Supreme Court in Catholic Syrian Bank Ltd vs CIT 343 ITR 270(SC) and in CIT vs. Karnataka Bank Ltd 349 ITR 705 (SC), 25 taxmann.com 235. Hence, we do not find any infirmity in the order passed by ld CIT(A), which we affirms. In the result this ground of appeal is dismissed. 23. In the result the appeal of the revenue is dismissed. ITA No.782/Mum/2018 - AY 2014-15 24. In this appeal for AY 2014-15, the revenue has raised the following grounds of appeal:- "1. "On the facts and In the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the disallowance under rule 8D(2)(ii) ignoring the facts brought out in the assessment order that expenses of Rs. 504.53 Crores were attributable to earning of exempt income." 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to compute the disallowance under rule 8D(2)(iii) on the insvestment excluding investment of Rs. 385.05 crores as on 31.03.2O13 and Rs. 459.19 crores as on 31.O3.2O14 and inves....