TaxTMI 
TaxTMI 
2018 (9) TMI 1924
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....nt year 2007-08. 2.1 The assessee has raised the following grounds of appeal in ITA No. 1170/Ahd/2011 for Assessment Year 2007-08. "Your Appellant being dissatisfied with the order passed by the Learned Commissioner of Income Tax (Appeals) -- Gandhinagar, Ahmedabad, presents this appeal against the same on the following amongst other grounds of appeal which arc without prejudice to each other. 1. The order passed by the Commissioner of Income Tax (Appeals) is erroneous and requires to be modified. It is submitted that be so done now. 2. The learned CIT (A) erred in law and on facts in upholding the disallowance U/S.14A of the Income Tax Act, 1961 (hereinafter referred to as the "Act") in respect of administration and promotion expenses to the extent of Rs. 25,00,000/- on an adhoc basis. It is submitted that the appellant has not incurred any expenditure for earning exempt income. It is submitted that it be so held now. 2.1 Without prejudice to the above, the learned CIT (A) erred in law and on facts in not considering the details of expenses furnished by the appellant to be considered as having been incurred in relation to exempt income. It is submitted t....
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....as write back of provision for contingent liability which was not allowed as deduction in the year of provision from the book profit and thereby was required to be reduced from the book profits in accordance with Explanation to Section 115JB of the Act. It is submitted that it be so held now. 5 The learned CIT(A) erred in holding that the interest u/s 234B & 234C is mandatory. In the facts and circumstances of the case, it is submitted that appellant had become liable to tax on account of retrospective amendment to Explanation to Section 1 15JB of the Act & therefore interest u/s 234B & 234C is not chargeable. It is submitted that it be so held now. Your appellant prays for leave to add, to alter and/ or to amend all or any of the grounds before the final hearing of appeal." 2.2 Revenue has raised the following grounds of appeal in ITA No.1115/Ahd/2011 for Assessment year 2007-08. 1. The learned CIT(Appeals) has erred in law and on facts in deleting the addition made u/s.43B of the IT Act amounting to Rs. 13,72,02,294/- 2. The learned CIT(Appeals) has erred in law and on facts in restricting the disallowance u/s.14A of the Act from R.7,10,64,6....
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....med that no borrowed fund attributes/allotted to such investment in shares. iii. The provisions as specified in Rule 8D of Income Tax Rule are not applicable for the year under consideration. iv. It was also submitted that the Ld CIT(A), as well as the Hon'ble ITAT, had decided the issue in earlier years in favor of the assessee. 3.3 However, the AO disagreed with the submission of the assessee by observing that there was no one to one correlation between the fund and investment made in such shares. Accordingly, the AO worked out disallowance of the expenses in relation to exempted income as detailed under:- I Amount of expenditure directly relating to the income which does not form part of total income NIL (A) Amount of expenditure by way of interest 11,01,92,468 (B) Average value of investment on which tax free income is received for receivable 169,62,85,491 (C) Average value of total assets as appearing in the Balance Sheet. 298,67,07,812 II (A) X(B) /(C) Rs. 6,25,83,251 III 5% of the average value of investment on which tax free in....
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....ses on deduction claimed u/s.80M was deleted by the ITAT. Therefore, it is held that no interest expenses u/s.14A is required. Disallowance of administrative expenses "The assessee has failed to give any basis for the working. I have considered the facts that at the closing of the year there were investment on which exempt dividend was earned/could have been earned amounting to Rs. 117.69 crores. Besides there were exempt capital gains on sale of such investments. The expenditure related to it is also not allowable and is to be disallowed u/s.14A, because long term capital gains on sale of such equity is exempt. The assessee has started taking decisions about sale of such equity is also. All this requires considerable management time and expenses. Looking to and prom expenses are over Rs. 5 crores and other expenses also requires to be proportioned; I uphold a disallowance of Rs. 25,00,000/- u/s.14A of the Act. The balance addition is deleted." Being aggrieved by the order of Ld.CIT(A) both the assessee and Revenue are in appeal before us. The assessee is in appeal against the confirmation of disallowance made by the Ld.CIT(A) for Rs. 25,00,000/- on account of ....
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....e made under section 14A of the Act. CIT Vs. Catholic Syrian Bank (2011) 9 taxmann.com 148(Ker.) ACIT Vs. M/s.Vepar Pvt. Ltd. in ITA No.1374/Ahd/2009 Submission before the CIT(Appeals) Appellant had submitted vide aforesaid submission an estimate of administrative expenses that could be considered to have been incurred in relation to the exempt income before the CIT(Appeals). However, the same was not considered by Hon'ble CIT(Appeals) Without prejudice to the submission at ground no. 2.1 above, it is submitted that at most disallowance of Rs. 58,000 as per the computation provided by the appellant be confirmed by the CIT (Appeals) be deleted." 7. On the other hand the Ld. DR submitted that the exempted income could not be earned without incurring the expenses. Therefore the expenses incurred in relation to such income needs to be disallowed. The ld. DR in support of his claim extended his reliance on the judgment of the Hon'ble Supreme Court in the case of Maxopp Investment Limited Vs. CIT reported in 402 ITR 640. 8. We have heard the rival contention and perused the materials available on record. The issue in the instant case rel....
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....e. Therefore we do not rely on the same. Thus the appeal of the assessee is partly allowed. Coming to the Revenue appeal in ITA No.1115/Ahd/2011. 9. The Ld. DR before us submitted that the assessee was using mix fund. Therefore, some disallowance on account of interest expenses should be made as there was no one to one correlation between the own fund of the assessee and investment made in the shares. 9.1 Regarding the administrative expenses, the ld. DR submitted that the expenses incurred in relation to such income need to be disallowed. The ld. DR in support of his claim placed his reliance on the judgment of the Hon'ble Supreme Court in the case of Maxopp Investment Limited Vs. CIT reported in 402 ITR 640. The ld. DR vehemently supported the order of the AO. 10. On the other hand, the Ld AR before us submitted as under: "It is submitted that the entire investment are from interest free own funds and that no borrowed funds have been utilized in respect of the same. In this regard, in similar facts and circumstances in appellant's won case, the Hon'ble ITAT has deleted disallowance of proportionate interest expenditure in AY 2005-06 and AY 2006-07 holding tha....
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....ground No. three is that Ld. CIT(A) erred in directing the AO to reduce the amount of dividend income while determining the profit u/s.115JB of the Act after adjusting the expenses of disallowance made u/s 14A of the Act. 13. The AO while working out the tax liability under the provision of section 115JB of the Act has added the amount of disallowance made u/s 14A r.w.r. 8D of the Income Tax Rule by Rs. 7,10,64,768/- only 14. Aggrieved assessee preferred an appeal before Ld CIT(A) who has confirmed the order of AO by observing as under: "It has already been decided that certain part of expenses have been incurred for earning the exempt income. These expenses are not notional but part of actual expenses which have been incurred, and have been correctly apportioned. Clearly net exempt income i.e net expenses incurred on earning it is only required to be reduced. The AO is accordingly directed to reduce this amount from the book profit subject to adjustment of expenses made for earning it." Being aggrieved by the order of the Ld. CIT(A) assessee is in appeal before us. 15. The ld. AR for the assessee before us submitted as under: "Dividend income of Rs. 3....
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....ile computing amount of book profits?" 17.1 The above question raised before the Hon'ble Gujarat High Court was answered as below: "8. Taking into consideration the evidence on record and considering the decision of this court in the case of Commissioner of Income Tax - I vs. Gujarat State Fertilizers & Chemicals Ltd. (supra), we are of the opinion that issue Nos. (iii) and (iv) required to be answered in favour of the assessee and against the revenue. In that view of the matter, we answer questions (iii) and (iv) referred to us in favour of the assessee and against the revenue. The appeal of revenue is dismissed." 17.2 We also note that in the recent judgment of Special Bench of Hon'ble Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. reported in 82 Taxmann.com 415 held that the disallowances made u/s 14A r.w.r. 8D cannot be the subject matter of disallowances while determining the book profit u/s 115JB of the Act. The relevant portion of the said order is reproduced below: "In view of above discussion, the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to the computation as contemplated ....
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....f dividend income. However, we also note that there is no mechanism given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/ determine the disallowance. Therefore in the given facts & circumstances, we feel that ad-hoc disallowance will serve the justice to the Revenue and assessee. Therefore to put the dispute to rest in given facts & circumstances, we direct for the ad-hoc disallowance to avoid the multiplicity of the proceedings and unnecessary litigation. 17.8 We also feel to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. But now we are of the view that as there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently, therefore there would be unnecessarily further litigation if the matter is sent back to the file of AO. 17.9 Thus, considering the peculiar circumstances of the case, we propose to limit the disallowance on an ad-hoc basis @ 1% of the dividend/exempt income as per the clause (f) to Explanation-1 of Sec.....
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....ce correctly debited to the profit and loss account. The fact that it was not paid is material only with respect to section 43B. In the absence it would have been deductibile expense even under normal provisions of income tax act. Assessee's claims fails on all accounts, it is neither being contingent liability nor a provision made but an actual claim debited to the profit and loss account. (iv) The Hon'ble Supreme Court in the case of Apollo Tyres 255 ITR 273, had held that no adjustments to the book profits as per the audited accounts are permissible, beyond what is specifically mandated in section 115JA/JB. No remission of an expense, correctly credited to the profit and loss account by the assessee as its income; forming part of its profit as per audited account can be allowed as deduction later on. The AO's decision on this account is fully justified and is upheld. The assessee's plea to this extent raised in the ground is rejected." 20.1 Aggrieved by the order of Ld. CIT(A) assessee is in appeal before us. The Ld. AR before us submitted as under : "During AY 2007-08 appellant has credited to profit & Loss Account of Rs. 13,72,02,294/- which repre....
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.... find important & relevant to refer to the provision of the clause (i) of explanation to 115JB of the Act which reads as under: "79[Special provision for payment of tax by certain companies. 80 115JB. (1) XXXXXXXXXXXXXXXXXXXXXXXXXXXXX (2) XXXXXXXXXXXXXXXXXXXXXXXXXX Explanation 86[1].-XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX if any amount referred to in clauses (a) to (i) is debited to the profit and loss account or if any amount referred to in clause (j) is not credited to the profit and loss account, and as reduced by,-]]] 94[(i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit to the profit and loss account), if any such amount is credited to the profit and loss account: Provided that where this section is applicable to an assessee in any previous year, the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or p....
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....r section 115JA and decided that the income under normal provisions was more. In that situation it is to be presumed that the provision was added back to the book profit of that year. Even by means of Explanation ( g)introduced to section 115JA by the Finance (No. 2) Act, 2009, with retrospective effect from April 1, 1998 the provision for bad and doubtful debts would be deemed to have been added back in computing the book profit in that year and so the amount, now credited to the profit and loss account, is to be reduced by virtue of the provision of section 115TB. In view of this there is justification in the assessee's contention in claiming the provision as deduction in the computation of book profit in this year. On the fact that the assessee had been disallowed in that year under the normal computation and by virtue of the amendment now brought with retrospective effect from April 1, 1998, the provision for bad debt is deemed to have been added back in that year withdrawal and crediting into the profit and loss account now results in double taxation. Consequently, the assessee is correct in excluding the amount while computing the income under section 115JB. Accordingly t....
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....t had made provision for NPA of Rs. 30,87, 00,640/- which as per the amended provisions was required to be added back to the profit and loss account. The appellant voluntarily offered the same to tax during course of assessment proceedings. Hence the book profit has been arrived after considering the retrospective amendment to Section 115JB of the Act. Interest under section 234B and 234C has arisen purely due to the addition of provision for NPA of Rs. 30.87 Crores made consequent to the retrospective amendment. In absence of retrospective amendment referred above, no advance tax would have been payable by the appellant. The appellant couldn't be expected to pay advance tax based upon the total income computed having regard to a retrospective amendment made several months after it filed its return of income. Accordingly, the levy of interest u/s.234B and 234C is not justified in the facts of the case. Reliance is placed on the following decisions Decision of Hon'ble ITAT Chandigarh on case of Hindson International Vs. Income Tax Officer [2010] 33 TTJ 83 (CHD) Decision of Hon'ble Kolkatta High Court in the case of Emami Ltd Vs CIT in ITA NO....
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....es under the provision of section 43B of the Act under the relevant year. Thus such amount of interest expenses has suffered the taxes in the earlier years. Therefore the same should be allowed as deduction while determining the total income of the assessee under normal computation of income. 31.1 However, the AO disagreed with the submission of the assessee and made disallowance of the deduction claim by it for Rs. 13,72,02,294/- only. 32. Aggrieved assessee preferred an appeal before Ld.CIT(A). The assessee before the Ld.CIT(A) submitted that it has already offered the impugned amount of interest expenses written back to tax by virtue of the provisions of section 43B of the Act. 32.1 The Ld.CIT(A) called for the remand report from the AO on the submission filed by the assessee. The AO in his remand report has not admitted the claim of the assessee by observing that there was no detail available justifying that the interest was payable to Vijaya Bank. The assessee in response to the remand report filed letter from C.A. certifying that the impugned interest expenses are representing the liabilities payable to Vijaya Bank which has been offered to tax in the earlier years. ....
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....tained and is deleted." 32.3 Being aggrieved by the order of Ld.CIT(A) Revenue is in appeal before us. 33. The ld. DR before us vehemently supported the order of the AO. 34. On the contrary, the ld. AR for the assessee before us submitted as under: "The amount of Rs. 13,72,02,294/- is a part of Rs. 3207.53 lacs which has been written back to profit and loss account as remission of interest. The amount of Rs. 13,72,02,294/- pertains to interest waived by Vijaya Bank Ltd. and no longer payable by the company and hence credited to profit and loss account. The amount of interest payable to Vijaya Bank has been disallowed by the assessee in all respective assessment years from A.Y. 2002-03 to A.Y. 2006-07 u/s.43B(e) of the Act. The assessee has claimed exclusion of interest waived during the year under the premise that the amount when charged to profit and loss account was offered to tax by disallowing the same u/s 43B (e) of the Act. Hence in the year of written back of such provision for interest the amount has been claimed as exclusion from income. Further, without prejudice to the above, the assessee also contends that no allowance was granted in any of the earlier....
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....enses when it is explicitly allowable as per CBDT circular no.8/2005 dated 29/08/2005. In answer to FAQ no.103, CBDT has answered that ''Accordingly, the FBT is an allowable deduction in the computation of ''book profit'' under section 115JB of the Act.'' The expense is clearly a business expense and only for the purpose of computation of income under the head income from business profession this has been made not allowable, by a specific provision. This is allowable deduction while working the book profit, which has been correctly done by the assessing. The disallowance by the directed to be deleted." 39.2 Being aggrieved by the order of the Ld. CIT(A) Revenue is in appeal before us. 40. At the outset, we find that the CBDT in its circular no.8/2005 dated 29/08/2005 has held that the FBT is an allowable deduction in the calculation of book profit under the provision of section 115JB of the Act. Therefore, we do not find any reason to interfere in the findings of Ld.CIT(A). Hence this ground of appeal of the Revenue is dismissed. 41. The fourth issue raised by the Revenue in this appeal in the ground no. 4 is that Ld.CIT(A) erred in allowing deduction of dividend income fr....
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....orrect. It is submitted that it be so held now. 2.2 The learned CIT(A) erred in law and on facts in rejecting the disallowance of administrative expenditure related to exempt income of Rs. 1,00,000/- made by appellant in its return of income on the ground that no basis for working of disallowance made was provided by the appellant and the estimate was ad hoc. It is submitted that it be so held now. 2.3 While computing disallowance under section 14A as per Rule 8D, the learned CIT(A) erred in not considering the average investment at net of Provision for NPA. In the facts & circumstances of the case the same have to be considered net of provision. It is submitted thai it be so held now. 3. The learned CIT(A) erred in making addition by way of the disallowance of Rs. 71,00,603/ made under section 14A r.w.r. 8D to the book profit while computing deemed total income u/s 115JB of the Act. It is submitted that it be so held now. 4. The learned CIT(A) erred on facts and in law in not directing the A.O. to reduce the book profit u/s 115JB by Rs. 15,46,64,446/- being provision for diminution in value of investment written back in view of clause (i) to Exp....
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....nvestments without considering the provision made for NPA in respect of such investment while making the disallowance under section Rule 8D of Income Tax Rule. 47.2 The assessee also submitted that the income earned from the investment in Gujarat Venture Capital Fund is not free from tax. Therefore the same should not be considered while working out disallowance under Rule 8D of the Income Tax Rule. 47.3 The assessee also submitted that it had offered the long-term capital gain income from Gujarat Venture Capital Fund for Rs. 3,61,67,899/- to tax. 47.4 Similarly the dividend income from the Gujarat Venture Capital Fund is not exempt from the provision of income tax Act. 47.5 In view of above the assessee contended that only net investment should have been taken for the purpose of disallowances. 47.6 Without prejudice to above the assessee also contended that at the most disallowance under Rule 8D r.w.s 14A of the Act can be made for Rs. 50,87,804/- out of which sum of Rs. 1,00,000/- has already been disallowed. Therefore the remaining amount of Rs. 49,87,804/- should have been disallowed under the normal computation of income. 47.7 The Ld. CIT(A) after considering....
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....uld be applicable , which was not the case for A.Y. 2007-08 and therefore the disallowance of other expenses is required to be made on the basis of the formula specified in Rule 8D, which amounts to Rs. 72,00,630/- after the appellant's estimate has been held to be correctly rejected (refer para 5.2.2) as under: Proportionate indirect expenses (i) value of investment on 31/03/2007 [paper book page 33] Less: Investments in Gujarat Venture Capital Fund income from which is taxable. Value of Investment on 31/03/2007 (ii) Value of investment on 31/03/2008 [paper book page 33] Less: Investments in Gujarat Venture Capital Fund income from which is taxable. Value of investment on 31/03/2008 (ii) Average value of investments =Rs. 15,58,652 + Rs. 13,21,600 2 =Rs. 14,40,126(000) 0.5% of its Rs. 72,00,603/- Less: Already disallowed in statement of income Balance disallowance under Rule 8D 16,76,810 1,18,158 15,58,658 13,75,308 53,708 13,21,600 (i) + (ii) 2 Rs. 72,00,603 1,00,000 71,00,603 Since the appellant has already disallowed Rs. 1,00,00....
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....ed in Rule 8D r.w section 14A (2) of the Act. Accordingly, when no satisfaction recorded by the AO to the effect that the disallowance made by the appellant in the return of income is incorrect, no further disallowance should have been made. The Hon'ble CIT(A) has failed to understand that the investments have been made out of won funds and therefore, no expenses have been incurred to earn the income which is not includible in the total income of the appellant. CIT(A) has erred in rejecting the disallowance made by the appellant in its return of income on the ground that no basis for working of disallowance made was provided by the appellant. In this regards, attention is invited to the submission dated 20/08/2010 made by the appellant to the AO wherein the computation of disallowance under section 14A has been submitted. CIT(A) has erred in not considering the average investment at net of provision for NPA while computing the disallowance under section. In view of the definition of term 'total assets' as defined under sub-rule (3) to Rule 8D of the Rules for the purpose of computation of disallowance under the said provisions, average value of investment should have been computed ....
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....14A wherein it was held by Special Bench of Hon'ble ITAT that Rule 8D would come into operation with retrospective effect when the Assessing officer is not satisfied with the correctness of the claim in respect of such expenditure, there is material difference to the legal approach of the matter. After insertion of sub-sections (2) 85 (3) to Section 14A and the decision of the Special Bench in the case of Daga Capital Management Pvt. Ltd. (supra) that Rule 8D is operative retrospectively, the onus to prove nexus between the borrowed funds and investments giving tax free returns, has shifted to the assessee. As has been stated by Hon'ble Special Bench, what is relevant is to work out the expenditure in relation to exempt income and to examine whether expenditure incurred by the assessee has resulted into exempt income or taxable income. In the assessee's case, admittedly the investment made has resulted into exempt income or possible exempt income. In view of the above facts and circumstances of the case, I hold that Section 14A read with Rule 8D is applicable in the assessee's case. Accordingly, the expenditure in relation to the exempt income is computed as under" ....
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....as under: Under Normal computation of Income 56.1 The assessee filed the computation of income pertaining to the AY 2006-07 evidencing that the provisions were offered to tax under normal computation of income. Therefore the same has suffered the tax in the AY 2006-07. In the year under consideration the relevant investment was sold, and hence the corresponding provision was written back. Therefore the same should not be disallowed. Under MAT computation of Income 56.2 The assessee submitted that it had made the addition on account of such provisions made for the diminution in the value of assets in the revised computation of income filed along with the rectification application under 154 of the Act pertaining to the AY 2006-07. 56.3 The ld. CIT-A after considering the submission of the assessee adjudicated the issue as under : Under Normal computation of Income "4.2 I have carefully considered the submissions made by the A.Y. and contentions raised by him in respect of above grounds and also carefully gone through the relevant pages of paper book referred by him in connection with the above ground of appeal. As far as the ground No.2 regarding the ....
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....w and on facts in directing to delete the disallowance made by the AO of Rs. 15,46,64,446/- being provision for diminution in value of investments without considering the facts that major amount of long term capital gain arisen on sale of these investments is claimed exempt u/s 10(38) on account of payment of Security transaction Tax on the same. First we take up the Assessee appeal ITA No. 208/Ahd/2012 58. The ld. AR before us submitted as under: * The provision for amount of Rs. 15,46,64,446/- written back was made during A.Y. 2006-07. * The entire provision for NPA (including provision for diminution in value of Investment) had been added back in statement of total income for A.Y. 2006-07 and thus disallowed in that year. * Since in the year in which the provision was made i.e. A.Y. 2006-07 in the books of accounts of the appellant the same was not claimed as deduction and was added to the total income of the appellant, the write back of the provision during the year under consideration is not taxable as income. * A computation of book profit for A.Y. 2006-07 after adding the provision for NPA made during that year (including that made f....
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....entions and perused the materials available on record. At this juncture we are inclined to reproduce the revised computation of income in relation MAT computation for the AY 2006-07 which reads as under: REVISED STATEMENT OF TOTAL INCOME Amount Rs. Amount Rs. Computation of Book Profit u/s.115JB Net profit as per profit and loss Account 139,640,216 Add/(Less) : Adjustments as per Explanation Write back of provision of contingent Liability added to Book Profit in earlier years (427,233,890) Dividend exempt u/s. 10(34) (11,966,238) Profit on sale of Investment exempt u/s. 10(38) (547,643,825) (986,843,953) Book Profit as per section 115JB (847,203,737) 7.5% thereon (63,540,280) Commission of tax liability: (a) Tax on Normal Income (b) 7.5% of Book Profit (63,540,280) 60.1 On perusal of the same we note that there was a loss under MAT computation for Rs. 84,72,03,737.00. Accordingly, we are of the view that t....
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....B. Accordingly the ground is allowed." 60.2 In the light of the above decision we hold that the effect of the provision created for the diminution in the value f assets has been duly given while determining the book profit u/s 115JB of the Act. The ld. DR has also not brought anything contrary to the arguments advanced by the ld. AR for the assessee. Accordingly, we have no hesitation in reversing the order of the authorities below. Thus the ground of appeal of the assessee is allowed. Now Coming to the Revenue Appeal in ITA 419/Ahd/2012 61. The ld. DR relied on the order of AO. 62. On the other hand the ld. AR supported the order of the ld. CIT-A. 63. We have heard the rival contentions and perused the materials available on record. On perusal of the revised computation of income we note that the provision has already been added by the assessee to the total income as evident from the same which is reproduced as under: REVISED STATEMENT OF TOTAL INCOME Amount Rs. Amount Rs. 1. BUSINESS INCOME: Net profit as per Profit and Loss Account 1,39,640,216 Add: Disallowances/Items treated separately: Depreciation 3,8....
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....expenses although assessee has incurred interest expenses of Rs. 12,13,25,930/- during the year and also directing that investments in Gujarat Venture Capital Fund to be reduced for working out the disallowance. 3 The teamed CIT(Appeals) has erred in law and on facts in directing the AO to modify addition to book profit of disallowance made u/s 14A of the Act from Rs. 8,51,69,489/-to Rs. 72,00,630/- after restricting the addition to that extent. 4 The learned ClT(Appeals) has erred in law and on facts in directing the AO to allow deduction of Fringe Benefit Tax of Rs. 3.13.655/- and Security Transaction Tax of Rs. 38,031/- from the book profit calculated u/s 115JB of the IT Act. 5 On the facts and circumstances of the case the Ld.CIT(A) ought to have upheld the order of the Assessing Officer. 6 It is therefore prayed that the order of the learned CIT(Appeals) may be set aside and that of the A. O. be restored to the above extent 66. The First issue raised by Revenue in this appeal is that the Ld.CIT(A) erred in deleting the addition for Rs. 15,46,64,446/- being provision for diminution in the value of the investment. 67. At the outset, we n....
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....2012 appeal by the Revenue for A.Y 2009-10. 73.1 First we take up the appeal filed by the assessee in ITA No. 2473/Ahd/2012. 73.1.1 Assessee has raised the following grounds of appeal: "Your Appellant being dissatisfied with the order passed by the Learned Commissioner of Income Tax (Appeals) - Gandhinagar presents this appeal against the same on the following amongst other grounds of appeal which are without prejudice to each other: 1. The order passed by the Commissioner of Income Tax (Appeals) is erroneous and requires to be modified. It is submitted that it be so held now. 2. The learned CIT(A) erred on facts and in law in confirming disallowance of Rs. 76,95,549/- under section 14A read with rule 8D. It is submitted that it be so held now. 2.1. The learned CIT(A) erred on facts and in law in confirming disallowance of Rs. 76,95,5497- under section 14A read with rule 8D despite the fact that the A.O. had not recorded satisfaction that disallowance of Rs. 1,00,000/- made by the appellant in the return of income was incorrect. It is submitted that it be so held now. 2.2 The learned CIT(A) erred on facts and in law in confirming d....
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....) to Explanation 1 to Section 115JB but instead subject to the AO adjudicating the rectification application for AY 2006-07 and if the same was found to be correct then reduce the book profit following clause (i) of Explanation 1 to Section 115JB. It is submitted that in the facts and circumstances of the case the learned CIT(Appeals) should have granted such deduction in terms of clause (i) of explanation 1 to Section 115JB without making it subject to the AO passing necessary rectification order for AY 2006-07. It is submitted that it be so held now. Your appellant prays for leave to add, to alter and/ or to amend all or any of the grounds before the final hearing of appeal." 73.2 Appeal filed by the Revenue in ITA N0.2556/Ahd/2011. 73.2.1 The Revenue has raised following grounds of appeal. 1. The learned CIT(Appeals) has erred in law and on facts in deleting the addition made by the AO of Rs. 10,05,64,804/- in respect of provision for non performing assets written back made in AY 2006-07. 2. The learned CIT(Appeals| has erred in law and on facts in deleting the addition made by the AO of 10,05,64,804/- u/s.115JB, stating that the Assessee has sta....
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.... investment. Thus there cannot be any disallowance on account of interest expenses. We have already adjudicated the issue in favor of assessee in the ground of appeal no. 2 raised by the Revenue pertaining to the assessment year 2007-08 in ITA 1115/Ahd/2011 vide Para No.11 of this order. 74.4 Therefore respectfully following the same the ground of appeal of the assessee is allowed. 75. The next issue raised by the assessee in the ground no. 3 is that Ld.CIT(A) erred in making the addition of Rs. 76,95,549/- disallowed under the provision of section 14A r.w.r. 8D while calculating book profit under the provision of MAT. 76. At the outset, we note that we have already adjudicated the identical issue raised by the assessee in ITA 1170/Ahd/2011 vide Para no. 17 of this order. Respectfully following the same, we direct the AO to calculate book profit after making the disallowance as directed hereinabove. Thus the ground of appeal of the assessee is partly allowed. 77. The next issue raised by the assessee in this appeal is that Ld. CIT(A) erred in making the addition of Rs. 10,05,64,804/- being the provision for diminution in the value of investment written back while calcul....
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....miss the ground of appeal raised by Revenue. 86. Next issue raised by the Revenue in this appeal is that Ld.CIT(A) erred in deleting the addition made on account of fringe benefit tax and security transaction tax amounting to Rs. 3,01,590/- and Rs. 72,131/- respectively while computing book profit u/s.115JB of the Act. 87. At the outset, we note that the issue of fringe benefit tax and security transaction tax has already been adjudicated by us in the ground no. 4 of appeal ITA No. 419/Ahd/2012 raised by the Revenue pertaining to the assessment year 2008-09. The issue was decided in favor of the assessee by us vide Para No.71 of this order. Therefore respectfully following the same, the ground of appeal raised by the Revenue is dismissed. 88. In the result, the appeal of the Revenue is dismissed. 89. Now coming to the CO No. 106/Ahd/2014 by the assessee and ITA No. 2899/Ahd/2013 appeal by the Revenue for A.Y 2010-11. 89.1 First we take up the CO filed by the assessee: 89.1.1 Assessee has raised the following grounds in its Cross Objection: "Your appellant wishes to place on record following Cross Objections against Grounds mentioned in the appeal fi....
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....st issue raised by the assessee in its CO in its ground No. 1 & 1.1 is that Ld.CIT(A) has erred in confirming the disallowance of administrative expenses for Rs. 62,76,481/- under clause (iii) of Rule 8D r.w.s 14A of the Act. 91. At the outset, we note that the issue of the disallowance of administrative expenses under rule 8D(2)(iii), has already been adjudicated by us in the ground of appeal no.1 raised by the Assessee pertaining to the assessment year 2008-09 in ITA No. 208/Ahd/2012. The issue was decided partly in favor of the assessee for statistical purposes by us vide Para No. 51 of this order. 91.1 Therefore respectfully following the same we allow the ground of appeal of the assessee in part in terms of the direction as stated above. 92. The second issue raised by the assessee in its CO in its ground No. 1.2 is that Ld.CIT(A) has erred in confirming the adjustment of the disallowance of administrative expenses for Rs. 62,76,481/- under clause (iii) of Rule 8D r.w.s 14A of the Act while working out the book profit under the provisions of MAT. 93. At the outset, we note that the issue of the disallowance of administrative expenses under rule 8D(2)(iii), has alrea....
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.... appeal of the Revenue pertaining to the assessment year 2008-09 in ITA 419/Ahd/12 has been adjudicated in favor of assessee vide Para No. 67 of this order. Therefore, respectfully following the same, we do not find any reason to interfere in the findings of Ld. CIT(A). Hence the ground of appeal of Revenue is dismissed. 100. The second issue raised by Revenue in this appeal is that the Ld. CIT(A) ought to have held that the assessee is not entitled to the relief twice in the AY 2004-05 and 2010-11. 101. We have already adjudicated this issue in the ground No. 2 of the CO No. 106/Ahd/2014 raised by the assessee vide Para No 95 of this order. 102. Therefore respectfully following the same we allow the ground of appeal of the Revenue in terms of the direction as stated above. 103. The third issue raised by Revenue in this appeal is that the Ld. CIT(A) erred in deleting the addition for Rs. 24,64,63,140.00 on account of NPA written back while calculating the profit under section 115JB of the Act. 104. At the outset, we note that the identical issue in the ground no. 4 of the appeal of the assessee pertaining to the assessment year 2008-09 in ITA 208/Ahd/12 has been adju....