TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 72
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....see has raised the following grounds of appeal related with various additions/disallowances: Ground A: Disallowance U/S 36(1)(iii) - Rs. 3,46,618/-. Ground B : Disallowance U/S 14A- Rs. 91,30,772/- Ground C: Disallowances of pooja expenses - Rs. 11,86,451/- Ground D: Disallowances of club expense - Rs. 1,11,125/- Ground E: Transfer pricing adjustment for corporate guarantee - Rs. 16,78,495/-. Ground F: Capital receipt on account of TRANSFER OF TDR treated as Long Term Capital Gain. Ground G: Unutilized Cenvat credit of Rs. 22721044/-. Ground H: Interest under section 244A. Ground I: Interest under section 234D. Ground J: Addition to book profit under section 115JB on disallowance of section 14A r.w.r. 8D. 2. Brief facts of the case as gathered from the order of lower authorities are that assessee-company is in the business of manufacturing of marine and industrial gear boxes, diesel engines, generating sets etc. For the assessment year under consideration the assessee filed its return of income declaring total income of Rs. 84.53 crore under normal provision and book profit of Rs. 126.83 crore computed under section 115JB. While filing the return of income the ....
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....e assessee submits that this ground of appeal is covered in favour of assessee by the decision of Tribunal in assessee's own case for A.Y. 2006-07 & 2007-08 in ITA No. 7424/Mum/2010 dated 07.06.2019. There is no variance in the facts for the year under consideration, so far as disallowance under section 36(1)(iii) is concerned. The ld. AR further submits that the assessee gave advance to its subsidiary in A.Y. 1998-99, out of its own fund. The Assessing Officer made similar disallowance in earlier years, which have been deleted by the Tribunal. 6. On the other hand, the ld. DR for the revenue relied upon the order of lower authorities. 7. We have considered the submission of both the parties and perused the record. We have noted that on similar set of fact similar disallowance was made in A.Y. 2006-07 & 2007-08 and on appeal the disallowance was deleted by the Tribunal by passing the following order: 6. We have considered the rival submission of the parties and have gone through the orders of authorities below. During the assessment, the Assessing Officer noted that the assessee has claimed interest expenses of Rs. 6.57 Crore. The assessee was asked to justify for interest pai....
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....earlier years. The ld. AR submits that before Assessing Officer vide submission dated 18.10.2011 submitted that the assessee has sufficient own fund, investment was not made out of borrowing and interest disallowance was not justified. The investment of the assessee was the same as in preceding year except investment in mutual funds which reduced to Rs. 12.73 crore from Rs. 25.26 crore in Financial Year 2006-07. The ld.AR further submits that section 14A is not applicable to the investment in growth fund as held by Tribunal in Manugraph India Ltd. ITA No. 4761/Mum/2013. Further, in A.Y. 2006-07 and A.Y. 2007-08, the Tribunal restricted the similar disallowance to 2% of the dividend income. The ld. AR submits that similar order for A.Y. 2006-07 & 2007-08 may be followed. In alternative submissions the ld AR for the assessee submitted that indirect expenses may be restricted to .5% of average value of investment. 10. On the other hand, the ld. DR submits that from the Assessment Year 2008- 09, the disallowance under section 14A is to be computed as per the methodology prescribed under Rule 8D. The ld. AR submits that Hon'ble jurisdictional High Court in Godrej & Boyce Ltd. (328 ITR ....
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....2007-08, which was allowed by co-ordinate bench by passing the following order: 17. We have considered the submission of the parties and have gone through the orders of authorities below. We have noted that the assessee has claimed Pooja Expenses of Rs. 7,05,806/-. The Assessing Officer disallowed the expenses by following the decision of earlier years. The ld. DRP confirmed the action of Assessing Officer holding that the assessee has not established that expenses were incurred wholly and exclusively for the purpose of business. We have noted that the assessing office disallowed Pooja expenses of Rs. 8,41,279/- in AY 1998-99, on appeal before ld CIT(A) the deleted the said disallowances allowed vide order dated 31.03.2003. The Tribunal conformed the order of ld CIT(A) vide ITA No. 7123/M/2003 vide order dated 15.04.2008. The revenue filed appeal before Hon'ble Bombay High Court for challenging the order of the Tribunal in ITA No. 50 of 2010. However, the revenue has withdrawn the said appeal vide order dated 29th November 2010. The copy of the Hon'ble High Court order is available on record. Therefore, we are of the view that this ground of appeal is covered in favor of the asse....
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....e. 19. Considering the decision of Tribunal on similar ground of appeal in assessee's own case for preceding year when no variance is brought to our notice. Thus, respectfully following the same, we direct the Assessing Officer to delete the disallowance of Club Expenses. 20. Ground No. E relates to Transfer Pricing Adjustment for corporate guarantee. The ld. AR of the assessee submits that corporate guarantee is not international transaction and the amendment made in the Act is applicable from A.Y. 2012-13. In alternative submission, the ld. AR submits that the assessee given a corporate guarantee for Euro 2450000/- to ABN Ambro Bank in India for credit facility extended to AE of assessee in Germany. Though, the transaction was reported in Form 3CEB. The TPO held that a benefit was given to AE and Arms Length compensation was required to be received by assessee. The TPO estimated 6% of the loan amount and suggested adjustment of Rs. 67,13,980/-. However, ld. DRP restricted the corporate guarantee addition to 1.5% of the loan amount and accordingly, the Assessing Officer made adjustment of Rs. 16,78,495/-. The ld. AR submits that if adjustment required, it should be restricted ....
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....ay from a party, the relief, which he is entitled to where the tax is levied or collected without authority of law as held by Hon'ble Bombay High Court in Nirmala L Mehta [269 ITR 1 (Bom)] and Balmukand Acharya [310 ITR 310 (Bom)]. 24. On the ratio that appellate authority have jurisdiction to consider revised claim in the form of additional ground. The ld. AR relied on the decision of Hon'ble Bombay High Court in CIT vs. Pruthvi Broker & Shareholders Pvt. Ltd. [349 ITR 336 (Bom)] and Hon'ble Supreme Court in National Thermal Power Corporation [229 ITR 383(SC)]. On the point that no cost of acquisition of TDR, capital gain not taxable, the ld. AR of the assessee relied upon the decision of Hon'ble Bombay High Court in CIT vs. Sambhaji Nagar Co-operative Housing Society Ltd. [370 ITR 325]. 25. On the other hand, the ld. DR for the revenue submits that before Assessing Officer, the assessee claimed relief without filing revised return of income. In the computation of income, the assessee itself computed cost of acquisition and declared income in the form of Capital Gain. The ld. DR submits that in case, the additional claim of the assessee is admitted then the issue may be restored....
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....in A.Y. 2007-08 was restored to the file of Assessing Officer for examination of issue afresh by passing the following order: 25. We have considered the submission of both the parties and perused the material available on record. The Assessing Officer made addition by following the order of earlier Assessment Years and made addition of Rs. 2.91 Crore. The ld. DRP also followed their order for earlier years. We have noted that the co-ordinate bench of Tribunal in assessee's appeal for A.Y. 2005-06 in its order dated 15.03.2019 in ITA No. 2482/Mum/2015 set-aside the order to the file of Assessing Officer for examination of figures furnished by assessee for reconciliation of statements. Therefore, considering the order of Tribunal for A.Y. 2005-06, the ground of appeal is also restored to the file of Assessing Officer to examine the issue afresh and pass the order by following the order of Tribunal dated 15.03.2019. In the result, this ground of appeal is allowed for statistical purpose. 30. Considering the decision of Tribunal in assessee's own case on similar set of fact for A.Y. 2007-08, this ground of appeal is restored back to the file of Assessing Officer with similar directi....
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....ction 115JB. 37. In the result, appeal of the assessee is partly allowed. ITA No. 1007/Mum/2014 by assessee 38. Ground No.1 relates to transfer pricing adjustment for corporate guarantee. We have noted that this ground of appeal is identical to the ground no. E in appeal for A.Y. 2008-09, wherein we have directed the Assessing Officer/TPO to charge/add .5% of loan amount by following the decision of Hon'ble Bombay High Court in Everest Canto Cylinders Ltd. (supra). Thus, respectfully following the decision for A.Y. 2008-09, this ground of appeal is allowed with similar direction. 39. Ground No. B relates to Pooja Expenses of Rs. 1001460/-. We have noted that this ground of appeal is identical to the ground no. C in appeal for A.Y. 2008-09, which we have allowed. Thus, respectfully following the decision for A.Y. 2008-09, this ground of appeal is allowed with similar direction. 40. Ground No. C relates to issue of transfer of TDR. We have noted that this ground of appeal is identical to the ground no. F in appeal for A.Y. 2008-09, which we have restored to the file of Assessing Officer for adjudication. Therefore, respectfully following the order of A.Y. 2008-09, this ground ....