TaxTMI 
TaxTMI 
2020 (2) TMI 245
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....following adjustments:- a) Provision for doubtful debt and advances 1,15,89,656/- b) Foreign exchange fluctuation loss 3,39, 41,455/- c) Provision for diminution in value of investments 5,25,600/- 4. That the learned CIT(A)-II has erred in not allowing claim of Rs. 1,00,51,000/- in respect of expenses on the abandoned project. 5. That the learned CIT(A)-II has erred in not allowing the claim of Rs. 3,19,356/- made during the course of proceedings being the amount of employee's contributing towards Provident Fund having been paid before the due date of filing of return. 6. That the learned CIT(A)-II has erred in confirming the charging of interest u/s 234B of the Income Tax Act. 7. The Appellant craves leave for permission to add, amend or alter any ground of appeal at the time of hearing. 3. Apart from the above grounds of appeal, the following additional grounds have been raised by the assessee. Additional grounds of appeal The appellant humbly submits that the following additional grounds of appeal which is purely of legal nature may kindly be admitted. 1. That the authorities below have erred in ....
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....the assessee had used its own / interest free funds for the said investment. In view of this, we hold that no interest expenditure disallowance u/s 14A of the Act read with Rule 8D(2)(ii) of the I.T. rules is attracted on this issue. 6. So far as the disallowance of administrative expenditure u/s 14A of the Act read with Rule 8D(2)(iii) is concerned, the Ld. counsel for the assessee has relied upon the decisions of the Hon'ble Delhi High Court in the case of 'Joint Investments Private Ltd vs CIT' ITA No.117/2015 dated 25.2.2015 and further in the case of 'ACB India Limited vs ACIT' ITA No. 615/2014 dated 24.3.2015 wherein it is held that for computing the average value u/s 14A of the Act read with rule 8D(2)(iii), only the investment yielding non-taxable income have to be considered and not the entire investment. In view of this, the Assessing Officer is directed accordingly to consider only the investments yielding tax exempt income for computation of disallowance under Rule 8D(2)(iii) of the I.T. Rules. 7. Ground No.2: Vide ground No.2, the assessee has agitated the confirmation of 10% of the disallowance out of deduction claimed u/s 80IC of the Act on the ground of ....
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....t by applying provisions of sub section 8 & 10 to section 801 A. In this regard " it is submitted that no such benefits have been derived by Talhliwal Unit. Moreover the ^provisions of sub section 8 & 10 to section 801A are not applicable in these circumstances as these provisions refer to transfer of goods and service. While in the 'instant case there is no such transfer of any goods or service and no business has been transacted between the eligible Unit and other Unit of the assessee company which resulted in excess profit to the eligible unit. Unless until any specific benefit is pointed out and expressed in monetary terms, no addition can be made on the basis of conjectures and surmises." I have duly considered the reply of the assessee. It is observed that the exempted unit is using all the services, reputation, goodwill, experience, depots facilities, sharing of staff for sales and distribution, network of established non-exempted units etc. Therefore, the provisions of sub-section 8 & 10 of Section 80IA r.w.s. 14A of Income Tax Act, 1961 are applicable in the case of the assessee. The Assessing Officer during the assessment proceedings of assessment year 2006-0....
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....amount of Rs. 16,05,289/- taken @ 10% of the amount claimed to be exempted (Rs. 1,60,52,899/-) u/s 80IC will be added in the business income of the assessee for taxation purposes. 6.2 The Ld. CIT(A) has deleted the addition based on the decision taken in the case of the assessee for the A.Y. 2006-07 in the Appeal No. 03/ROT/IT/CIT(A)-l/LDH/2016-17 dated 26.10.2016 by holding as under:- "I have considered the facts of the case, the basis of the additions made by the Assessing Officer and the arguments of the AR. The AO has reworked the claim under section80IC between the Tahliwal unit and the Phillaur unit on estimated basis without bringing any evidence on record to show whether there has been any transaction between the two units. The appellant has made the allocation of all common expenses on turnover basis and the AO has failed to mention any expense which has not been considered in the said exercise. Thus, the reducing of the eligible profits to the extent of 10% by the AO without any sound basis is unwarranted and is hereby ordered to be deleted. Further, the basic process is carried out by the appellant is the same whether the production is done for itsel....
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....provisions of sect ion 80IA(8) & (10) of the Act .The Assessing Of f icer reduced the same from the deduct ion claimed u/s 80IC of the Act amounting to Rs. 12,16,332/- 30. Before the Ld.CIT(Appeals) the assessee contended that it had specified all conditions laid down u/s 80IC(2) (a) ( i i ) of the Act and had right ly claimed the deduct ion, while the Assessing Of f icer had wrongly interpreted the provisions of sub-sect ion (8) & (10) of sect ion 80IA of the Act since these sub-sect ions referred to transfer of goods and services to any other business or to any other person while in the case of the assessee there was no transfer of goods or service to any other business or to any other person. I t was pointed out that the assessee had already al located the common expenses incurred to various units on the basis of turnover and, therefore, the denial of deduct ion to the extent of 10% of the profits on the basis of some notional expenses such as knowhow, goodwill , trade name, etc. was highly unjustified. 31. The Ld.CIT(Appeals) af ter considering assessee's submissions held the deduct ion of eligible profits by the Assessing Officer as unwarranted deleting the s....
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....issed. 6.4 As the matter stands adjudicated, following the ratio laid down which is squarely applicable to the appeals before us, the grounds raised by the Revenue on this issue are hereby dismissed." Respectfully following the above referred to decision, Ground No.2 is accordingly allowed in favour of the assessee and the disallowance / reduction made by the Assessing Officer on this issue is ordered to be deleted. 9. Ground No.3: Vide ground No.3, the assessee has agitated the action of the CIT(A) in computing book profits u/s 115JB by making the following additions:- a) Provision for doubtful debt and advances 1,15,89,656/- b) Foreign exchange fluctuation loss 3,39, 41,455/- c) Provision for diminution in value of investments 5,25,600/- (a) Provision for doubtful debt and advances : The Ld. Counsel for the assessee has submitted that as per the instructions of his client, he does not press this issue. The disallowance of adjustment made on this issue is accordingly confirmed. (b) Foreign exchange fluctuation loss : The Ld. Counsel for the assessee has submitted that this claim was made in the original return filed under normal prov....
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....AT. In this respect, the Ld. Counsel has relied upon the decision of the Hon'ble Delhi High Court in the case of 'CIT vs Jai Parabolic Springs Ltd.' (2008) 306 ITR 42 (Delhi) and has submitted that the Hon'ble Delhi High Court in this case has held that there is no prohibition of powers of the Tribunal to entertain an additional ground which was not raised before the lower authorities. 11. The Ld. DR, on the other hand, has relied on the findings of the lower authorities. 12. We have heard the rival contentions of the Ld. Authorized Representatives of both the parties. We find that the case laws cited by the Ld. counsel for the assessee are applicable to the issue raised before us. Even the Hon'ble Bombay High Court in the case of "CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd." (2012) 349 ITR 336 (Bom.) has observed that the assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional clams before them. The appellate authorities have jurisdiction to deal not merely with additional grounds, which became available on account of change of circumstances or law, but with additional gro....
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....o section 43B of the Income-tax Act, 1961, omitted by the Finance Act, 2003, with effect from April 1, 2004, was clarificatory in nature and was to operate retrospectively. Thus, the assessee, for the assessment year 2003-04, was entitled to deduction in respect of the employer's and employees' contributions to the employees' State Insurance and provident fund as the contributions had been deposited prior to the filing of the return under section 139(1)." So respectfully following the ratio laid down by the Hon'ble Jurisdictional High Court in the aforesaid referred to case, the impugned addition made by the AO and sustained by the Ld. CIT(A) is deleted." Since no contrary decision on the above proposition has been cited before us, hence, respectfully following the above decision of the Coordinate Bench, the impugned disallowance is deleted. Ground No. 5 stands allowed. 16. Ground No.6: This ground is consequential in nature and does not require any specific adjudication. 17. Now, we proceed to adjudicate the additional grounds of appeal raised by the assessee. 18. Additional ground No.1: The assessee through this additional ground has claime....