TaxTMI 
TaxTMI 
2016 (2) TMI 1278
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....6/-. Subsequently, the assessee has filed revised E-return of income on 31.10.2007 declaring total income of Rs. 338,90,27,722/-. The return of income was processed under the provisions of Sec. 143(1) of the Act. Subsequently case was selected for scrutiny under CASS and notice u/s. 143(2) was issued. In compliance to the notice, the ld. Authorised Representative of the assessee appeared on various dates and filed information. The ld. Assessing Officer found that the assessee is having international transactions with Associated Enterprise and referred to the Transfer Pricing Officer (TPO). The ld.TPO passed an order u/s.92CA(3) dated 24.07.2009 and the ld. Assessing Officer finalized Draft assessment order and served on assessee. The assessee objected to the additions of Assessing Officer and filed objections before DRP and after considering the submissions and objection DRP order dated 28.09.2010 and as the directions of DRP Assessing Officer completed assessment. 4. The first ground raised by the assessee with regard to disallowance of additional depreciation claimed u/s.32(1)(iia) of the Act Rs. 5,23,08,553/- pertaining to assessment year 2005-06. 4.1 Before the Assessing Offi....
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....ion of Balaji Tempo Ltd. v. CIT [1992] 196 ITR 188 (SC) and also Mumbai Tribunal decision of Geetanjali Trading & Investments v. ITO [IT Appeal Nos.5428/Mum/2007 and 1737/Mum/2009] and argued vehemently that the provisions are very clear and the issue is directly covered by the Delhi Tribunal decision in Dy. CIT v. Cosmos Films Ltd. 13 ITR (Trib) 340 (Delhi) 4.3 Contra, the ld. Departmental Representative relied on the findings of the lower authorities and DRP and objected to the submissions that no additional depreciation can be carried forwarded. 4.4 We heard the rival submissions, perused the material on record and judicial decisions cited. The ld. Authorised Representative drew attention to the provisions u/s.32(1)(iia) of the Act for claim of additional depreciation and also provisions of law on carry forward. Since the asset was purchased during the second half of financial year 2004-05 and only 50% of depreciation was allowed and pleaded for carry forward of balance 50% to be claimed in the assessment year 2006-07. On perusal of the judicial decisions and objections of Finance Minister speech Additional depreciation has to be allowed only in the case of new plant and machi....
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....the Act. Therefore, we are of the opinion that the Assessing Officer has examined and correctly disallowed and we uphold the findings of the Assessing Officer and dismiss the assessee ground. 6. The third ground raised by the assessee with regard to disallowance of additional depreciation on the leased assets (windmill) of Rs. 5,36,01,076/-. 6.1 The assessee during the year has acquired windmills of Rs. 33,73,59,931/- and leased out and claimed additional depreciation. As per the provisions of Sec.32(1)(iia) additional depreciation shall be available only to the assets which is being put into use by the assessee in the business of manufacture or production of any article or things. The assessee could not substantive the claim and in the manufacture or production of commercial vehicles, industrial and marine engines, and eligible to claim additional depreciation were windmills does not fall under any categories specified in the provisions. But the ld. Authorised Representative relied on the decision of Jurisdictional High Court in the case of CIT v. VTM Ltd. T.C.(A) No.881 of 2009, where it is held that additional depreciation on windmills cannot be denied to the assessee and wind....
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....ed to the arguments of the Authorised Representative. 6.4 We heard the rival submissions and perused the material on record and judicial decisions cited. Prima facie the assessee is in the business of manufacture of commercial vehicles and engines and additional depreciation is claimed on leased asset of windmills. During the previous year the assessee has purchased windmills leased out to others and claimed additional depreciation on such leased assets. On perusal of provisions u/s.32(1)(iia) of the Act and the decisions relied by the assessee which are in leasing business and cannot be brought into category of manufacture of commercial vehicles. The provisions are very clear on this issue. The claim of additional depreciation is in violation of provisions u/s.32 of the Act were depreciation is allowed. We are of the opinion that the decisions relied by the assessee are not directly on the issue and distinguishable and additional depreciation on leased asset does not fit into the provisions of the Act and we uphold the findings and order of the Assessing Officer on this ground and allow the ground in favour of the Revenue. 7. The fourth ground raised by the assessee with regard ....
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....laimed exemption u/sec. 10(34) of the Act Rs. 12,28,65,534/- and the assessee has earned income on redemption of equity oriented mutual fund of Rs. 7,47,27,668/- and claimed exemption u/s. 10(38) of the Act. The assessee has not disallowed expenditure incurred on earning such exempted income and show cause notice was issued. In response to show cause notice, the assessee submitted that provisions of Section 14A sub-sections (2) and (3) have been enacted in the Finance Act, 2006 and the provisions shall apply for assessment year 2007-08. Further, Rule 8D has been made effective from 24.03.2008 and applicable from assessment year 2008-09. The ld. Authorised Representative submitted that assessee has not incurred any expenditure in relation to earning exempt income the ld. Assessing Officer relied on amendment Rule 8D and CBDT circular and Mumbai Tribunal decision calculated disallowance u/s.14A r.w.r. 8D of the Act and applying three limbs under Rule 8D(2) and determined disallowance aggregating to Rs. 1,24,76,771/- and DRP observed that judicial decisions relied upon by the assessee are not been finally settled and appeals and cross appeals are pending in High Courts and Apex Court ....
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.... the Assessing Officer found that the assessee claimed wealth tax paid on the value of residential buildings and cars being the part of business assets of the company. Under the provisions of u/s.40(iia) of the Act any sum paid on account of Wealth Tax is not deductible. After perusing the provisions and the submissions of the ld. Authorised Representative, the ld. Assessing Officer disallowed Wealth Tax paid. It was mentioned that by mistake Wealth Tax paid was considered as Rs. 15,75,000/- in the DRP order and is mistake apparent on record and petition under Sec. 154 of the act filed. 9.2 On appeal before Tribunal, the ld. Authorised Representative reiterated his submissions and relied on the grounds of appeal and argued that Wealth Tax paid on business assets should be allowed. The arguments of the ld. Authorised Representative are not convincing and the provisions are very clear u/s.40(iia) as any sum paid on account of Wealth Tax is not deductable. Considering the apparent facts, we confirm the disallowance of the Assessing Officer and dismiss the assessee ground. 10. The seventh ground raised by the assessee with regard to disallowance of u/s.92C of the Act Rs. 2,62,47,376/....
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....practice in automobile industry. Sale of spare parts and vehicles are closely linked.' The ld. Assessing Officer found similar explanations were considered in TPO proceedings and findings were confirmed by the DRP. The assessee has entered into the international transactions at a price determined and charged to the Associated Enterprise is not reliable as considered by TPO and calculated the difference of price received from Associated Enterprise and price receivable for identical products sold to non Associated Enterprise and made adjustment of international transactions by addition of Rs. 2,62,47,376/-. Aggrieved by the order of the Assessing Officer, the assessee assailed an appeal before the Tribunal. 10.2 Before us, the ld. Authorised Representative reiterated his submissions made before the Assessing Officer, TPO and DRP. The ld.TPO passed order without considering revised working of Arms Length Price (ALP) submitted by the assessee within time limit under the Income Tax Act. Further, the Assessing Officer considered the submissions and objections raised by the assessee against the TPO order and assessee alleged that the TPO and the DRP has not considered comparables wi....
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....lar, revised working as per domestic invoice etc). The assessee filed paper book in the Transfer Pricing proceedings with complete details including analysis on sample revised comparables. The ld. TPO overlooked the provisions and evidence filed and relied only on original form 3CEB. The action of the TPO is not acceptable as per the facts and provisions of law and ld. Authorised Representative supported arguments with the decision of Jurisdictional Bench in Delphi TVS Diesel Systems Ltd. v. Asstt. CIT in ITA No.2163/Mds/2010 (Chennai) and prayed for allowing the ground. 10.3 On the other hand, the ld. Departmental Representative relied on the order of lower authorities and argued that time limit for filing revised form 3CEB has expired. The TPO has rightly considered original form 3CEB and prayed for dismissal of appeal. 10.4 We heard rival submissions, perused the material on record and judicial decisions cited. The argument of the ld. Authorised Representative that the TPO erred in not considering the revised working of Arms Length Price (ALP) submitted by the assessee on 06.01.2009 very much before passing of order by TPO on 24.07.2009. The TPO has distinguished the time limi....
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....6/- pertaining to property tax, bonus, gratuity, leave encashment and provident fund were disallowed in earlier assessment years u/s.43B of the Act. The ld. Authorised Representative explained that all the assets and liabilities of the units were sold by adjusting the liabilities against consideration and set off of liability against receivables which does not bar the assessee from claiming deduction u/s.43B of the Act as the liability including provisions have been set off and disallowed in earlier years. The set off of such liability with the slump sale consideration indirectly considered as payment, therefore deduction be allowed. The submissions of the ld. Authorised Representative are rejected and the ld., Assessing Officer stated that the assessee has sold the unit as slump sale and covers all the liabilities and assets and there is no residual available with the assessee and relied on the provisions and explanations of Sec. 43B of the Act and concluded that the submissions of the assessee are not as per law and deeming provisions of netting the liabilities does not give right of payment and disallowed the claim. The DRP also concurred with the findings of the Assessing Offic....
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....ssee with regard to disallowance of depreciation on UPS claimed Rs. 5,56,020/-. 12.1 The assessee has purchased UPS system of Rs. 14,00,004/- and claimed depreciation @ 80% treating UPS as energy saving device. The Authorised Representative submitted that UPS is a energy saving device which control the electronic voltage and treated as a block of asset and UPS is part of computer. The contentions of the assessee as energy saving device and integral part of computer were not accepted by the Assessing Officer and the Assessing Officer relied on the decision of Delhi Tribunal of Nestle India Ltd. v. Dy. CIT [2009] 27 SOT 9 (URO) and where it was held that UPS is not an integral part of computer and it is a general plant and machinery. The DRP also confirmed the addition of the Assessing Officer in respect of disallowance of depreciation. Aggrieved by the order, the assessee filed an appeal before the Tribunal. 12.2 Before the Tribunal, the ld. Authorised Representative substantiated his submissions made before the Assessing Officer and DRP and submitted that UPS is a integral part of the computer and energy saving device and eligible for higher rate of depreciation and supported his....
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.... submitted that sale of securities are covered under transaction tax and contract notes are inclusive of securities transaction tax on sale or purchase of securities. During the year the assessee has sold long term securities and claimed exemption u/s.10(38). The fact that the securities transaction tax is automatic in stock exchange transactions. The assessee has considered profit after deducting securities transaction tax (STT) and reflected in the Books of Account. The assessee has not claimed deduction as a business expenditure as the income on sale of securities offered under capital gains in computation of income. Considering the circumstances, we direct the Assessing Officer to verify the computation of income and delete the addition of Securities Transaction Tax after verification. 14. The next ground raised by the assessee with regard to disallowance of weighed deduction on a expenditure incurred on Department of Scientific and Industrial Research u/s. 35(2AB) of the Act for Rs. 49,47,89,660/- 14.1 The assessee has incurred R & D expenditure with the Department of Scientific and Industrial Research. As per provisions of Sec. 35(2AB) of the Act expenditure incurred on R &....