TaxTMI 
TaxTMI 
2017 (9) TMI 1888
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....s Tax Loan', as not a remission or cessation of liability u/s.41(1)?" 4. Briefly stated relevant facts are that the assessee is a company engaged in the manufacture of various automobile components. Assessee filed the e-return of income on 15-11-2007 declaring total loss of Rs. 6,81,18,176/-. AO noticed that an amount of Rs. 91,27,101/-, being discount on early repayment of deferred sales tax loan, was treated as capital in nature. Further, the AO noticed that the same issue arose in earlier A.Yrs. 2004-05, 2005-06 and 2006-07 wherein, the AO held the said discount does not constitutes capital receipt and therefore, liable to be charged to tax as deemed profits and gains of the business within the provisions of section Aurangabad Electricals Ltd., 41(1) of the Act, 1961. This addition was subsequently confirmed by the CIT(A) for all those assessment years. Considering the issue being similar in A.Y. 2007-08 also, the AO treated the amount of Rs. 91,27,101/- as income from business and profession of the assessee for the year under consideration too. 5. Before us, on the said issue, Ld. Counsel for the assessee submitted the assessee got the benefit by the way of discount f....
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.... Bank reported in 383 ITR 529. Bringing our attention to the pattern of investments, Ld. Counsel for the assessee demonstrated that the investment is done in the sister concerns (OMR Bagla Automotive Systems India Limited) and the same constitutes a strategic investment. Ld. Counsel is of the opinion that such investments is outside the scope of section 14A and no disallowance on account of interest payment on such investment is unwarranted. He also submitted that certain investments never yielded exempt income in the year under consideration and therefore, such investment should be excluded for the calculations of disallowance u/s.14A of the Act. Without prejudice, he also submitted that the disallowance if any in the said scenario, has to be restricted to the extent of dividend received during the year by the assessee. For this proposition, he relied on various binding decisions on the subject. 10. On hearing both the sides on this issue, we find the above referred ratios on various decisions/judgments are latest in time, subsequent to the passing of orders by the Revenue authorities. In our considered opinion, it is in the interest of justice for both the parties that the iss....
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....entical to the grounds of appeal No.1 and 2 raised by the assessee in A.Y. 2007-08. We have already adjudicated the above issue in A.Y. 2007-08 and remanded the issue back to the file of AO for fresh adjudication in view of binding judgments of Hon'ble High Court and the decisions of the Tribunal. We, therefore, remand the issue to the file of AO with similar directions as given in the order relevant to A.Y. 2007-08. 18. In the result, the appeal of the assessee is allowed for statistical purposes. We shall now take up the appeal of the assessee for A.Y. 2009-10. In this A.Y. 2009-10, there is no appeal by the Revenue. ITA No.1240/PUN/2014 (By Assessee - A.Y. 2009-10) : 19. The issue raised vide Ground No. 1 by the Assessee is identical to the grounds of appeal No.1 and 2 raised by the assessee in A.Y. 2007-08 and it relates to disallowance u/s.14A r.w. Rule 8D(2). We have already adjudicated the above issue in A.Y. 2007-08 and remanded the issue back to the file of AO for fresh adjudication in view of binding judgments of Hon'ble High Court and the decisions of the Tribunal. We, therefore, remand the issue to the file of AO with similar directions as given in t....
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....he assessee in A.Y. 2007-08. We have already adjudicated the issue in A.Y. 2007-08 and remanded the issue back to the file of AO for fresh adjudication in view of binding judgments of Hon'ble High Court and the decisions of the Tribunal. We, therefore, remand the issue to the file of AO with similar directions as given in the order relevant to A.Y. 2007-08. 26. Ground No.2 raised by the assessee relates to disallowance of carbon credit expenses amounting to Rs. 5,00,000/-. 27. On this issue, Ld. Counsel for the assessee submitted that assessee sold the windmill for a consideration. It is a part of the agreement that certain expenditure amounting to Rs. 5 lakhs was required to be incurred by the assessee - the seller and it constitutes a contractual obligation. The said amount was incurred by the assessee and claimed as an allowable expenditure. Therefore, the same constitutes an allowable expenditure while computing the capital gains. However, the said claim was not allowed by the Revenue authorities. 28. Before us, Ld. Counsel for the assessee submitted that the Tribunal may consider reducing the sale price of the windmill to the extent of said Rs. 5 lakhs as the liab....
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....mple - we have now statistically allowed the issue relating to disallowance u/s.14A r.w. Rule 8D of the I.T. Rules, 1962. There are certain other additions which are remanded for fresh adjudication by the AO. In a way, this ground becomes consequential to the findings of the AO in the remand proceedings. Therefore, we are of the opinion that, for the time being, this ground should be dismissed as infructuous. However, we direct the AO to consider the claim of the assessee, in case of positive profits, if any, at the end of the remand proceedings. AO shall grant reasonable opportunity of being heard to the assessee. 34. Ground No.4 by the assessee being general in nature is dismissed. 35. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. We shall now take up the cross appeals for A.Y. 2011-12 ITA No.479/PUN/2015 (By Revenue - A.Y. 2011-12) : 36. Revenue raised the following grounds : "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting disallowance of IPO expenses of Rs. 37,29,058/ - by ignoring the decisions in case of Mascon Technical Services Ltd. vs CIT (2013) 35....
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....onstitutes capital in nature. Aggrieved with the relief granted by the CIT(A) the Revenue is in appeal before us. 38. On hearing both the sides on this issue, we are of the view that the decision of the CIT(A) should be confirmed since the CIT(A) has followed the decision of jurisdictional High Court's judgment. We therefore affirm the order of CIT(A). Accordingly, the ground raised by the Revenue on this issue stands dismissed. 39. With regard to Ground of appeal Nos. 3 to 5 by the Revenue relating to disallowance of claim u/s.80IA(4) of the Act it is the argument of the Ld. Counsel for the assessee that the AO has notionally brought forward the losses of earlier years which was already set off against the profits of the earlier years by invoking the provisions of section 80IA(5) of the Act. In this regard, Ld. Counsel for the submitted that such treatment is not appreciated by the Tribunal in the case of Serum International Ltd. in ITA Nos. 290 to 292/PN/2010 order dated 28-09-2011. He also mentioned that the said decision of the Tribunal is in tune with the subsequent circular issued by the CBDT vide Circular No.01/2016 dated 01-05-2016. Considering the same, the CIT(A....