TaxTMI 
TaxTMI 
2020 (11) TMI 64
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....n of income was processed under section 143(1) of the Act accepting its returned income. Later on, the case was selected for scrutiny and notice u/s 143(2) of the Act dated 08.08.2013 was issued and duly served on the assessee. Subsequently, notice u/s 142(1) of the Act alongwith questionnaire and served on the assessee. In response, AR of the assessee attended and filed the relevant information as called for. After considering the submission of assessee, AO completed the assessment order u/s 143(3) of the Act after making the various disallowances/additions. 4. Aggrieved with the above order, assessee preferred an appeal before Ld CIT(A) and made before him a detail submission. Ld. CIT(A) after considering the submission of assessee, partly allowed the appeal of assessee. 5. Aggrieved with the above order, assessee and revenue are in appeal before us. 6. With regard to disallowance u/s 14A of the Act, Ld. AR appearing on behalf of the assessee brought to our notice para 8 of AO and para 6.2 of order of Ld. CIT(A) and submitted before us that this ground is squarely covered by the order of Coordinate Bench of Hon'ble ITAT in ITA 5594/Mum/2013 & 5476/Mum/2013 for AY 2010-11 in as....
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....he claim of the assessee. While making disallowance u/s 14A, the Assessing Officer has to record his objective satisfaction and give a clear cut finding as to how the disallowance computed by the Assessee is not correct. Without such exercise, no disallowance u/s 14A can be sustained. 2. Where the Assessee had owned / interest free funds more than the amount of investments made the presumption is that the investments were made out of such owned / interest free funds and not borrowed funds. In such a situation, no disallowance u/s 14A r.w.r. 8D (2) (ii) could be made. Ref: CIT v/s Reliance Utilities and Power Ltd. - [(2009) 313 ITR 340 (Bom)] and CIT v/s HDFC Bank Ltd. -[(2014) 366 ITR 0505 (Bom)] 3. Almost entire investments made by the Assessee are in subsidiary companies / group concerns with which the assessee had entered into joint venture / strategic alliance for strategic business purposes in order to promote the Assessee's business and also help the Assessee gain certain market share in the business so as to streamline the operations of the group as a whole. Neither the AO nor the CIT (A) have disputed these basic facts. Investments made in associates / subsidiaries ....
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....he disallowance is more than the actual administrative expenses. Therefore, we are directing AO to determine the total administrative expenses and also determine the total income earned by assessee including taxable and exempt income, apply the ratio of income to determine the administrative expenses and can be apportioned to exempt income. Simultaneously, calculate 0.5% of the investment as per rule 8D(2)(iii) of the rule, in applying the rules, he should consider only those investments which has actually earned dividend /exempt income. Then compare the both method of calculation and in order to apply provision of section 14A, he should consider the amount calculated above said two methods whichever is less. Accordingly, ground no. 1 raised by assessee is allowed for statistical purposes. 13. With regard to disallowance u/s 40(a)(ia) of the Act on account of non-deduction of TDS on credit card commission charged by bank on credit card transactions, Ld. AR appearing on behalf of the assessee brought to our notice para 7 of AO and para 6.3.2 of order of Ld. CIT(A) and submitted before us that this ground is squarely covered by the order of Coordinate Bench of Hon'ble ITAT in ITA 5....
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....allowance, is upheld. Accordingly these grounds stands dismissed. 15. On the other hand, Ld. DR fairly conceded that this ground is covered by the order of ITAT. 16. Considered the rival submission and material placed on record. We find from the records that the identical ground raised in the present appeal has already been decided by the Coordinate Bench of ITAT in ITA No. 5594/Mum/2013 & 5476/Mum/2013 for AY 2010-11 and ITA No. 1826 & 1435/Mum/2015 for AY 2011-12 in assessee's own case. 17. Therefore, respectfully following the above decision of Coordinate Bench of ITAT in assessee's own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Accordingly, ground no. 2 to 3 filed by the revenue are dismissed. 18. With regard to addition of amount forfeited by assessee on share warrants u/s 43(5) of the Act, Ld. AR appearing on behalf of the assessee brought to our notice para 6 of AO and para 6.4.4 to 6.4.5 of order of Ld. CIT(A) and submitted before us that this ground is squarely covered by the order of Coordinate Bench of Hon'ble ITAT in ITA 5594/Mum/2013 & 5476/Mum/2013 for AY 2010-11 in assessee's own case, which ....
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....n account of forfeiture has to be considered only as a capital receipt which are as under. a. Multan Electric upply Co. Ltd. - [(1945) 13 ITR 457 (Lah)] b. Asiatic Oxygen Ltd. V/s. Dy. CIT - [(1994) 49 ITD 355 (Cal)] c. Prism Cement Ltd. V/s. JCIT - [(2006) 101 ITD 103 (Mum)] d. DepakFertilisers and Petrochemicals Copn. Ltd. V/s. DCIT - [(2009) 116 ITD 372 (Mum)] e. DCIT V/s. Brijlaxmi Leasing & Finance Ltd. - [(2009) 118 ITD 546 (Ahd)] f. Graviss Hospitality Ltd. V/s. Dy. CIT - [(2015) 53 taxmann.com 63 (Mum - Trib.)] g. Sunita Gupta Share Borkers Limited vs. ACIT in ITA No.4188/Del/2010 vide order dated 7.12.2011. The above case laws amply support the proposition that amount received as a capital receipt toward financial instruments like warrants, share capital etc. cannot be treated as revenue receipts. Since the assessee company is not in the business of selling of shares. It has been held in the judicial pronouncements that in the case of any such forfeiture made, the same cannot be taxed as a revenue receipt if this amount has been transferred to the capital reserve account in the balance sheet. In the present set of facts it is observed that the various facts....
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.... appeal filed by the revenue is dismissed. 23. It is pertinent to mention here that this order is pronounced after a period of 90 days from the date of conclusion of the hearing. In this regard, we place reliance on the decision of co-ordinate bench of this Tribunal in the case of JSW Ltd in ITA Nos. 6264 & 6103/Mum/2018 dated 14.5.2020, wherein this issue has been addressed in detail allowing time to pronounce the order beyond 90 days from the date of conclusion of hearing by excluding the days for which the lockdown announced by the Government was in force. The relevant observations of this tribunal in the said binding precedent are as under:- 7. However, before we part with the matter, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 7th January 2020, this order thereon is being pronounced today on 14th day of May, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners:- (a) The Bench ma....
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.... 24th March, 2020, Hon'ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that "In case the limitation has expired after 15.03.2020 then the p....