2020 (12) TMI 353

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....'s appeal) (1) That Ld CIT (A) has erred both on facts and in law in framing the assessment at an income of Rs. 549,21,38,834/- against the returned income of Rs. 477,61,36,190/- (2) That the Ld. CIT (A) has erred in considering that the expenditure of Rs. 15,88,00,000/- incurred by the appellant board on the schemes and projects are outside its aims and objectives and also capital in nature. (3) ) That Ld CIT (A) has no merits in finding that expenditure of Rs. 15,88,00,000/- on schemes and projects is of capital nature as neither appellant board has created any asset nor any enduring benefit or wealth accretion has been derived by the appellant board rather such grants , sops, bounties are foregone forever thus ....

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....n of delay along with the affidavit thereby explaining the reason for delay. The Ld. DR did not object to the same. It is observed that the reason explained for delay is genuine. Hence, delay in filing the present appeal by the assessee is condoned. 4. Firstly we are taking up the Appeal filed by the assessee. The assessee is a statutory body constituted by an Act of Parliament, is engaged in providing financial assistance for the development of Oil Industry. The return showing income of Rs. 477,36,190/- was filed on 29.09.2011 by the assessee. During the year, the Assessing Officer treated the expenditure on direct operations as appropriation of profits and held that the same cannot be held as laid out wholly and exclusively for the pur....

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....21/Del/2014 order dated 21.08.2017 wherein the Tribunal remanded this issue to the file of the Assessing Officer. 7. The Ld. DR relied upon the assessment order and the order of the CIT(A). 8. We have heard both the parties and perused all the relevant material available on record. From the perusal of records it can be seen that the assessee at this juncture has filed certain documents under Rule 46A to support justification of debit of expenses being made in the normal course of business respecting applicable Accounting Standards. In similar situation, the Tribunal in A.Y. 2009-10 and 2010-11 held as under: "13. AO disallowed expenditure of Rs. 5,94,00,000/- on the ground that the Assessee Board has failed to demonstrate tha....

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....icer to decide the issue after examining the documents relied upon by the assessee board under Rule 46A of the Income Tax Rules, 1962. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, Ground Nos. 2 to 4 are partly allowed for statistical purpose. As regards to Ground No. 5 relating to addition of Rs. 61,644 towards non credit of TDS, the same is also required to be verified by the Assessing Officer as the additional documents are filed towards the same by the Assessee during the course of hearing. Therefore, we direct the Assessing Officer to verify the documents and if the evidence produced is justified then the TDS credit should be given to the assessee. Ground No. 5 is partly....

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....ear for earning such income and moreover no dividend has been credited in the income statement of the year. The Ld. AR further submitted that during the assessment year, the assessee Board had not earned any exempt income and accordingly provisions of Section 14A have no application. The Ld. AR relied upon the order of the CIT(A). The Ld. AR further relied upon the following decisions: i) Cheminvest Ltd. v. CIT [2015] 378 ITR 33 (Delhi HC) ii) CIT v. Walfort Share and Stock Brokers (P.) Ltd. [2010] 326 ITR 1 iii) Maxopp Investments Ltd. v. CIT [2018] 402 ITR 640 (SC) 11. We have heard both the parties and perused all the relevant material available on record. In order to attract the applicability of section 14A....

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....cited by the CIT(A) in his order i.e. Woodward Governor India Pvt. Ltd. [312 ITR 254(SC)], Realest Builders & Services Ltd. [170 Taxmann 218 (SC)] and SAS Hotels & Enterprises Ltd.(Appeal no. 1030 of 2010) (Madras High Court). Hence the CIT(A) correctly deleted the disallowance of expenses amounting to Rs. 14,95,00,000/- made by the Assessing Officer. 14. We have heard both the parties and perused all the relevant material available on record. The CIT(A) has given a categorical finding that royalty payment is an additional payment and the same was not disputed by the Revenue. Once the royalty expenses of Rs. 14.95 crores have been crystallized in the present Assessment Year, the genuineness of the same is not questioned by the Revenue au....