TaxTMI 
TaxTMI 
2019 (2) TMI 1888
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....ing in the assessment order dated 27.02.2015 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning assessment year 2012-13. 2. The assessee has also filed cross object ion in the Revenue's appeal as captioned above. ITA No. 1843/Ahd/2016 (Revenue's appeal) 3. The grounds of appeal raised by the Revenue reads as under: - "1. The Ld. CIT(A) has erred in law and on facts in restricting the disallowance u/s. 14A to Rs. 2,01,860/- as against Rs. 40,43,049/- on account of which the book profit u/s.115JB has also been restricted to that extent without properly appreciating the facts of the case and the material brought on record." 4. At the time of hearing, it was submitted by th....
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.... 8D(2) (ii) and remaining Rs. 3,65,416/- under Rule 8D(2) (i ii ) of the Income Tax Rules. The CIT(A) in first appeal has restricted the disallowance to the extent of exempt income amounting to Rs. 5,66,276/ - as against suo moto disallowance of Rs. 3,65,416/- by the assessee. The learned AR in this context pointed out that reference to the financial statement that the own funds held by the assessee are nearly 100 times of the corresponding investment and therefore, in view of the decision of the Hon'ble Gujarat High Court in India Gelatine & Chemicals 376 ITR 553 (Guj), no disallowance towards proportionate interest is justified. We are in total agreement with the plea on behalf of the assessee in view of the long line of judicial preceden....
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....on under s.32(1)(iia) of the Act. For this proposition, the learned AR for the assessee referred to the decision of Hon'ble Gujarat High Court in CIT vs. Nathubhai H Patel (2006) 154 TAXMAN 117 (Guj). We find force in the plea of the assessee noted above. The assessee cannot be denied additional depreciation in the facts narrated above. The aforesaid issue is thus sett led in favour of the assessee. 11. We shall now turn to the additional ground raised by the assessee in its cross objection which reads as under: "On the facts and the circumstances of the case and in law, the interest subsidy of Rs. 2,16,45,161 received by the assessee under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute industries during the abov....
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....s apart, raising of additional ground would only enable the authority concern to correctly assess the tax liability of the assessee. Similar view has been expressed by the co-ordinate bench in the case of ITO vs. Jasjit Singh (Del) in cross objection Nos. 138 to 142/Del/2014 interim order dated 23.09.2014. We thus do not see any impediment in entertaining the additional grounds. The relevant facts are available on record. 21.6 In so far as the merits of the claim made in additional ground is concerned, we observe that where the AO has readjusted the quantum of depreciation in the subsequent assessment year, the assessee is within its legitimate rights to be granted depreciation in AY 2009-10 as per the figures worked by the AO hims....
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....t of the scheme was to enhance sustainable growth in value chain for overall growth of textile industry. Pursuant to TUFS, certain subsidy benefits by way of interest on reimbursement of loans taken from authorized agencies for investment in plant and machinery for spinning units and other machineries in textile industry was availed by textile sector. 11.3 In this background, it was contended on behalf of the assessee that the assessee herein as obtained subsidy by way of reimbursement of interest under the scheme. The assessee has treated the aforesaid interest reimbursement subsidy mistakenly as revenue receipt in the P&L account and disclosed the same by way of net off from interest expenses. The taxable income was thus stated to be o....
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....the interest subsidy is required to be treated as capital receipt of non-taxable nature having regard to the propositions laid down in the judicial proceedings noted above. 13. The aforesaid view is also for tified by the legislature in view of amendment as per sub clause (xviii) to Section 2(24) of the IT Act as inserted by the Finance Act, 2015 which reads as under: "[(xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assessee [other than,- (a) the subsidy or grant or reimbursement which is taken into account for d....