TaxTMI 
TaxTMI 
2020 (12) TMI 467
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....wings grounds of appeal: "1. The learned AO erred (learned CIT(A) erred in confirming) in treating Rs. 25,16,273/- as business income instead of short term capital gain as claimed by assessee. 2. The learned AO erred (learned CIT(A) in confirming) in disallowing expenses of Rs. 2,52,000/- incurred on Repair of Existing Toilet Block treating as Capital Expenditure and merely allowing depreciation. 2.1 The learned AO erred (learned CIT(A) in confirming) failed to appreciate the fact that the repair of existing toilet block was done merely to preserve and maintain an existing asset. 3. The appellant craves its right to add to or alter the Grounds of appeal at any time before or during the course of hearing of the case." 4. Ground No.1 in the assessee's appeal pertains to treating short term capital gain in respect of shares of Rs. 25,16,273/- as business income. 5. The Assessing Officer has relied on earlier assessment orders in which short term capital gain has been treated as 'business income'. 6. That before the Ld. CIT(Appeals), the assessee placed reliance on the decision of the Hon'ble Bombay High Court in the case of Gopal Purohit (2010) (Bombay) 34 DTR 52 wherein th....
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....On hearing both the parties and considering the facts, we find that the need of honouring the entries in the books of account. No case is made out for disturbing the claim of the assessee. This is the case where only 55 transactions are involved and separate account for investment is maintained. Therefore, there is a case for applying the Apex Court's judgment in the case of Gopal Purohit (supra.) Therefore, in our view, the order of the CIT(A) is required to be reversed on this issue and in favour of the assessee. Accordingly, the ground raised by the assessee is allowed." 10. The Ld. AR also submitted that the case of Gopal Purohit (supra.) has attained finality in favour of the assessee and this issue has been decided by the Hon'ble Apex Court also to which submissions, the Ld. DR conceded. That when the Ld. DR submitted the facts and circumstances are absolutely identical in this assessment year also, following the decision of Tribunal in assessee's own case for assessment year 2010-11 which was based on the Hon'ble Bombay High Court decision of Gopal Purohit (supra.), we allow this ground of appeal. Thus, Ground No.1 raised in appeal by the assessee is allowed. 11. With reg....
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....e is no scope for such implications when construing a taxing statute. Even though, "cess" may be collected as a part of income tax, that does not render such "cess" either rate or tax, which cannot be deducted in terms of the provisions in Section 40(a)(ii) of the Act. The mode of collection is really not determinative in such matter. Therefore, it was held that amount "cess" paid is deductable from total income of the assessee. 14. The Pune Bench of the Tribunal in the case of DCIT Vs. Bajaj Allianz General Insurance Company Limited, ITA Nos.1111 & 1112/PUN/2017 for the assessment years 2013-14 & 2014-15 dated 25.07.2019 on the issue has held and observed as follows: "13. On hearing both the parties on this issue, we find that this issue is covered one by the decision of the Hon'ble High Court of Judicature for Rajasthan Bench at Jaipur in the case of Chambal Fertilisers and Chemicals Ltd. Vs. JCIT, Range -2, Kota wherein substantial question of law No.3 is relevant in this regard (Para 3) and the same was adjudicated by the Hon'ble High Court at Para 12 of the judgment. The Hon'ble High Court on this issue held the said question No.3 is answered in favour of the assessee. For....
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....appreciating that the Hon'ble Bombay High Court in the case of the CIT-10 Vs M/s Galaxy Surfactants Ltd. has clearly upheld the AO's mode of computation of deduction u/s 80IA(5)while delineating the difference between the computation of deduction u/s 10B vis-a-vis computations u/s 80IA(5) and 80I(6)?" 3. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is not justified in holding that the assessee is entitled to claim deduction of its income of the eligible unit u/s 80IA(5) without adjusting the notional brought forward losses of earlier years, ignoring Hon'ble ITAT decision in the case of Pidilite Industries and instead, relying on the decision of Madras High Court in the case of Velayudhaswamy Spinning Mills Pvt. Ltd. which has been distinguished by the Hon'ble ITAT itself (Murnbai Bench) in its decision in the case of Pidilite Industries?" 4. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is not justified in holding that the assessee is entitled to claim deduction of its income of the eligible unit u/s 80IA(5) without adjusting the notional brought forward losses of earlier years, ignoring Hon'ble ITAT....
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....d raised was as follows: "3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing deduction u/s.80IA(4) by considering the initial assessment year for the purpose of claiming deduction u/s.80IA(4) of the Act, was the first year in which the assessee made such claim after exercising the option for ignoring the operation of section 80IA(5) of the I. T Act, 1961 and provision of section 80IA(2) according to which the first year was the year in which the assessee started generating electricity?" 21. The Tribunal in assessee's own case for assessment year 2010-11 in ITA No.83/PUN/2015 and ITA No.96/PUN/2015 (supra.) has observed and held on this issue and the relevant paragraphs are extracted for the sake of completeness as follows: "24. We heard both the sides. We find the issue under consideration was the subject matter before the Tribunal in the assessee's own case for the A.Yrs. 2008- 09 and 2009-10 (supra). The relevant operational paragraphs are extracted as under for the sake of completeness : "9. The Assessing Officer had disallowed the claim of deduction u/s.80IA(4)(iv)(a) of the I.T. Act amounting to Rs. 43,93,23....
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....(A) be set aside and that of Assessing Officer be restored. On the other hand, the learned Authorized Representative has supported the order of CIT(A) on the issue. 9.2 After going through the rival submissions and material on record, we find that as per sec. 80IA(2) of the IT. Act, the assessee has option to exercise the choosing of initial assessment year out of fifteen years beginning with the year in which the undertaking starts production. The Assessing Officer was not correct in asserting that there was no option to the Assessing Officer to exercise option in choosing the initial assessment year. As regards the issue of losses and unabsorbed deprecation of the undertaking already adjusted against the other income it was found that the same is covered by the decision of Pune Tribunal in case of Poonawala Finvest (supra) in favour of the assessee. The Assessing Officer has relied upon Special Bench decision of Ahmedabad Tribunal in the case of ACIT Vs. Goldmine Shares & Finance (P) Ltd. reported in 116 TTJ (Ahmedabad) 705. However, the same could not be followed in view of the Hon'ble Madras High Court judgment in case of Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT re....
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....hose loss and depreciation do not go to reduce the gross total income of an assessee within the meaning of sec.80AB and therefore, bringing the notional concept of carrying forward and set off will be contrary to the scheme of sec.80AB and concept of gross total income. 28. Now, it is clear as we find that this issue is squarely covered by the above discussed judgement of the Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills P. Ltd. Vs. ACIT (38 DTR 57). Where such an overriding judgement of the constitutional court is governing the issue, we are not permitted to rely on the decision of the Special Bench of the Ahmedabad Tribunal. 29. Therefore, following the above judgement of the Hon'ble High Court of Madras, we accept the contention of the assessee and reverse the order of the Commissioner of Income-tax(A) on this point an direct the Assessing authority to grant deduction to the assessee u/s.80IA for the quantum claimed by the assessee without diluting the same by the notional deduction of earlier loss and depreciation". 9.3 In view of above, the CIT(A) was justified in directing the Assessing Officer to allow the deduction u/s.80IA(4)(iv)(a) o....