TaxTMI 
TaxTMI 
2020 (12) TMI 871
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....,29,011 on the slump sale. This calculation was based on the procedure prescribed under Section 50B of the Act r.w.r. 6H of the IT Rules. The computation of net worth for the purpose of Section 50B was furnished along with the Return of Income in the prescribed form No. 3CEA, duly certified by the Auditors as per the mandatory requirements of the relevant provisions of law. As per calculations contained in the form No. 3CEA, net worth was calculated at Rs. 27,72,70,989/-. 3. During the course of assessment proceedings, Ld. A.O. examined this issue and issued a letter to the assesse that as per calculation, the A.O. was of the opinion that the net worth works out to Rs. 71.80 crores and, therefore, appellant company was called upon to explain this position. 4. The assesse in reply stated that computation is substantiated by form No. 3CEA wherein the value of net worth is shown at Rs. 27,72,70,989/- which is after considering the figures and other asset at Rs. 1,28,73,10,929/- which is arrived after netting off with current liabilities and provisions of Rs. 70.67 crores and the value of liabilities is excluding the same. 5. Assessee further stated that without prejudice what....
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....oject was commenced during A.Y. 2005-06 in which year the assessee had claimed deduction of Rs. 2,11,87,992/- and while allowing the claim of deduction, the A.O. had verified the details of such claim in the light of the provisions of Section 80IA(4) of the Act. The ld. counsel strongly stated that since the claim of deduction in the initial year has been allowed by the A.O. therefore, the same cannot be denied in the subsequent assessment years. The ld. counsel drew our attention to the various clauses of the Agreement No. CER/SR/MDU/25/2003-04/ DT. 27.02.2007. The ld. counsel further drew our attention to the responsibilities of the contractor as exhibited on page 254 of the paper book. The ld. counsel further drew our attention to the fact that after completion of 7 years period, the entire plant has to be handed over to the Board in good working condition. The ld. counsel concluded by saying that the claim of deduction cannot be denied on flimsy ground. 28. Per contra, the ld. D.R. strongly supported the findings of the A.O. It is the say of the ld. D.R. that there is no error in the findings of the ld. CIT(A). 29. We have given a careful consideratio....
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....king. What the Explanation, did was to clarify a statutory provision which was at best possible of a confusion. If that be, so, the Explanation must be seen as one being in the nature of plain and simple Explanation and not either adding or subtracting anything to the existing statutory provision. If the Explanation was purely explanatory in nature and did not mend the existing statutory provisions, the question of levying any tax with retrospective effect would not arise. The Explanation only supplied clarity where confusion was possible in the unamended provision. In that view of the matter, this cannot be seen as a retrospective levy." 30. The assessment before us is 2007-08 & 2008-09, therefore the binding decision of the Hon'ble High Court of Gujarat (supra) is directly applicable on the case in hand. As mentioned elsewhere, the initial assessment year is A.Y. 2005-06 and after thorough examination, the claim of deduction was allowed by the Department. In our understanding of the law without disturbing the claim of the initial assessment year, a similar claim cannot be denied in the subsequent assessment years. Considering the facts of the case in the light of the....
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....essee submits that it has sufficient interest free funds available with it to cover aforesaid investments of and hence no disallowance u/s 14A can be made: Particulars Amount (Rs.) as on 31/3/2008 Amount (Rs.) as on 31/3/2009 (a) Share Capital 1,98,22,970 1,98,22,970 (b) Reserves & Surpluses 68,46,00,259 68,15,94,210 Total 70,44,23,229 70,14,17,180 Investments 1,08,17,749 46,68,87,527 In support of the above, assessee relies, on the ratio of Hon'ble Supreme Court's decision in case of Munjal Sales Corporation V/s Commissioner of Income-Tax. 298 ITR 298; wherein the Apex Court has observed that the assessee had advanced interest free loan to its sister concern amounting to Rs. 5,00,000/-; whereas the opening balance of interest free funds as on 1 April, 1994 was Rs. 1.91 crores, which is sufficient to cover the impugned loan ofRs. 5 lacs. Hence, there cannot be any disallowance of interest under Section 36(1) (in) of the Act. The assessee also places its reliance on the following decisions: (a) Decision of the Bombay High Court in CIT v. Reliance Utilities and Power Ltd. (313 ITR 340) (b) Decision of the....
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....J 987 (3) Wipro Information Technology Vs. Dep. CIT (Bang) 88 TTJ 378 (4) Dep. Comm. Of I.Tax Vs. Shree Synthetics Ltd. (Indore) 88 TTJ 717. (5) Harish K. Bhart Vs. ITO 85 TTJ 872. It is also to be noted that the matter has been extensively covered and decided in favour of the Revenue in the case of ITO vs. M/s. Daga Capital Management Pvt. Ltd. vide ITA No.8057/Mum/03 for A.Y.2001-02, by Hon'ble Mumbai ITAT (SB). It is also to be noted that S.14A disallows expenditure "in relation to income which does not form part of total.income" and in order for the expenditure to be disallowed, actual income need not be earned. This view has been confirmed in the case of Cheminvest Ltd. vs. ITO (ITAT, Delhi (SB)) in ITA No. 87/Del/2008. In view of the discussion held above and the position of law with regard to the applicability of provisions of section 8D as interpreted by the Hon'ble High Court, I am not satisfied with regards to the accounts of the assessee-company in relation to earning income that does not form part of the total income of the assessee-company. Thus, I proceed to compute the expenditure incurred in relation to e....