TaxTMI 
TaxTMI 
2019 (11) TMI 1574
X X X X Extracts X X X X
X X X X Extracts X X X X
....espectively framed by JCIT, Range-3, ACIT, Circle-3, ACIT Circle 1(3), DCIT, Circle 1(3) & JCIT Circle-3, Ahmedabad. 2. The grounds raised by the assessee are as under; ITA No 643/Ahd/2014 Assessment Year 2010-11 1.The Ld. CIT(A) has erred in law and in fact in confirming disallowance made by the AO of Rs. 69,777 being unpaid employees contribution to PF and Rs. 35,413/- being unpaid employees contribution to ESI on the alleged ground that the provisions of section 43B are not attracted. It is therefore prayed that the additions so made may kindly be deleted. 2.The Ld. CIT(A) has erred in law and in fact in confirming disallowance made u/s. 14A r.w.r. 8D by AO to the extent of Rs. 35,12,759/- out of total disallowance of Rs. 45,91,759/- on the alleged ground of expenses in the nature of administrative expenses for the earning of exempt income. It is therefore prayed that the additions so made may kindly be deleted. 3.The Ld. CIT(A) has erred in law and in fact in restricting depreciation on software @ 25% as against 60% claimed by the appellant. It is therefore prayed that AO may kindly be directed to allow depreciation @ 60% on computer software....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llants. It is therefore prayed that the AO. may be directed to treat the gain on shares as short-term capital gain and to tax at the rate prescribed u/s. 111A of the Act. Your appellant craves liberty to add, to alter, to modify, to amend or delete any of the grounds of appeal at the time of on or before the hearing of appeal. 3. Revenue has raised following grounds of appeal; ITA No.932/Ahd/2014 Assessment Year 2010-11 1.The CIT(A) has erred in law and on facts by allowing depreciation of Rs. 12.72 lacs and Insurance expenses of Rs. 1.50 lacs pertaining to cars which were not owned by the assessee and no evidence of exclusive usage for the purpose of business was produced. The provisions of sections 32(1) and 36(1)(i) were thus not satisfied. ' 2.The CIT(A) has overlooked the findings/reasoning in the assessment order and deleted the addition mainly on the ground that funds for the purchase of cars were provided by the assessee. The CIT(A) has failed to appreciate the fact that dominion over the cars was not with the assessee and payment of legitimate RTO taxes was avoided. 3.The CIT(A) has erred in law and on facts by deleting the disallowance of Rs. 10.78 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ary. ITANo.2882/Ahd/2014 Assessment Year 2011-12 1. The CIT(A) has erred in law and on facts by allowing depreciation of Rs. 13.18 lacs and Insurance expenses of Rs. 0.70 lacs pertaining to cars which were not owned by the assessee and no evidence of exclusive usage for the purpose of business was produced. The provisions of sections 32(1) and 36(1)(i) were thus not satisfied. The CIT(A) has overlooked the findings/reasoning in the assessment order and deleted the addition mainly on the ground that funds for the purchase of cars were provided by the assessee. The CIT(A) has failed to appreciate the fact that dominion over the cars was not with the assessee and payment of legitimate RTO taxes was avoided. 2.The CIT(A) has erred in law and on facts by deleting the disallowance of Rs. 10.96 Iacs u/s 14A r.w.r 8D(2)(ii) despite the fact that the assessee had made substantial investments which earned exempt income and had also claimed interest expenses of Rs. 5.11 crores during the year. The AO had only disallowed proportionate interest expenses under Rule 8D(2)(ii). 3.The CIT(A) has erred in law and on facts by considering the outstanding payment towards purchase of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IT(A) has erred in law and in fact in confirming disallowance made u/s. 14A r.w.r. 8D(2)(iii) by AO to the extent of Rs. 55,40,921/(Rs. 65,40,921/- Less: Rs. 12,00,000/- offered by appellant) out of total disallowance of Rs. 90,60,923/- on the alleged ground of expenses in the nature of administrative expenses for the earning of exempt income. Whereas, the appellant furnished that investment in subsidiary companies and partnership firms are in the nature of business arrangement/strategies and for the purpose of commercial expediency. It is therefore prayed that the additions so made may kindly be deleted. 3.The Ld. CIT(A) has erred in law and in fact in restricting depreciation on software @ 25% as against 60% claimed by the appellant. It is therefore prayed that AO may kindly be directed to allow depreciation @ 60% on computer software and disallowance so made may kindly be deleted. Your appellant craves liberty to add, to alter, to modify, to amend or delete any of the grounds of appeal at the time of on or before the hearing of appeal. ITA. No 63/Ahd/2017 Assessment Year 2013-14 1.The Ld. CIT(A) has erred in law and in fact in confirming disallowance made by the AO of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er section 32 of the Act, the twin condition of ownership and the assets used for the purpose of assessee's business must be satisfied. 2.The CIT(A) has erred in law and on facts by deleting the addition of Rs. 35,20,002/- made by AO u/s 14A r.w.r 8D( of the Act, on account of interest expense, as the appellant is having huge interest income and borrowed funds are used for broking business. 3.The CIT(A) has erred in law and on fact in deleting the addition of Rs. 1,19,85,613/- made by AO, on account of bad debts. The AO has rightly disallowed Rs. 1,19,85,613/-, since the condition laid down in section 36(2) of the I.T. Act, 1961 is not satisfied by the assessee. . 4.The CIT(A) has erred in law and on facts in deleting the addition of Rs. 5,41,251/- made by A.O u/s 40(a)(ia) of the Act, on account of Lease Line charges of Rs. 5,41,251/- paid to BSNL. The AO has rightly disallowed Rs. 5,41,251/-, since the assessee has violated the condition laid down in section 194I r.w.s. 40(a)(ia) of the I.T. Act,1961. 5.The CIT(A) has erred in law and on facts by deleting the addition of Rs. 66,24,640/- made by AO on account of STCG of Rs. 56,86,282/- on shares as business income and LTCG....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee by the judgment of Hon'ble jurisdictional High Court in the case of CIT V/s Gujarat State Road Transport Corporation (supra). 10. Per contra Ld. Departmental Representative vehemently argued supporting the orders of both the lower authorities. 11. We have heard rival contentions and perused the records placed before us. Assessee's first common grievance raising Ground No.1 of the appeal for Assessment Year 2010-11 to 2014-15 challenges the finding of Ld. CIT(A) confirming the disallowance u/s 43B of the Act for delay in deposit of employees provident fund. Ld. Counsel for the assessee fairly accepted that this issue stands squarely covered against the assessee by the judgment of Hon'ble jurisdictional High Court in the case of CIT V/s Gujarat State Road Transport Corporation (supra) wherein Hon'ble court held as under; . "8.00. ln view of the above and for the reasons stated above, and considering section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause (x) of clause 24 of section 2, it is held that with respect to the sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he year and also had sufficient interest free funds to make investments. Ld. CIT(A) placed reliance on various judgments to delete the disallowance u/s 14A of the Act for the interest component. However Ld. CIT(A) confirmed the disallowance u/s 14A for the administrative expenses calculated @0.5% of average investments. 14. Now both the assessee and revenue are in appeal against the finding of the Ld. CIT(A) relating to disallowance u/s 14A of the Act. 15. As regards disallowance of proportionate interest under Rule 8D(2)(ii) of the I.T. rules deleted by Ld. CIT(A) at Rs. 10.78 lacs, Rs. 10.96 lacs and Rs. 35.20 lacs for Assessment Year 2010-11 to 2012-13 respectively, Ld. Departmental Representative vehemently argued supporting the orders of both the lower authorities. 16. Per contra Ld. Counsel for the assessee relied on the finding of Ld. CIT(A) and also referred paper book to explain that during all the three years gross interest income is more than the interest expenditure and the interest free funds available with the assessee comprising of capital and reserve and surplus are sufficient to cover the investments made for fetching exempt income. Reliance placed on following ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....placed reliance on the decision of Kolkatta Tribunal in the case of Trading Apartment Limited and the decision of Tribunal in the case Morgan Stanley India Securities Private Limited. He however considered the administrative expenses to be 0.5 of the average investments and disallowed the same. 8. Before us the Revenue could not bring any material on record to controvert the findings of CIT(A). We therefore find no reason to interfere the order of CIT(A). Thus this ground of the Revenue is dismissed. " In the instant case, the total interest expenditure claimed was Rs. 3,79,05,391/-. Out of the said amount, A.O. considered interest of Rs. 56,12,695/- for working out the disallowance under Rule-8D(2)(ii). Out of the said amount, Rs. 29,70,835/- was paid to banks against O.D. and Rs. 26,41,860/- was paid on unsecured loans. As against this appellant earned interest income of Rs. 14,45,40,211/- from banks on FDRs and margin money. In other words, appellant had net interest income of over Rs.IO.66 crores. Keeping in view this facts and in the light of the above quoted decision, I am of the view that disallowance of interest under 8D(2)(ii) is not sustainable. It is deleted." 18. F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, admittedly, the assessee did not make any claim for exemption. In such a situation, Section 14A could have no application." 5. In view of the above, we are of the opinion that no substantial question of law arise. 6. The appeal is dismissed". 19. The Co-ordinate Bench in the case of DCIT vs. Amigo Securities Pvt. Ltd ITA Nos.1532 & 1533/Ahd/2009 also held in favour of the assessee that disallowance u/s 14A of the Act is not for the interest expenditure if the assessee has sufficient interest free funds to cover up the alleged investments. Relevant extract of the decision of the Tribunal is reproduced below; "6. In the light of the above discussion, we are of the view that since the assessee has demonstrated that there was sufficient reserves, share capital and interest-free advances stated to be to the tune of Rs. 1988.26 lacs in A.Y. 2005-06 and Rs. 1827.39 lacs for A. Y. 2006-07, then the decision of the CIT vs. Reliance Utilities and power Ltd. 313 ITR 340 (Bom.) is to be applied on these facts. Resultantly, we hereby confirm the findings of the ld.CIT(A) and dismiss these grounds of the Revenue [or both the years. " 20. We therefore respectfully following the above j....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in unquoted shares and also brought forwarded investments in quoted shares. Perusal of the balance sheet also shows that assessee has not carried out major reshuffle in its investment portfolio and most of the investments are brought forwarded. Assessee is also engaged in the business of brokerage from shares and securities trading through National Stock Exchange and other depository services. Ld. A.O has also not pointed out any specific instance about any particular administrative expenses incurred specifically for managing the investment portfolio. 26. We are also aware the fact that Rule 8D(2)(iii) of the I.T. Rules has been specially enacted to compute the administrative disallowance since it is practically not possible to bifurcate the administrative expenses specifically incurred for managing the investment portfolios. But certainly assessee should not be burdened with abnormal disallowance of administrative expenses just because of application of Rule 8D and should be considered with reference to the investment portfolio of the assessee unless until Ld. A.O makes proper satisfaction with evidence and factual finding. 27. We therefore in the given facts and circumstances ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r disallowing depreciation on software @ 60% in place of 25% which are applicable for intangible asset. We observe that ld. Assessing Officer has treated the expenditure of Rs. 91,999/- towards purchase of software license as capital asset under the block of intangible assets eligible for depreciation @ 25% whereas ld. CIT(A) has also treated the expenditure of Rs. 91,999/- as capital expenditure but has categorized it along with computers and directed the Assessing Officer to allow depreciation @ 60% by observing as under :- 4.3 Decision: I have carefully perused the assessment order and the submissions given by the appellant. The appellant has submitted that since the software involves rapid obsolescence, the claim of revenue expenditure-should be allowed. I am not inclined to agree with the submission of the appellant. The appellant has bought software licenses which are valid for long term and the expenditure incurred thereon is, therefore, not in the nature of Asst. Year 2009-10 revenue. Therefore; the plea of the appellant that expenditure is in the nature of revenue is dismissed. However, the treatment of the software by the A. O. as intangible asset and allowing inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing was more than 30 days but less than one year claim of Short Term Capital Gain to be allowed and for remaining, where the period of holding was less than 30 days, the gain/loss was directed to be treated as business gain/loss. However for Assessment Year 2012-13 Ld. CIT(A) following the decision of Co-ordinate Bench in the case of Kalpesh Shah V/s ACIT ITA No. 2818/Ahd/2011 dated 31.10.12 give away the procedure of calculating the gain considering the period of 30 days thus allowing the appeal of the assessee and accepting the claim of Long Term and Short Term Capital Gain shown by the assessee from sale of shares held under the "Investment head". 37. Now the assessee and Revenue are in cross appeal for Assessment Year 2010-11 & 2011-12 and Revenue is in appeal for Assessment Year 2012-13. 38. Ld. Counsel for the assessee vehemently argued for all the three years since the facts remain the same and submitted that the appellant company is in the business of share broking far clients. The company has also invested in equity shares on long term basis and earned long-term capital gain/loss and shortterm capital gain/loss. It is submitted that the appellant is a broker of shares &-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee has been consistently showing the Short Term and Long Term Capital Gain from sale of shares hold for long term purposes. 40. Per contra Ld. Departmental Representative vehemently argued supporting the orders of Ld. A.O for respective years wherein the Ld. A.O has referred to various judgments in order to prove that the alleged gain of Long Term and Short Term Capital Gain is actually the business income of the assessee since they were entered as an adventure to trade. 41. We have heard rival contentions and perused the records placed before us and also carefully gone through the judgments relied and referred by both the parties. The issue relates to treatment of Gain/Loss from sale of shares. The assessee company derives income from brokerage business of shares and securities. It also provides depository services. Trading of shares is also carried out in equity shares, derivatives and future options. Assessee has duly disclosed the income from trading of shares with specific details of opening stock purchase, sales and closing stock. Inventory of equity shares i.e. stock in trade is valued at "cost or market price whichever is less". There is no dispute to such disclosed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....securities (i.e. whether the same is in the nature of capital gain or business income), CBDT realizing that major part of shares/securities transactions takes place in respect of the listed ones and with a view to reduce litigation and uncertainty in the matter, in partial modification to the aforesaid Circulars, further instructs that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as Capital Gain or Business Income, shall take into account the following - a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares/securities would be treated as its business income, b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent As....
X X X X Extracts X X X X
X X X X Extracts X X X X
....res/securities as investment and interest income. 10.5 Appellant is having interest income of Rs. 14.69 crores as against interest expenditure of Rs. 8.06 crores, which shows that borrowed funds were not utilized for purchase of shares/securities. Also, Appellant has shown investment activity separately in the books of accounts. 10.6 During the hearing, the appellant was asked to show how the assessee has treated similar transaction in subsequent Fear, the appellant held copies of computation of total income for subsequent year, which shows that in these Fears also appellant has shown short term capital gain from sale of shares held for less than 12 months. 10.7 Further, loss of sale of shares in earlier year as short term capita/loss and same was carried forward to the next Fear instead of treating the same as business loss. Thus intension of appellant is clear that shares acquired for investment are shown In books as 'investment ' and shares acquired for trade are shown as trade. 10.8 In appellant's own case for AY 2011-12 dated 13-08-2014in appeal No.CIT(/!)- VI/jt.CIT/R.3/214/ 2013-14, .My predecessor directed A.O to assess the gain on shares held up to 30 days ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pository services etc. From perusal of the balance sheets we find that the equity shares held by the assessee are categorized into two parts. Under the head "Investments" the equity shares for various companies are shown at "cost price" whereas under the head Inventories the equity shares held by the assessee as "stock in trade" valued at cost or market price whichever is less. So the treatment of shares held by the assessee has been clearly differentiated in the books of accounts. 44. On test check basis we verified the transactions of Long Term Capital Gain and found that the equity shares sold by the assessee were appearing in the list of "investment" attached with the audited financial statements of preceding years. We also find that the Short Term Capital Gain of few scrip were also brought forwarded from last year. So for the purpose of verifying that whether the equity shares is hold for investment purpose it is not so difficult for the "Long Term Capital Gain" since the names can easily be verified from the list of Investments of preceding financial year. 45. As far as the Short Term Capital Gain, it may be difficult at some point of time because the equity shares if purc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT(A) allowed the claim. Now revenue is in appeal before the Tribunal. 49. Ld. Departmental Representative vehemently argued supported the order of Ld. A.O. 50. Per contra Ld. Counsel for the assessee relying on the finding of Ld. CIT(A) also submitted that the funds were provided by the company and the issue is squarely covered in favour of the assessee by the judgment of Hon'ble Supreme Court in the case of Mysore Minerals Ltd. V/s CIT 239 ITR 775 as well as the judgment of jurisdictional High Court in the case of CIT V/s Aravali Finlease Ltd. (2012) 341 ITR 282 (Guj). 51. We have heard rival contentions and perused the records placed before us. Revenue's grievance is against the finding of Ld. CIT(A) allowing the depreciation and insurance on the motor cars registered in the name of the Directors. It is not in dispute that the cars on which the depreciation has been claimed and insurance expenses are in the name of Directors. It is also not disputed that the funds to purchase the car have been provided by the assessee company and the cars have been used for the business purposes of the company. Whether in the given facts the assessee is eligible to claim the depreciation....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claimed were not genuine. Having considered the facts of the matter and the case laws on the issue impugned disallowance of depreciation on car and the insurance premium is deleted. This ground of appeal is allowed". 52. We further observed that the Co-ordinate Bench, Ahmedabad in the case of Swagat Infrastructure Ltd vs. JCIT (2013) 37 taxmann.com 83 (Ahd. Trib.) also took similar view favouring the assessee by following the judgment of Apex Court in the case of Mysore Minerals Ltd vs. CIT 239 ITR (supra) observed as under; "8. We have heard the rival submissions and perused the materials available on record. Before Ld. CIT(A) the contention of assessee was also that such expenditure was allowed in earlier year: The factum that such expenditure was allowed in earlier year is not contradicted by the Revenue. As per the Section 32(1) of the Act depreciation is allowable if the machinery is owned wholly and partly by the assessee, however, the Hon'ble Supreme Court has further enlarged this scope of word "own" in its judgment rendered in the case of Mysore Minerals Ltd. (supra), wherein the Hon'ble Apex court has held that the provisions should be so interpreted and the w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....transaction on each defaulting clients. It was contended by the assessee that the alleged bad debtor if not allowable as bad debts u/s 36(2)(vii) of the Act, the said amount may be allowed as trading loss. However Ld. A.O was not satisfied and denied the benefit u/s 36(2) and also did not allowed it as a business loss. Aggrieved assessee preferred appeal before Ld. CIT(A) and succeeded. Now the revenue is in appeal before the Tribunal. 56. Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O. 57. Per contra Ld. Counsel for the assessee relying on the finding of Ld. CIT(A) also submitted that the issue is squarely covered against the revenue by the decision of Co-ordinate bench in assessee's own case vide ITA No.1577/Ahd/2012 order dated 22.01.2016. 58. We have heard rival contentions and perused the records placed before us. Revenue is aggrieved with the finding of Ld. CIT(A) deleting the disallowance of bad debts claimed by the assessee allowing it as trading loss. We observe that Ld. CIT(A) allowed the assessee's claim relying on the decision of Co-ordinate Bench rendered in assessee's own case for Assessment Year 2009-10 vide ITA No.1577/Ahd/2012 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....contra Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O but could not controvert the submission made by the Ld. Counsel for the assessee. 63. We have heard rival contentions and perused the records placed before us. Revenue has challenged the deletion of disallowance made u/s 40(a)(ia) of the Act for non deduction/short deduction of tax at source on the payment of V-Sat charges/ lease line charges/NSDL charges. We find that similar issue was adjudicated by the Coordinate Bench in assessee's own case for Assessment Year 2009-10 and has been decided in favour of the assessee by the Tribunal observing as follows:- "5.The first ground relates to the deletion of the addition made on proportionate basis u/s, 40(a)(ia) of the Act. A perusal of the assessment order show that this addition has been made on account of VSAT expenses and lease line charges incurred by the assessee during the year on which TDS was made as per the provisions of Section 194C and 194J of the Act. The A.O was of the firm belief that the relevant provision applicable on the payments made by the assessee attract section 1941 of the Act. The A.O accordingly disallowed Rs. 7,49,455/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....before the Tribunal. 67. Ld. Departmental Representative vehemently argued supporting the orders of Ld. A.O. 68. Per contra Ld. Counsel for the assessee placed reliance on the decision of Co-ordinate Bench Delhi in the case of ITO V/s Mittal Investment & Co (2013)33 Taxmann.com 52 (Del.Trib.) and also on the finding of Ld. CIT(A). 69. We have heard rival contentions and perused the records placed before us. Revenue is aggrieved with the finding of Ld. CIT(A) deleting the disallowance made u/s 40(a)(ai) of the Act for non deduction of tax at source u/s 194H on the payment of sub-brokerage/commission on the IPO. We observe that Ld. CIT(A) deleted the disallowance giving following findings:- "10.4. I have considered the facts of the matter. Section 194H deals with deduction of tax on commission or brokerage. Clause (i) of the Explanation below the section defines commission or brokerage. According to the said clause any payment in relation to any transaction relating to securities is excluded for the purposes of the said section. Clause (iii) of the Explanation states that the expression 'securities' shall have the meaning assigned to it in clause (h) of Section 2 of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in terms of section 194H. Section 194H deals with provisions relating to TDS on commission or brokerage. Commission or brokerage has been defined in Explanation (i) as under: - "Explanation (i) "commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuation article or thing, not being securities;" 15. A bare perusal of the above Explanation clearly shows that if the commission or brokerage has been paid by a person acting on behalf of another person for services rendered in connection with securities then the said commission or brokerage is outside the purview of section 194H. Clause (h) of sub-section (2) of the Securities Contract Act reads as under: - "Clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) defines securities as under: (h) "securities" include - (i) shares, scripts, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issue for Assessment Year 201011 & 2011-12 raised at the instance of the revenue challenging the finding of Ld. CIT(A) deleting the addition to Book profit u/s 115JB of the Act at Rs. 45.91 lacs, & Rs. 45.59 lacs respectively. 73. Brief facts relating to this ground are that the Ld. A.O added disallowance made u/s 14A of the Act to the book profit for the purpose of computing tax u/s 115JB of the Act. It was contended by the assessee that disallowance u/s 14A of the Act cannot be added to book profits since Clause(f) of explanation (1) of Section 115JB has no application. When the matter came up before Ld. CIT(A) assessee succeeded. Now revenue is in appeal before the Tribunal raising common issue for Assessment Year 2010-11 and 2011-12. 74. At the outset Ld. Counsel for the assessee submitted that the issue stands squarely covered in favour of assessee by the decision of Co-ordinate Bench, Ahmedabad in the case of DCIT V/s Torrent Cable Limited ITA No.2584/Ahd/2012 order dated 11.6.2018. Reliance was also placed on the decision of Special Bench, Delhi Tribunal in the case of ACIT V/s Vineet Investment Pvt. Ltd & Anr. 165 ITD 27 (Delhi). 75. Per contra Ld. Departmental Represen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Pvt.Ltd. & Anr. 165 ITD 27 (Delhi)[SB] where it was held that the AO was not entitled to tinker with book profits contemplated under S.115JB towards disallowance made under s.14A of the Act. We similarly find that judgement of Hon'ble Bombay High Court in CIT vs. Bengal Finance and Investments Pvt. Ltd. in ITA No.337 of 2013 order dated 10/02/2015 also complements the issue. Thus, seen on the anvil of the judicial fiat available squarely on the issue, we are disposed to assign merits to the contentions on behalf of the assessee. At this juncture, we pause to note the concern of revenue seeking to plead possible redundancy of clause(f) to Explanation to s.115JB in the event of disagreement with the action of AO. We are alive to such concerns. However, as noted, we are governed by the superior wisdom available in this regard. Hence, remedy to revenue, if any, perhaps lies elsewhere. Accordingly, respectfully following the decisions governing the field, we direct the AO to delete the adjustments made on account of estimated disallowance determined under s.14A of the Act while computing 'book profit' under s.115JB of the Act." 3.2 In view of the aforesaid discussion, gro....