TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 703
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.... Commissioner of Income Tax (Appeals)-1, Mumbai in appeal No.CIT(A)-I/LTU/ACIT-LTU/24/2013-14 dated 29/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 25/03/2013 by the ld. Asst. Commissioner of Income Tax-LTU, Mumbai (hereinafter referred to as ld. AO). ITA NO.2603/Mum/2017 (A.Y.2012-13) This appeal in ITA No.2603/Mum/2017 for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-1, Mumbai in appeal No.CIT(A)-I/LTU/DCIT-LTU/15/2015-16 dated 02/12/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 10/03/2015 by the ld. Asst. Commissioner of Income Tax-LTU, Mumbai (hereinafter referred to as ld. AO). As identical issues are involved in all these appeals, they are taken up together and disposed of by this common order for the sake of convenience. ITA No.4078/Mum/2016 (A.Y.2010-11) 2. The first issue to be decided in this appeal is with regard to the disallowance made u/s.14A of the Act read with Rule 8D(2) of the Rules. The assessee has raised the ground Nos. ....
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....3,39,22,376/-. In effect apart from voluntarily disallowance of various expenses made by the assessee in the return of income, the ld. AO disallowed the remaining expenses of Rs. 3,39,22,376/- u/s.14A of the Act. By this process, no expenditure was allowed as deduction by the ld. AO for the purpose of earning taxable income. The ld. AO proceeded to make disallowance of the said expenditure u/s.14A both under normal provisions of the Act as well as in the computation of book profits u/s.115JB of the Act. This action of the ld. AO was upheld by the ld. CIT(A). 3.2. At the outset, we find that there was absolutely no satisfaction recorded by the ld. AO in his assessment order as to how the voluntary disallowance made by the assessee is incorrect having regard to the correctness of the accounts of the assessee. Such satisfaction is mandated to be recorded in terms of Section 14A(2) read with rule 8D(1) of the Rules. Non-recording of such mandatory satisfaction on an objective basis with cogent reasons would make the entire addition illegal. Reliance in this regard is placed on the decision of the Hon'ble Apex Court in the case of Maxoop Investments reported in 402 ITR 640. Since, the....
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....at since the investments made by the assessee could not be recovered, the assessee company chose to write off the same in its books of accounts and accordingly, claimed the same as deduction u/s. 36(1)(vii) of the Act as admittedly the assessee company is engaged in the business of financing and being the investment company, the said investments were made by the assessee in the ordinary course of its business which had become bad and accordingly, the assessee was forced to write off the same and claim as deduction u/s.36(1)(vii) of the Act. We find considerable force in this argument of the ld. AR and also considering the fact that the debenture interest income earned by the assessee in the earlier years had been duly offered to tax under the head 'income from business' and assessed as such, we hold that the loss by way of write off of investments which is arising in the ordinary course of business of money lending becomes allowable deduction u/s.36(1)(vii) of the Act. Accordingly, we hold that assessee would be entitled for deduction in respect of debentures / bonds written off in the sum of Rs. 10,02,61,073/- u/s.36(1)(vii) of the Act. The grounds raised by the assessee in this ....
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....r A.Y.2010-11 would apply with equal force for A.Y.2011-12 also except with variance in figures. Accordingly, the ground Nos. 1-16 raised by the assessee are allowed. 13. The assessee had raised additional ground challenging the disallowance of Rs. 1,91,883/- being write off in respect of proportionate premium paid on lease hold land. This additional ground was stated to be not pressed by the ld. AR at the time of hearing and accordingly, the same is hereby dismissed as unadmitted and not pressed. 14. We find that assessee had raised yet another additional ground vide letter dated 04/10/2018 seeking deduction for education cess on income tax paid during the year. 15. We have heard rival submissions and perused the materials available on record. We find that this additional ground raised by the assessee is purely a legal issue and does not involve verification of any facts and hence, we deem it fit to admit the same and take up for adjudication. We find that this issue is no longer res-integra in view of the decision of the Hon'ble Jurisdictional High Court in the case of Sesa Goa Ltd., vs. JCIT reported in 423 ITR 426 wherein the Hon'ble Bombay High Court held that education ces....