TaxTMI 
TaxTMI 
2019 (6) TMI 1635
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....s erred in law and on facts in deleting the disallowance u/s 80IA of Rs. 6,15,58,478/-. iv. The appellant craves, to leave, to amend and/or to alter any ground or add a new ground which may be necessary." 2. Assessee filed its return of income on 29.11.2013 through electronic media declaring total income at Rs. 8,22,04,010/- after claiming deduction of Rs. 6,15,58,478/- u/s 80IA of the Act, which was processed u/s 143(1) of the Act. Upon scrutiny notice dated 04.09.2014 u/s 143(2) was served followed by a further notice dated 27.05.2015 u/s 142(1) calling for preliminary details and ultimately notice u/s 142(1) dated 11.06.2015 and 03.08.2015 along with the detailed questionnaire was issued upon the assessee. 3. Ground No.1: During the course of assessment proceeding, it was found upon verification of the balance sheet that the assessee company had made huge investment in shares, the income from which is exempt from tax. The assessee has earned Rs. 1,18,62,026/- as dividend income in the year under consideration. It also appears that the assessee has claimed interest payments to the loans and incurred other expenses. However, the assessee has not deducted such intere....
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....79 crores in respect of strategic investment in Nandan Exim Ltd., which is practically and legally outside the purview of section 14A of the Act. In that view of the matter, order passed by the Learned CIT(A) in deleting the addition of interest of Rs. 26,40,992/- as disallowed u/s 14A is justifiable. So far as the administrative expenditure is concerned, he relied upon the judgment passed by the Co-ordinate Bench in the case of Chudgar Ranchodial Jethalal Trade Pvt. Ltd. in ITA No.245/Ahd/2013, wherein relying upon the judgment passed by the Delhi High Court in the case of Joint Investment Pvt. Ltd.-vs-CIT in ITA No.117 of 2015 that the window for disallowance is indicated in section 14A, and is only to the extent of disallowing expenditure "incurred by the assessee in relation to the tax exempt income".... and GMM PFAUDLER Ltd.- vs-JCIT passed by this Co-ordinate Bench and by Gujarat High Court in the case of PCIT-vs-Sintex Industries Ltd. reported in [2017] 82 taxmann.com 71 (Gujarat) where it was held that when the assessee is having its own surplus fund against which minor investment was made, no question of making any disallowance of expenditure in respect of interest an....
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....In view of the above, the assessee's submission that it has not incurred any expenditure in investment in shares is found to be not, acceptable. There is no denying the fact that the assessee has made investment in shares and securities income from which is exempt from tax. Equally, it is also a fact that the assesses has taken unsecured loan and on which it is paying large sum of money as interest The motive of the assessee in investing in shares and securities is amply clear that it should earn dividend income from which is exempt from tax. The assessee also failed to substantiate with evidence for its claim that it has not incurred any expenditure in the investment activity. As stated above, the assessee has made investment in shares and securities only for the purpose of earning dividend. iii. It is pertinent to note here that a similar issue was before the Hon'ble Bombay High Court in the Case Godrej & Boyce Mfg. Co. Ltd. Mumbai vs. DCIT and similar contentions including the ratio laid down by various Courts as relied upon by the assessee has been duly dealt by the Hon'ble Court and decided the matter in the favour of revenue. "Section 14A clearly....
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....w of the discussion made above and the position of law with regard to the applicability of provisions of section 14A r.w.r. 8D of I.T. Rule as interpreted by various Hon'ble High Courts, 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. vii. In view of the above, the provisions of section 14A r.w.r. 8D is clearly applicable in the assessee's case. Accordingly, disallowance u/s 14A r.w.r. 8D is worked as under: (i) The amount of expenditure directly relating to income which does not form part of total income; 0 (ii) In a case where the assessee has incurred expenditure by way of interest during the previous year which is not directly attributable to any particular income or receipt, an amount computed in accordance with the following formula, namely - A X B/C - Where (A) Amount of expenditure by way of interest other than the amount of interest included in clause (i) incurred during the previous year; 43019854 2640992 (B) The average of value of investment, income from which does not o....
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....ring the year consideration. However, the ld. CIT(A) has deleted the proportionate interest disallowance made by the assessing officer to the amount of Rs. 44,68,770/- and confirmed the addition to the amount of Rs. 7,55,141/- by referring amount to be disallowed for administrative expenses. We have also considered that Co-ordinate Bench of the ITAT Ahmedabad in the case of Jivraj Tea Ltd. vs. DCIT ITA No. 886/Ahd/2012 order dated 28th August, 2014 related to assessment year 2008-09 restricting the disallowance to the extent of exempt After perusal of the facts, we are of the view that disallowance in the case of the assessee after referring the number of decision of Co-ordinate Benches cannot exceed the amount of exempt income earned by the assessee during the year under consideration, therefore, we restrict the disallowance u/s. 14A to the amount of Rs. 13,951/- exempt income earned by the assessee. Therefore, the appeal of the assessee is partly allowed." The facts of the case is slightly different from the earlier year. In this year the assessee earned dividend income of Rs. 1,15,62,026/- i.e. much higher than the earlier year which is why taking into consideration the entir....
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....proportionate interest should not disallowed. The explanation rendered by the assessee was not found suitable and the Learned AO, therefore, disallowed of Rs. 5,02,548/- out of interest on the ground that the appellant had given interest free advances totaling to Rs. 41,87,900/- to three parties on which no interest was charged. Such disallowance was made upon calculation of interest @12%. The Learned CIT(A), however, deleted the same relying upon the order passed by his predecessor in assessee's own case for A.Y. 2011-12 and 2012-13. At the very outset of proceeding, the Learned Counsel submitted before us that issue is entirely covered in assessee's own case by the Learned Tribunal in ITA No.1547/Ahd/2016 for A.Y. 2012-13 in revenue's appeal. On the contrary, the Learned DR failed to contradict the submissions made by the Learned AR. 7. Heard the representative of the respective parties, perused the relevant materials available on record. It appears that the Co-ordinate Bench in assessee's own case in ITA No.1547/Ahd/2016 for A.Y. 2012-13 decided the issue in favour of the assessee by confirming the deletion of addition made by the Learned AO on interest in the A.Y. 2012-13....
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....en in the ordinary course of business and the same were not in the nature of any loan. Therefore, the appellant cannot be expected to charge interest which is not receivable. It was not a case where any interest free advance was given to any related party, here out of the business compulsion the advance was given and it was not possible for the company to charge interest on it. It is submitted that the funds borrowed by the appellant company have been used by it in its business only and hence the interest expenditure incurred for such borrowings was invariably allowable u/s. 36(1)(iii) of the Act-the appellant further submits that it had sufficient fund available in form of share capital, Reserve and surplus for giving the loans and advances and therefore interest on borrowed funds cannot be disallowed. It has share capital, Reserve and surplus of Rs. 232,93,95,958/-. As the interest free funds enjoyed by the appellant are far in excess of the interest free advances made by appellant, no disallowance u/s 36(i)(iii) can be made in case of appellant. In this connection the appellant relies on the decision of Torrent Vs. ACIT 73 TTJ 624(Ahd). The entire interest-free funds in....
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....nery and Plant used for the said activity shown at Rs. 766.44 lacs. According to the Learned AO, the assessee claimed deduction u/s 80IA of the Act on a much higher amount than its claim of deduction u/s 80IA of the Act as compared to earlier years, and ultimately finalized the issue by making addition of the entire amount of Rs. 6,15,58,478/- u/s 80IA of the Act. In appeal, the same was deleted by the Learned CIT(A) relying on the decision made by his predecessor in assessee's appeal for A.Y. 2012-13. Hence, the instant appeal before us. 10. At the very outset of the proceeding, the Learned AR submitted before us that the issue is squarely covered by the Co-ordinate Bench in assessee's own case; copy of the order passed by the Co-ordinate Bench in ITA Nos.2092/Ahd/2015, 900 & 1547/Ahd/2016 for A.Ys. 2010-11 to 2012-13 has been handed over to us by the Learned AR. However, the Learned DR failed to controvert the contentions made by the assessee. 11. Heard the representative of the respective parties, perused the relevant materials available on record. We have also carefully considered the judgment passed by the Hon'ble Co-ordinate Bench in assessee's own case as relied upon b....
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....e merger, as the amalgamated company) in such a manner that:- a. All the property of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of amalgamation. b. All the liabilities of the amalgamating company or companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of amalgamation. Shareholders holding not less than 3/4th in value of the shares in amalgamating company or companies (other than shares held there is immediately before the amalgamation or by a nominee for the amalgamated company or its subsidiary) become shareholders of the amalgamated company by virtue of the amalgamation, otherwise than as a result of the acquisition of the property one company by another company pursuant to the purchase of such property by the other company as a result of distribution of such property to the other company after the winding up of first mentioned company. B. Tax concessions to the amalgamated company: The amalgamated company shall be eligible for tax concessions only if the following two conditions are satisfied: I....