TaxTMI 
TaxTMI 
2022 (3) TMI 1311
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....ereby disallowing the expenditure of Rs. 6,814,466/- treating it as expenses incurred towards earning of exempt income. It is submitted that no investment has been made out of the interest bearing funds and therefore the Learned CIT(A) erred in confirming the invoking of the provision of the section 14A of the Act by Assessing Officer. The Learned CIT(A) should have considered no expenditure incurred for earning exempt income. It is submitted that it may be so held now. Without prejudice to our above contentions, it is submitted that the disallowance made on account of expenditure attributable to earning of exempt income is very much on the higher side and should the provisions of Section 14A of the Income tax Act, 1961 read with Rule 8D of the Income tax Rule 1962 be invoked from this assessment year itself then the amount that ought to be disallowed on this account would be Rs. 2,422,351/- and not Rs. 6,814,466/- as worked out by the Assessing Officer 2. The Learned CIT(A) erred in confirming the disallowance made by the Assessing Officer of a sum of Rs. 37,284/- being an expenditure towards cost of club services considering the same as non-business exp....
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....-04 in ITA No.790,791,896 &897 /Bang/2008 order dated 23.7.2021, decided this issue as under: - "43. We heard Ld. D.R. on this issue and perused the record. We notice that the A.O. has extracted interest free funds available with the assessee as well as the value of investments in both the years under consideration. We notice that the own funds available with the assessee as on 31.3.2002 was Rs. 440.92 crores as against the value of investments of Rs. 12.95 crores. Similarly, as on 31.3.2003, the assessee was having own funds of Rs. 505.51 crores as against value of investments of Rs. 0.95 crores. Accordingly, we notice that the own funds available with the assessee in both the years are in far excess of the value of investments. Accordingly, as per the decision rendered by Hon'ble Karnataka High Court in the case of Micro Labs Ltd. (supra), no disallowance out of interest expenditure is called for. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue in both the years under consideration and direct the A.O. to delete disallowance made u/s 14A of the Act in both the years under consideration. 2.2 There is nothing on record placed by revenue in order to....
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....ue as under: "13. The facts with regard to this ground are that the assessee consistently used to follow the method of writing off the packing materials, loose tools and consumables that are purchased in a year without taking an inventory of the same at the end of the year. This method has always been accepted in the past. According to the assessee, the method is also in accordance with accounting principles. The AO for the first time whilst completing the assessment for AY 2000-01, has come to the conclusion that this methodology is not permissible and in the present AY estimated the closing inventory of the aforesaid items at 18.8% of the amounts charged to the profit and loss account. In determining this percentage, the AO took the basis as ratio of Inventory of finished goods in relation to consumption of raw materials.The action of the AO resulted in an addition of Rs. 2,65,15,000/- to the total income of the assessee as value of closing stock." 14. On appeal by the assessee, the CIT(A) deleted the addition made by the AO by following the order of the CIT(A) on identical issue for Assessment Year 2000-01 and 2001- 02. At the time of hearing, it was brought to our n....
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....se for AY 1996-1997 in ITA No.894/Bang/2007 by order dated 30.9.2021 and A.Ys. 2005-06 & 2006-07(supra) decided this issue in favour of the assessee by observing as under:- "3. At the time of heating, learned AR relied on the decision of the Madras High Court in the case of CIT v. Rotork controls India Ltd. & others 293 ITR 311. In the aforesaid decision, as there was no evidence of actual expenditure In prior years, the provision was concluded as not deductible. Facts are different. In the present case. The learned CIT(A) has considered the details meticulously and then granted relief to the assessee After going through the facts of the case, we do not find any infirmity In the order of the learned CIT(A) granting relief to the assessee as the provision was made on the sales effected during that year. It is ordered accordingly." 8.2 There is nothing brought on record by the revenue to take a contrary view. Respectfully following the aforesaid decision of the Tribunal, we dismiss this grounds raised by the revenue for both years under consideration. 9. Ground no. 5 - Deduction u/s. 10A The coordinate bench of this Tribunal on identical facts in Assessee's own c....