TaxTMI 
TaxTMI 
2022 (6) TMI 121
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed CIT(A)-5, Ahmedabad dated 30.05.2018 and CIT(A)-1, Ahmedabad dated 26.07.2018 for Assessment Years 2013-14 and 2014-15 respectively. Since these appeals/COs involve common issues, the same have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. First we take up the Revenue's appeal for AY 2012-13 being ITA No.1470/Ahd/2018 which is directed against the order of learned CIT(A)-1, Ahmedabad dated 28.03.2018. 3. The issue raised in ground No.1 of this appeal relates to the deletion by the learned CIT(A) of the addition of Rs.29,03,478/- made by the Assessing Officer on account of disallowance under Section 14A of the Income-tax Act, 1961 ("the Act" in short) read with Rule 8D of Income-tax Rules, 1962 ("Rule" in short). 4. The assessee, in the present case, is a company which is engaged in the business of development, operation and maintenance of solid cargo terminal at Dahej. The return of income for the year under consideration was originally filed by the assessee on 29.09.2012 declaring a loss of (-) Rs.94,55,91,217/- which was subsequently revised to (-) Rs.94,24,26,666/- in the return filed on 27.09.2013. The r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....held that no disallowance under Section 14A of the Act could be made when no exemption in respect of any income was actually claimed by the assessee. The learned CIT(A), in our opinion, was fully justified in deleting the disallowance made by the Assessing Officer under Section 14A r.w. Rule 8D by relying on the decision of Hon'ble jurisdictional High Court in the case of Corrtech Energy Pvt. Ltd. (supra) and upholding his impugned order giving relief to the assessee on this issue, we dismiss Ground No.1 of the Revenue's appeal. 7. As regards the issue involved in Ground No.2 of the Revenue's appeal relating to the deletion by the learned CIT(A) of the addition of Rs.29,03,478/- made by the Assessing Officer on account of disallowance under Section 14A while computing the book profit of the assessee-company under Section 115JB of the Act, the learned Counsel for the assessee has pointed out that the book profit under Section 115JB of the Act as computed by the Assessing Officer being negative, the MAT provision was held to be not applicable in the case of the assessee for the year under consideration. This ground raised by the Revenue thus is infructuous and even the learned DR ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cquiring the fixed assets of the assessee company. The assets for which such loan was taken are already put to use as is evident on perusal Note No 36 of the schedule of CWIP which shows that the entire amount has been capitalized to the respective fixed assets and the interest on the said loans after capitalizing the said assets is debited to the Profit and Loss Account. Further, it is submitted that the said accounting treatment has been followed by the company consistently on year to year basis. It may be appreciated from the chart enclosed herewith vide Annexure-5 that the said kind of transactions are also done in the subsequent years. Your good self will find that the assessee has benefited from the swap transactions as and when the value of rupee increases more particularly in the F.Y. 2014-15. In this regard, AS-1- Disclosure of Accounting Policies issued by ICA! is worth noting, the relevant para of the same is reproduced herein under: 17. For this purpose, the major considerations governing the selection and application of accounting policies are:- a. Prudence In view of the uncertainty attached to future events, profits are not anticipated but ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onclusion for reasons to be given that said system does not reflect true and correct profits - Held, yes -Whether an enterprise has to report outstanding liability relating to import of raw material using closing rate of foreign exchange and any difference, loss or gain, arising on conversion of said liability at closing rate should be recognized in profit and loss account for reporting period - Held, yes." .... .... 1.4 In view of above discussion, it is abundantly clear that the assesses company has recognized marked to market loss on principal only swap transactions with a view to comply with requirement of Accounting Standard 11 to arrive and true and fair commercial profit for the year under consideration. Further, on perusal of details submitted herein above, it is evident that the assessee company has been consistently following the said method of accounting. To put things into perspective, we submit that rate of interest on Rupee terms loans is very high as compared to Foreign currency denominated loan on account lower rate of interest prevailing in globally compared to India. As mentioned in para 1.2 hereinabove, the assessee company has reduced ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... standard 11. The assessee company has further contended that the said M2M loss is not in the nature of notional loss. The assessee company has relied upon the decision of the Hon'ble Supreme Court in the case of CIT V/s. Woodward Governor India Pvt. Ltd. The above submission of the assessee company has been duly gone through. The contentions of the assessee company are not tenable. It has not explained with supporting evidences whether the loss on account of forex derivatives (M2M toss on currency swap) is on principle amount or interest amount. Therefore, the assessee has not explained the exact nature of said losses. Further, on legal ground also, the claim of the assessee company is not allowable. Under Indian Income tax Act, there is no special provision or treatment for M2M method of accounting. It is governed by general principles of taxation based upon various judicial decisions. Loss or gain arises only when something goes out of one's pocket or something goes into one's pocket. There is no actual loss on account of dealing in forex derivatives (currency swap) until their final values are known. Therefore, the assessee's claim of M2M losses amounting to Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence amount arisen out on date of balance sheet. The Instruction No.03/2010 dated 23/03/2010 of CBDT does not allow such notional losses. The assessee company itself has admitted that it has recognized M2M loss on principle only swap transactions with a view to comply with requirement of accounting standard 11, which clearly shows that, it has actually not suffered the said losses. The assessee has cited AS-11 in his support which advises that all foreign currency monetary transactions are to be reported based on the closing exchange rate at the end of this accounting period. The said standard may be valuable for enforcing prudent disclosure norm. However, it is well settled that a good accounting standard need not be a good law and the former cannot be override the later as it lacks statutory force, unless notified under section 145(2) of the Act. Thus, while the assessee is at liberty to follow it in its books, for Income Tax purposes it ought to have added back the contingent liability to its taxable profit and therefore the notional loss is liable to be disallowed." For the reasons given above, the Assessing Officer held that the foreign exchange derivative losses a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the appellant company. The appellant further submits that the sole purpose for entering into the derivative contracts in question was to effectuate reduction in the higher rate of interest of 11.75% on rupee loan of Rs.500 crores obtained by the appellant for the acquisition of fixed assets. To substantiate the said contention the appellant submits the details of reduction in interest costs due to swap contract during the period commencing from A.Y. 2012-13 to A.Y. 2017-18: Particulars Reduction in interest liability A.Y. 2012-13 3,89,91,215 A.Y. 2013-14 8,39,57,936 A.Y. 2014-15 9,73,66,902 A.Y. 2015-16 11,36,68,981 A.Y. 2016-17 6,47,92,330 A.Y. 2017-18 21,51,98,327 Total 61,39,75,691 4. It is apparent from the above details that the appellant company has reduced the interest liability to the extent of Rs. 61,39,75,691/- by entering into the swap contract. Thus, it is evident that the swap contracts were entered solely for the purpose of business with a view to reduce the appellant's interest expenditure on the rupee term loan and therefore loss pursuant to such contract is allowable u/s 37 of the Act. As stated supra,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing contingent loss and unascertainable loss hence cannot be allowed as revenue loss in current assessment year. The AO has also relied upon instruction no 3/2010 dated 23/03/2013 wherein CBDT has considered such loss as notional loss. The AO has held that decision of CIT v/s Woodward Governor India Pvt Limited is not applicable because in said case, department taxed accrued foreign exchange gain but denied foreign exchange loss on Balance Sheet date. Thus, he made disallowance of Rs 32,50,27,494 treating it as contingent liability. During the course of appellate hearing, ARs of the appellant has mainly relied upon submission as filed before AO and contended that transactions have been carried out to reduce interest saving over a period and also submitted tabular chart showing that appellant company has reduced its interest cost by making Swap Transactions. The appellant has a/so drawn attention to the fact that it has consistently followed same accounting policy to provide M2M losses/gain in subsequent financial years and even M2M gains have been offered to tax. The ARs of the appellant has also argued that treatment given by it to provide for M2M loss is as per AS 1 as w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ILE SYSTEM OF ACCOUNTING - WHAT IS DUE BROUGHT INTO CREDIT BEFORE ACTUAL RECEIPT - LIABILITY INCURRED BROUGHT INTO DEBIT BEFORE ACTUALLY DISBURSED. METHOD OF ACCOUNTING - FOLLOWED BY ASSESSEE CONTINUOUSLY - BINDING ON ASSESSING OFFICER - UNLESS ASSESSING OFFICER FINDS THAT SYSTEM FOLLOWED DOES NOT REFLECT TRUE PROFITS. STOCK-IN-TRADE - NATURE OF - IS AN ASSET CLOSING STOCK - VALUATION. WORDS AND PHRASES - "ANY EXPENDITURE", "PROFITS", MEANINGS OF. "Loss" suffered by the assessee on account of fluctuation in the rate of foreign exchange as on the date of the balance-sheet IS AN ITEM OF EXPENDITURE under section 37(1) of the Income-tax Act, 1961. Decision of the Delhi High Court in CIT v. Woodward Governor India P. Ltd. [2007] 294 ITR 451 affirmed. For valuing the closing stock at the end of a particular year, the value prevailing on the last date is relevant. This is because profit/losses embedded in the closing stock. While anticipated loss is taken into account, anticipated profit in the shape of appreciated value of the closing stock is not brought into account, as no prudent trader would care to show increase in profits befor....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... submitted tabular chart(supra) in its written submission which show that from AY 2015-16 to 2017-18, appellant has earned M2M gain for Rs 94.37 crore and such gain has been offered to tax. 4.6 It is observed that Hon'ble Ahmedabad ITAT in the case of Adani Enterprises Limited 55 Taxmann.com 375(2015), group case of appellant has held that "Where assessee company has entered into currency swap contracts for working capital loans which was pre-requisite for its business of export and import of commodities, loss incurred in said contract being in respect of circulating/working capital is allowable business loss". It is also observed that on this very issue, Hon'ble Ahmedabad ITAT in the case of Heavy Metal and Tubes Limited in ITA No 1951/Ahd/2011 dated 30/06/2014 decided the issue in favour of assessee. In the said case, farts are that Assessee has claimed loss on account of foreign exchange derivative amounting to Rs. 5,89,29,812/-. It was assessee's submission that it had availed foreign currency loan for importing raw materials and it had shifted its loan liability in dollar to Swiss Franc and the loss resulted due to fall in the value of Swiss Franc vis-a-vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Swiss Frank currency was that the Swiss Frank is considered as one of the most stable currency as compared to Dollar and accordingly, the loss, if any on account of foreign exchange fluctuation can be minimized. However, there was fall in the value of Swiss Frank vis-a-vis Dollar and on the balance sheet date i.e. 31-03-2008, the appellant company booked the loss of Rs. 5,89,29,812/-. This facts have not been disputed by the A. O. 8.2 It is further submitted by the authorized representative of the appellant company that as per the consistent prudent practice and requirements of Accounting Standards issued by the ICAI, it follows accounting of transactions for purchase & Sales in foreign currency at the prevailing foreign exchange rate at the time of executing transactions and difference if any between the amount of purchase/sales and amount at which the transactions is actually settled by the payment to/from suppliers/debtors is accounted as "Loss/Gain on foreign exchange fluctuation". In the Trading & Profit & Loss Account, the Purchase and sales are disclosed after set off on account of the Loss or Gain due to fluctuation in rates of foreign exchange on account of transa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted that in the subsequent year i.e. Financial Year 2008-09 relevant to A.Y.2009-10 on settlement of the said 2 forward contracts, there was a gain of Rs. 1,96,26,2847- which is credited to the Profit & Loss A/c and shown as business income in the financial year relevant to A.Y.2009-10. Hence, the net foreign currency derivative loss is of Rs.3,93,03,528/- (Rs.5,89,29,812/- Less Rs.1,96,26,284/-). 8.5 The appellant company made the transactions of import purchase of raw materials and export sales of manufactured goods in the normal course of business. The liability for payment to suppliers for import purchase in foreign exchange is subject to risk of losses on account of fluctuation in exchange rate of foreign currency. To safe guard against such losses and to hedge against the unforeseen future loss due to fluctuation in rate of foreign exchange transactions of purchase & sales company makes the forward contract in the normal course of business to buy/sell the foreign exchange as per the market condition and advice of the bank. Thus, losses incurred in forward contracts for foreign exchange in the normal course of business are not speculative transactions and similar the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gly, gets the relief of Rs. 5,89,29,812/-." The Hon'ble Ahmedabad ITAT relying on decision of CIT(A) referred supra has held as under- "11. We have heard the rival submissions and perused the material on record. It is an undisputed fact, that the Assessee is engaged in the business of manufacturing Tubes and Pipes. From the copy of the balance sheet placed on record it is seen that the approximately 90% of the material consumed is from import purchases. It is also a fact that Assessee has availed financial facilities from its bankers for purchase of raw material. We find that CIT(A) while allowing the appeal of we Assessee has given a finding that the dealing of Assessee in foreign exchange was in the normal course of business and to safeguard the future losses against foreign exchange rate fluctuations it had entered into hedging transaction. He has further noted that the loss incurred by the Assessee on account of foreign exchange hedging transactions in forward contracts was backed by the trading liability on account of import purchases and therefore the loss was revenue in nature and was not a speculative loss. He is further given a finding that the loss f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eliance was placed on decision of Hon'ble Supreme Court in the case of Woodward Governor. 4.7. It is also observed that Hon'ble Ahmedabad ITAT in the case of DCIT Vs Elitecore Technologies Pvt Limited In ITA No 197 and 508/Ahd/2016 dated 31/03/2017 considered Instruction No 3/2010 relied upon by AC and held as under:- "22. So far as this grievance of the assessee is concerned, the relevant material facts are like this. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has shown foreign exchange difference income of Rs 1,12,55,515 under the head "Other Income" but when he probed the matter further, he found that this amount of Rs 1,12,55,515 has been worked cut after allowing a set off of foreign exchange difference loss of Rs.71,22,045. It was explained by the assessee that all the forward contracts are with respect to exports, that these contracts are entered into on the basis of soot rates plus premium element, that, in terms of the requirements of AS-11, the exposure to such contracts is required to be evaluated on the basis of difference in the foreign exchange rates at the year ending vis-a-vis forei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le in computation of business profits, observed as follows: ..................... 25. In the present case also, the assessee is consistently following the mercantile method of accounting, the same accounting treatment for the foreign exchange losses and gains has been given by the assessee all along, the assessee is making entries in respect of such losses and gains, and the treatment is consistent with the Accounting Standards. As a matter of fact, the Assessing Officer has not even raised any issues with respect to the above. His case is confined to the loss being notional in nature and contrary to the CBDT guidelines, but then, in the same breath, he taxes the gains on foreign exchange which are computed on the same basis. If losses are held to be notional, even the gains must be held notional too. However, this aspect of the matter is conveniently ignored. As a matter of fact, it was somewhat similar situation in the case before Hon'ble Supreme Court and Their Lordships could not-help remarking that "it may be stated that there is no dispute that in the previous years whenever the dollar rate stood reduced, the Department had taxed the gains which accrued ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es even after instruction no. 3 of 2010. (i) Decision of Hon'ble Hyderabad ITAT in case of VST Industries Ltd vs Addl. CIT vide ITA No.647/Hyd/2012 dated 23/08/2013 (ii) Decision of Hon'ble Bangalore ITAT in case of Subex Ltd vs DCIT (68 taxmann.com 233) dated 18/03/2016 (iii Decision of Hon'ble Bangalore ITAT in case of Quality Engineering & Software Technologies (P.) Ltd. vs DCIT (52 taxmann.com 515) dated 14/11/201 4 (iv) Decision of Hon'ble Mumbai ITAT in case of Reliance Industries Limited vs CIT (40 taxmann.com 431) dated 20/1 1/2013 Considering the facts discussed herein above and relying upon the decisions referred supra including decisions of Hon'ble Jurisdictional ITAT and High court, disallowance of loss of Rs 32,50,27,494/- made by AO is deleted. This ground of appeal is allowed." 8.5 We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. The learned DR in support of the Revenue's case on this issue has mainly relied on the order of the Assessing Officer. The learned Counsel for the assessee, on the other hand, has contended that this issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Revenue's appeal. 9. Next issue raised in Ground No.4 relates to the deletion by the learned CIT(A) of the addition of Rs.3,23,926/- made by the Assessing Officer on account of excess depreciation allegedly claimed by the assessee on office equipment. 9.1 As noted by the Assessing Officer from the depreciation chart furnished by the assessee, depreciation at the rate of 15% was claimed by the assessee on office equipment. Since the office equipment was eligible for depreciation at the rate of 10%, the assessee-company was called upon by the Assessing Officer to offer its explanation in the matter. In reply, it was explained by the assessee that all the relevant equipment such as CCTV, EPBAX, water cooler, air conditioners etc. were installed at site and the same being an integral part of the plant and machinery, depreciation @ 15% was claimed. In support of its contention, reliance inter alia was placed by the assessee on the decision of the Ahmedabad Bench of ITAT in the case of Madhu Industries Vs. ITO, [2010] 132 TTJ 233 (Ahd.) wherein it was held that electrical installation being an integral part of plant and machinery was eligible for higher rate of depreciation under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or computer including computer software was prescribed at 60% and the "computer software" was defined to mean any computer program recorded on any disc, tape, perforated media or other information storage device. The Assessing Officer did not find this explanation of the assessee to be acceptable. According to him, the rate of depreciation on intangible assets and licences was prescribed at 25% with effect from 01.04.1999 as per Section 32 of the Act as amended by the Finance Act, 1998 and the assessee-company, therefore, was entitled to depreciation only @ 25% on computer software. He accordingly restricted the claim of the assessee for depreciation @ 25% and disallowed the excess depreciation of Rs.3,55,446/- allegedly claimed by the assessee. On appeal, the learned CIT(A) deleted the addition made by the Assessing Officer on this issue and allowed the claim of the assessee for depreciation @ 60% on computer software for the following reasons given in paragraph Nos. 7.3 & 7.4 of his impugned order:- "7.3 I have carefully considered the Assessment Order and the submissions made by the Appellant. The Assessing Officer has observed that Appellant has claimed depreciation on....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "1. Section 32 of the Income Tax Act, 1961 - Depreciation - Allowance/Rate of (Computer Software) - Assessment Year 2009-10 - Whether expenditure incurred on software licence valid for long term was a part and parcel of computer system and , thus, it was eligible for depreciation at higher rate of 60 per cent - Held, yes [para 15] [In favour of assessee]" Considering the facts discussed herein above and relying upon decisions referred supra, disallowance made by AO for Rs.3,55,446/- is deleted. This ground of appeal is allowed." 10.2 We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. It is observed that the claim of the assessee for depreciation @ 60% on computer software has been allowed by the CIT(A) vide his impugned order by relying on the decisions of Co-ordinate Bench of this Tribunal in the cases of M/s. Voltamp Transformers Ltd (supra) and Zydus Infrastructure (P) Ltd (supra), wherein a similar issue has been decided by the Tribunal in favour of the assessee. At the time of hearing, learned DR has not cited any case law which is in favour of the Revenue on this issue. We, therefore, respect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmit any material on record to ascertain the nature of said transactions. Further, it is also not clear, as for what these payments were made. In the given circumstances, the amount of Rs.1,71,60,343/- being exchange rate difference (net) is liable to be disallowed in the want of proper supporting and explanation." 11.2 On appeal, the learned CIT(A) confirmed the disallowance made by the Assessing Officer for the following reasons given in paragraph No.5.5 of his order:- "On careful consideration of entire facts, it is observed that in notes forming part of Audited Annual Accounts accounting policy related to Foreign Currency Translation, which has been consistently followed by the Appellant is mentioned. Further, the Appellant has submitted that as per the accounting policy, foreign exchange difference relating to capital asset for Rs.2485.20 lacs is capitalized under cost of fixed assets in books of accounts during the year (though for claiming depreciation as per Income Tax, only realized loss of Rs.68,34,130/- is considered which is evident from Annexure 2 of Tax Audit Report) and balance exchange difference for Rs.171.60 lacs is recognized in P&L Account. The appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appeal is accordingly treated as partly allowed. 12. At the time of hearing before us, the learned Counsel for the assessee has not pressed Ground No.2 raised in the appeal of the assessee relating to disallowance of Rs.34,940/- made by the Assessing Officer and confirmed by the learned CIT(A) under Section 35D of the Act. The same is accordingly dismissed as not pressed. 13. In the result, the appeal of the Revenue for AY 2012-13 is dismissed while the appeal of the assessee for AY 2012-13 is treated as partly allowed. 14. Now we take up the appeal of the Revenue for AY 2013-14 being ITA No.1792/Ahd/2018, along with Cross Objection filed by the assessee being CO No. 89/Ahd/2019, which is directed against the order of learned CIT(A)-5, Ahmedabad dated 30.05.2018. 15. Ground No.1.1 of the Revenue's appeal for Assessment Year 2013-14 and Ground No.1 of the assessee's Cross Objection for Assessment Year 2013-14 relates to the disallowance of Rs.73,46,940/- made by the Assessing Officer under Section 14A r.w. Rule 8D while computing the total income of the assessee under the normal provisions of the Act which is sustained by the learned CIT(A) to the extent of Rs.6,83,250/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for AY 2013-14 is accordingly dismissed while Ground No.1 of the Cross Objection of the assessee for AY 2013-14 is partly allowed. 16. As regards the issue involved in Ground No.1.2 of the Revenue's appeal for AY 2013-14 relating to the deletion by the learned CIT(A) of the addition of Rs.73,46,940/- made by the Assessing Officer on account of disallowance under Section 14A while computing the book profit under Section 115JB of the Act, it is observed that the disallowance made by the Assessing Officer under Section 14A while computing the book profit of the assessee-company under Section 115JB was deleted by the learned CIT(A) by relying on various judicial pronouncements cited on behalf of the assessee. In this regard, it is noted that a similar issue is decided by the Coordinate bench of this Tribunal in the case of M/s. Mazda Limited Vs. DCIT vide its order dated 15.07.2019 passed in ITA Nos. 3075 and 3338/Ahd/2015 vide paragraph Nos. 11 to 11.5 as under:- "11.1 We also note that in the recent judgment of Special Bench of Hon'ble Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. reported in 82 Taxmann.com 415 has held that the disallowances made u/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....applied to the provision of Sec. 115JB of the Act as per the direction of the Hon'ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. (Supra). 11.5 Now the question arises to determine the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. In this regard, we also note that there is no mechanism given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/determine the disallowance. Therefore in the given facts &circumstances, we feel that adhoc disallowance will service the justice to the Revenue and assessee. We, therefore, are directing for the ad-hoc disallowance to avoid the multiple proceedings and unnecessary litigation. Thus we direct the AO to make the disallowance at 1% of the exempted income as discussed above under clause (f) to Explanation-1 of Sec. 115JB of the Act. We also find to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. But now we note that there is no mechanism provided under the clause (f) to Explanati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a higher rate of 15% on office equipment and dismiss Ground No.3 of the Revenue's appeal for AY 2013-14. 19. As regards the issue involved in Ground No.4 of the Revenue's appeal for AY 2013-14 relating to the deletion by the learned CIT(A) of the addition of Rs.6,98,675/- made by the Assessing Officer on account of excess claim of depreciation on computer software, it is observed that the same is similar to Ground No.5 of the Revenue's appeal for AY 2012-13 which has been already decided by us in the foregoing portion of this order. Following our conclusion drawn on the similar issue for AY 2012-13, we uphold the impugned order of the learned CIT(A) allowing the claim of the assessee for depreciation @ 60% on computer software and dismiss Ground No.4 of the Revenue's appeal for AY 2013-14. 20. As regards the issue involved in Ground No.5 of the Revenue's appeal for AY 2013-14 relating to the deletion by the learned CIT(A) of the addition of Rs.7,93,042/- made by the Assessing Officer on account of penalty paid by the assessee to the Ministry of Railways as compensation for overloading of cargo in railway racks, it is observed that this issue is squarely covered in favour of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the building. Ground No.3 of the assessee's Cross Objection for AY 2013-14 is accordingly dismissed. 23. In the result, the appeal of the Revenue for AY 2013-14 and CO of the assessee for AY 2013-14 are treated as partly allowed. 24. Now we take up the appeal of the Revenue for AY 2014-15 being ITA No.2045/Ahd/2018, along with Cross Objection filed by the assessee being CO No. 88/Ahd/2019, which is directed against the order of learned CIT(A)-1, Ahmedabad dated 26.07.2018. 25. As regards the issue involved in Ground No.1 of the Revenue's appeal for AY 2014-15 relating to disallowance of Rs.94,04,070/- made by the Assessing Officer under Section 14A r.w. Rule 8D while computing the total income of the assessee under the normal provisions of the Act which is sustained by the learned CIT(A) to the extent of Rs.8,66,500/-, it is observed that the same is similar to Ground No.1.1 of the Revenue's appeal for AY 2013-14 which has been already decided by us in the foregoing portion of this order. Following our conclusion drawn on the similar issue for AY 2013-14, we uphold the impugned order of the learned CIT(A) deleting the disallowance made by the Assessing Officer on account ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....made by the Assessing Officer on account of foreign exchange derivative loss. Ground No.4 of the Revenue's appeal for AY 2014-15 is dismissed. 29. As regards the issue involved in Ground No.5 of the Revenue's appeal for AY 2014-15 relating to the deletion by the learned CIT(A) of the addition of Rs.4,37,235/- made by the Assessing Officer on account of excess claim of depreciation on office equipment, it is observed that the same is similar to Ground No.4 of the Revenue's appeal for AY 2012-13 which has been already decided by us in the foregoing portion of this order. Following our conclusion drawn on the similar issue for AY 2012-13, we uphold the impugned order of the learned CIT(A) allowing the claim of the assessee for deprecation at a higher rate of 15% on office equipment and dismiss Ground No.5 of the Revenue's appeal for AY 2014-15. 30. With regard to the issue raised in Ground No.6 of the Revenue's appeal for AY 2014-15 relating to the deletion by the learned CIT(A) of the addition of Rs.10,21,114/- made by the Assessing Officer on account of excess claim of depreciation on computer software, it is observed that the same is similar to Ground No.5 of the Revenue's ap....