TaxTMI 
TaxTMI 
2015 (1) TMI 1489
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....r commodities in bulk. Its main activities are import and export of various bulk commodities such as minerals , iron, ore, gold, agro, fertilizers, coal and Hydrocarbons, non ferrous metals. The assesese filed its return of income declaring total income of Rs. 1,56,41,84,500/- which was revised to Rs. 1,52,83,87,626/-. The assessment was completed at total income of Rs. 1,58,39,19,146/- after making disallowance u/s 14A, Rs. 2,86,93,520/- , disallowance of licence fee Rs. 5 lacs, Addition on account of duty entitlement passbook credit Rs. 2,63,38,000/-. The assessee preferred appeal before Ld. CIT(A) who partly allowed the assessee's appeal. Being aggrieved with the order of Ld. CIT(A) both assessee and department are in appeal before us. 3. Ld. Counsel for the assessee referred to the petition filed by assessee for admission of additional ground of appeal under rule 11 of the Income Tax Appellate Rules 1963 which reads as under :- "1. That the assessing officer erred on facts and in law in not allowing credit for corporate taxes paid by MMTC Transnational Pte. Ltd. (MTPL), Singapore, to the extent of dividends received by appellant from MTPL in India." 4. Ld. Counse....
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....aran (1987) 163 ITR 6802, which in turn relies upon three decisions of the Supreme Court in CIT vs. McMilan and Co. (1958) 33 ITR 182: Hukumchand Mills Ltd. vs. CIT (1967) 63 ITR 232 and CIT vs. Mahalakshmi Textile Mills Ltd. (1967) 66 ITR 710, we answer the question of law in the affirmative, in favour of the assessee and against the revenue and remand the matter to the file of the Assessing Officer to determine the claim of the assessee on merits." 5. Ld. Counsel also relied on the decision of Hon'ble Kerala High Court in the case of CIT vs. Kerala State Co-operative Marketing Federation Ltd. 193 ITR 624 wherein it has been held as under :- "Following the decisions of the Supreme Court cited above and agreeing with the view expressed by the Madras High Court in Brahadeeswaran;s case (1987) 163 ITR 680, we hold that an appellant before the Tribunal could raise any new or additional point for the first time in appeal before the Tribunal even though it had not been raised in any form either before the assessing authority or before the Commissioner of Income-tax(Appeals). We further hold that when once any such new or additional ground is raised before the Tribunal, they ....
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....case of CIT vs. SA Builders 93 DTR 256 and pointed out that scope of section 254 has been considered in para 12 of this decision. He pointed out that in the present case factual foundation has not been laid down before the AO and relevant facts are not on record. Therefore, this ground should not be admitted. Ld. Counsel in the rejoinder submitted that there is no malafide in filing the ground . Ld. Counsel referred to paper book page No. 17 wherein the details of investments made in subsidiary company are contained to demonstrate that assessee was holding 1461502 equity shares in the subsidiary company. He submitted that the details of dividend received are also on record. Therefore, only credit of taxes paid outside Indian on the dividend income of assesseee has to be allowed. He submitted that AO has to apply correct provisions to facts. 7. We have considered the rival submissions and have perused the record of appeal. It is well settled law that a legal claim can be advanced at any stage of proceeding. Therefore, we are not inclined to accept the submission of the Ld. CIT(DR) to reject the ground taken by assessee on the ground of laches. There is no quarrel with the submiss....
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....that the disallowance u/s 14A was correctly made by the AO in accordance with the provisions of Rules 1962. 3. On the facts and in the circumstances of the case and in law, the learned' CIT (Appeals) has erred in deleting the addition of Rs. 2,63,38,000/- made by the AO on account of non crediting of sum received as DEPB credit. 3.1 The Ld. CIT(A) ignored the fact that the addition has been correctly made by the AO in accordance with provisions of section 28(iii)(d) of the I.T. Act. 4. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs. 5,00,000/- made by the AO by treating the payment to CERC as annual license fees as capital expenditure. 4.1 The Ld. CIT(A) ignored the fact that the assesee shall be deriving long term benefit by obtaining license and also the fact that the asset in question has yet to become operational. 5. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in directing the AO to allow claim of the assesee of Rs. 1,92,58,404/- on account of waiver penalty for astt. Year 1988-89 and asstt. year 2000-....
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....supra) and also after taking into consideration the decision in its own case for asstt. Year 1993-94. 11. In the result this ground of assessee as well as grounds raised by department on this issue are allowed for statistical purposes. Ground No. 3 of Departmental Appeal reads as under :- 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition of Rs. 2,63,38,000/- made by the AO on account of non crediting of sum received as DEPB credit. 12. Brief facts apropos ground No. 3 are that AO noticed that during the year under consideration, the assessee had received DEPB credit of Rs. 2,63,38,000/- but had not shown as its income. The AO observed that assessee in its reply submitted that the details of DEPB credit of Rs. 2,63,38,000/- as on 31.3.2006 represents duty entitlement passbook which is available for imports at cheaper / lower rates of custom duty as a consequence to export out of India. The assessee submitted that DEPB credits are sold in the open market and the receipt out of this auction is transferred to their associates NINL keeping 3% as profit. In support of its contention the assessee ....
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....of the AO for reconsideration of this issue. 16. Facts apropos Ground No. 4 are that assessee had claimed an amount of Rs. 5 lacs as expenditure towards annual fees of license issued by Central Electricity Regulatory Commission (CERC) for the period 1.4.2005 to 31.3. 2006. The AO required the assessee to explain as to why the said expenses be not disallowed. The assessee replied as under :- "the submissions of the assessee on this issue has been considered and since the license expenditure incurred by the assessee is actually an expenditure of a capital in nature and moreover, it relates to an activity which is yet to become operational and since it also pertains to an independent activity altogether, the expenditure claimed by the assessee company as revenue expenses is not allowable. However, the assessee is allowed to capitalize the same towards the windmill project. As the licence fees paid for a new unit being windmill unit which has not become operational, the same being preoperative expenditure is disallowed and added back to the total income of the assessee. Accordingly, Rs. 5 lacs is disallowed and added back to the total income of the assessee. Accordingly, Rs....
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....herefore, the total amount of Rs. 1,92,58,404/- was credited to the profit and loss account for financial year 2005-06 as miscellaneous receipts . Ld. CIT(A) noted that inadvertently the assessee company did not claim it as deduction in the computation of total income for the asstt. year under consideration. Ld. CTI(A), after considering the assessee's submissions and taking note of the decision of Hon'ble Supreme Court in the case of M/s. Goetze (India) Ltd. vs. CIT wherein it was, interalia , observed that the said decision did not impinge on the power of Tribunal in entertaining the claim for deduction advanced before it, concluded in para 6.6. as under :- "6.6. I have analyzed the facts of the present case in the light of the parameters laid down by the Hon'ble Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd. and the observations made by the Hon'ble Apex Court in the case of Jute Corporation of India Ltd. vs. CIT and the instructions given by the Central Board of Direct Tax on matters pertaining to assessments. On consideration, I find that the deduction on account of penalty was undisputedly allowable to the appellant company as neither the payment o....