TaxTMI 
TaxTMI 
2019 (2) TMI 2078
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....peals) was not justified in upholding the disallowance ignoring the submissions of the appellant giving full details about utilization of funds in making the investments. 2. (a) The learned Commissioner of Income tax (Appeals) erred in upholding the action of the learned Assistant Commissioner of Income tax (herein after referred to as "Assessing officer") in not allowing deduction under section 35D of Rs.60,00,150/-by holding that it pertains to Steel Division which was sold during the financial year 2000- 2001. (b) The appellant submits that the learned Commissioner of Income-tax (Appeals) ought to have directed the Assessing Officer to allow deduction under section 35D in respect of sum of Rs.60,00,150/- pertaining to steel division, in accordance with the provisions of aforesaid section as there is no prohibition, in the Act, on allowance of aforesaid deduction in case a division is transferred and no deduction is allowable to the transferee. (c) The learned Commissioner of Income-tax (Appeals) erred in holding that the appellant has not stated full facts which is contrary to the submissions made that in the case of the appellant the undertaking was transferred as a slump....
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....wance of Rs.3,21,73,680/- under section 14A; b) to allow deduction under section 35D of Rs.60,00,150/-; c) to delete the addition made by determining annual value of the property at a higher amount as against Rs.2,89,000/-; d) to allow loss of Rs 6,89,82,716/- by treating issue of Bonds against units of US-64 as 'transfer'; e) to allow deduction under section 80HHC on Export Incentives used for its own consumption; and to modify the assessment in accordance with the provisions of the Act. 7. Each of the above grounds of appeal are independent and without prejudice to each other. 3. The grounds raised in the cross objection by the Revenue are as under: 1. The CIT(A) has erred in taking the rental income at 12% of the cost of land and building, which will not change over the years and have its effect in future years. 2. The CIT(A) has erred in not taking the annual value of the property as per section 22 and 23 of the I.T. Income Tax Act, 1961, that the annual value of the property is a sum which may be expected to be let out from year to year basis. 4. At the outset, it is noted that this is a delay of 3127 days (8 years 7 months & 21 days) in filing the cros....
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..... There is no reason given what caused the delay in filing he cross objections. Change of view by I.T. Department on a point of law cannot be a reason for delay in filing cross objections. Change of view by I. T. Department on a point of law cannot be a reason for delay in filing cross objections. 3. The same issue was raised in assessment years from A.Y. 1994-95 to A.Y. 1996-97 (ITA NO. 2600/M/98, ITA No.257/M/99 & ITA No. 6269/M/99) and this Hon'ble Tribunal by its order dated 22-03-2007 has decided the point of annual letting value in favour of the respondent on the Appeals filed by the Assesse. The Income Tax Department who is the present Appellant had not even filed any Appeal against the order of CIT (Appeals). The same issue about the annual letting value had also come up in the following assessment years where this Hon'ble Tribunal followed its earlier orders. In none of those years Income Tax Department filed any Appeal or cross objections against the order of the CIT (Appeals). In subsequent years they have accepted the Order of the CIT (Appeals). 4. In fact, it was the Assesse who was aggrieved by the order of CIT (Appeals) and even when they lost before this....
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....opos ground relating to deduction u/s. 14A of the Act : 7. On this issue, the A.O. made a disallowance of Rs.3,21,73,680/- being disallowance for interest on funds used for making the investment for earning the tax free income. The A.O. disregarded the assessee's submissions that the assessee has sufficient interest free own funds. The A.O. rejected the contention by observing that the assessee has failed to prove the nexus between the interest free funds available and the investments made. Hence, the A.O. proceeded to conclude the disallowance of interest. 8. Upon the assessee's appeal, the ld. CIT(A) confirmed the A.O.'s action by holding that in earlier years the ld. CIT(A) has confirmed the similar addition. 9. Against this addition, the assessee is in appeal before us. 10. We have heard both the counsel and perused the records. The ld. Counsel of the assessee submitted that the issue is covered in favour of the assessee inasmuch as the ITAT in its order for A.Y. 2005-06 in assessee's own case has directed to work out a disallowance u/s. 14A without applying Rule 8D. We find that this argument of the ld. Counsel of the assessee is misplaced inasmuch as the issue before the....
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....commenced or as the case may be the previous year in which the extension of the undertaking is completed or the new unit commenced production or operation. The past history of the assessee was that there is no dispute insofar as the eligibility criteria of the assessee is concerned. The preliminary expenses were incurred by the assessee in assessment year 1996-97, which was the first year of the claim of 1/10th of the expenditure. Since then 1/10th was claimed and allowed till assessment year 2001-2002. The impugned assessment year, i.e., M/s. Raymond Limited. assessment year 2005-2006 is the last assessment year, i.e., the tenth year of claim of deduction, which has been denied since the Steel Unit has been sold by the assessee. On a perusal of section 35D shows that the Act is silent in the case when a unit is sold. Section 35D(5) of the Act refers to the transfer before the expiry of the period of 10 years to another Indian company in a scheme of amalgamation and section 35D(5A) refers to the transfer before the expiry of the period in a scheme of demerger. There is no clause in the section which debars the assessee from claiming the expenses as a write off on sale of the undert....
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....de during the proceedings:- (a) The J.K. House property let out by the assessee company is located in posh commercial area at warden road. (b) M/s. Pashmina Holdings Ltd to whom 23367 sq. ft. have been let out, is a fully owned subsidiary company of the assessee & JK trust to whom 18325 Sq ft is also the trust in which the directors of the company are trustee. The A.O. further noted that the assessee company during the assessment proceeding has taken the following contentions:- (i) the actual rent received from the above mentioned tenants in this year is more than the Municipal Rateables value of Rs.1,05,275/-, hence, the income under the head House Property has to be computed on the basis of actual rent received. (ii) In the preceding years CIT(A) has taken stand that rental income can not be taken at market rent. (iii) Alternatively, it income may be determined based on orders CIT(A) in earlier. The A.O. referred to the provision of section 23 and also noted that several case laws has the comparability with the Central Government quarters at Belvedere and concluded as under: In view of the finding given above and also discussed in detail in the order, it is evident ....
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...., it is seen that this issue has already been decided by the CIT(A). I am in agreement with the same. I, therefore, direct the Assessing Officer to compute the Annual Value with reference to the Standard Rent of the property determinable as per relevant provisions of the Rent Act and modify the assessment accordingly. 14. Against the above order, the assessee has filed appeal before us. 15. The Revenue has also filed the cross objection agitating that determining the annual value @ 12% of the cost of land and building shall mean that the same annual value shall remain for eternity as the cost of the land and building will never change. 16. We find that the Revenue's cross objection is delayed and the assessee has vehemently argued that the deletion should not be condoned, as there is no reasonable cause for the delay. We find that on this issue, the assessee has made the following submissions: In the assesse' s own appeal for A.Y. 1995-96 the CIT (A) has held to determine the annual value of the property @ 12% of the cost of land & building and dismissed the ground of Assessee. Said Judgment is confirmed as well as followed by ITAT from A.Y. 1994-95 to A.Y. 2001-02, A.Y.....
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....rty can be Rs.2,56,41,066/-. The ld. CIT(A) on the other hand directed the A.O. to compute the annual value of the property with reference to the standard rate of the property determinable as per the relevant provisions of the Rent Act and modify the A.O.'s order accordingly. In this regard, the assessee's contention is that the direction should be given in accordance with the earlier year ITAT order that the annual value of the property should be 12% of the cost and the land and building. In this regard, we note that it is the plea of the Revenue that making an annual value as a percentage of the cost of the land and building forever will lead to annual value fixed for eternity which can never be permitted. We find that the ITAT earlier had confirmed the same direction. The matter is already before the Hon'ble Jurisdictional High Court. We do not find any cogent reason to depart from the earlier order of the Tribunal in the assessee's own case. Hence, we follow the same and direct that the ITAT's order in assessee's own case on this issue be followed, as the same has not been reversed by the Hon'ble Jurisdictional High Court. The Revenue's cross objection in this regard i....
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....mount which bears to ninety per cent, of any sum referred to in clause (iiid) (ie Profit on transfer Duty Entitlement Pass Book scheme) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, only if, the assessee has necessary and sufficient evidence to prove that:- a) He had an option to choose either the duty draw back or the Duty Entitlement Pass Book scheme, being the duty remission scheme; and b) The rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the duty Entitlement Pass Book, being the Duty Remission Scheme: During the assessment proceedings, the assessee company was asked to furnish the evidences to prove that the conditions laid down under the above proviso have been fulfilled. 24. The A.O. further observed that the assessee has made the following submissions: (i) The DEPB scheme came into effect from April, 1997 and replaced a number of other schemes for duty free imports for export production. The purpose of the DEPB scheme was to give customs duty credit entitlement at a predetermined rate so that exporters might know before han....
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....he profit on transfer of DEPB is covered in clause (iiid) of section 28. In view of the above, as the assessee has failed to satisfy the conditions laid down under 3rd proviso to sub section (3) of section 80 HHC, hence, the deduction on the DEPB certificates claimed by the assessee is not allowable. Further, the assessee also failed to furnish any evidences to prove that the premium on sale of licenses are eligible for deduction as per proviso to the section, thus the same is the receipt of the nature of income of which 90% to be excluded for working out the " Profit of business" but not eligible for deduction u/s 80 HHC 26. Upon the assessee's appeal, the ld. CIT(A) confirmed the A.O.'s action. 27. Against the above order, the assessee is in appeal before us. 28. We have heard both the counsel and perused the records. The ld. Counsel of the assessee stated that this issue is covered in favour of the assessee by ITAT order for A.Y. 2003-04 vide order dated 21.06.2017 and Topman Exports vs. CIT [2012] 342 ITR 49 (SC). We find that the ITAT in the above referred order has held as under: 16. We have heard the rival contentions of both the parties. Looking to the facts and circ....