TaxTMI 
TaxTMI 
2019 (2) TMI 2078
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....of its own and the learned Commissioner of Income-tax (Appeals) 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 mad....
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....reated as capital receipt. 6. The appellant submits that the Assessing Officer be directed: a) to delete the disallowance 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 proper....
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....ot explain an}' reason for the delay of 3129 days in filing the cross objections. The cross objections have to be filed within 30 days of the receipt of the Appeal and in the present case cross objections are hopelessly delayed. 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 ....
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..... Vs. ACIT Spl. Rg. 10(33), 1 8 Taxmann.com 287 (Mum) has dismissed the appeal on similar ground. The Bombay HC has admitted said appeal vide ITA No. 602 of 20 12 5. Deduction u/s 80HHC 6/13 Covered in favour of Assessee by ITAT order of A.Y. 2003-04. page 6 para 13 as per Topman Exports vs. CIT. 342 ITR 49 SC) Apropos 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. Th....
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....ld as under: 7.2 We have carefully perused the orders of the lower authorities. Section 35D of the Act relates to amortization of certain preliminary expenses whereby the assessee is allowed deduction of an amount equal to 1/10th of such expenditure for each of the ten successive previous years beginning with the previous year in which the business 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 35....
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....ame of concern to whom let out Area of the let out property Annual rent charged Rs. Rate Per Sq. Ft. (Rs.) 1. J.K. Trust, 1st to 4th floor of JK House 18325 Sq Ft 1,000 0.05 2 Pashmina Holdings Ltd, 5th to 12 Floors 23367 sq. ft. 2,88,000 12.32 The A.O. further observed that the following facts are noticed during the proceedings from the earlier records & submissions made 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 y....
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.... follows: (i) Annual Value cannot be based on market rent of the property. (ii) Municipal Value or accrual rent received, whichever is higher cannot be taken as a basis for determining annual value. (iii) Annual Value has to be determined with reference to the standard rent of the property determinable as per the relevant provisions of the Rent Act. In conformity with appellate order for A.Y. 1997-98 to 2000-01, the Assessing Officer is directed to modify the assessment order accordingly. " 11.1 From the above, 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.....
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....8-99. Following the decision of the Tribunal, the appeal of the assessee was dismissed. As the learned Senior Counsel has fairly conceded that since this issue has been decided against the assessee by the Tribunal, the same view should be taken. Respectfully following the finding of the co-ordinate bench in assessee's own case (supra) ground no.1 is dismissed. A reading of the above decisions and the pleadings of the ld. Counsel of the assessee and the submissions of the ld. DR shows that the A.O. has computed the annual value of the property at Rs.3,60,21,880/- and the income chargeable under the property 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 a....
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....duction u/s. 80HHC: 23. Brief facts on this issue are that the assessee has claimed deduction on DEPB. The A.O. observed that on perusal of audit report in form 10 CCAC it is noticed that the assessee company has claimed deduction under section 80 HHC on profit from DEPB amounting to Rs.2136.15 lacs and other export incentive i.e. Duty drawback of Rs 9.09 lakhs & 6.06 lakhs on premium on licenses, totaling to Rs.2151.30 lacs. The A.O. noted that the profit on DEPB are covered under 3rd proviso to section 80 HHC, As per the third proviso of section 80HHC of the Act, the profits computed u/s. 80HHC(3) shall be further increased by amount 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 du....
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....the Profit & loss account Even if we consider, the argument that the DEPB certificates were utilised in purchase of raw material etc, than also the entire amount of credit availed is "profit on transfer" on utilisation, as the credit can not be allowed without the transfer of DEPB certificates in favour of the Excise & custom authorities. Even other wise, the assessee it self in the statements of deduction filed with the return of income has claimed the deduction showing the DEPB amount of as export incentive only and in the audit report also the amount has been shown as export incentive only. The export incentives are included in the business profits under clause (iiia) to (iiie) of section 28. The 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....