TaxTMI 
TaxTMI 
2023 (7) TMI 555
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....4, declaring a total income of Rs. 767,94,11,530. In the revised return of income, the assessee claimed a deduction under section 80IA of the Act of Rs. 11,85,52,834, in respect of the profits of the Rail System. The return of income filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as under section 142(1) of the Act were issued and served on the assessee. The assessee is engaged in the production and sales of Chemicals, Cement, and Textiles, and the production of Sponge Iron, and Viscose Staple Fibre. The Assessing Officer ("AO"), vide order dated 28/01/2005, passed under section 143(3) of the Act, assessed the total income of the assessee at Rs. 812,27,65,519, after making certain additions/disallowances to the income declared by the assessee. The learned CIT(A), vide impugned order granted partial relief to the assessee. Being aggrieved, both, the assessee as well as the Revenue, are in appeal before us. 3. The assessee, in its appeal, has raised the following grounds:- "1. Disallowance under section 43B: 1.1 The CIT (A) erred in not allowing the amounts paid or written back during the previous year amounting ....
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....red in not following the decisions of the Jurisdictional High Court in the cases of Bangalore Clothing Co. (260 ITR 371) and Alfa Laval India Ltd. (133 Taxman 740). 4.8 The CIT(A) erred in holding that profits from sale of DEPB credits Rs. 5.82,12,856/- are not income directly derived from exports business and erred in directing the AO to reduce 90% of DEPB credits from profits of business. 4.9 The CIT (A) ought to have held that DEPB credit is derived from exports business and shouldn't be reduced from business profits for the purpose of calculation of deduction allowable u/s. 80 HHC. 5. Appropriation of Head Office expenses 5.1 The CIT(A) erred in confirming the AO's action in apportioning Head Office expenses and reducing the amount of allowable deduction u/s. 80-0. 5.2 The CIT(A) failed to appreciate that Head Office expenses cannot be reduced from receipts while computing allowable deduction u/s. 80-O. 5.3 Without prejudice to the above, the CIT(A) failed to appreciate that even if head office expenses are to be reduced from gross receipts for computing allowable deduction u/s. 80 O, such expenses can only be a cert....
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....e in preceding years. The relevant findings of the coordinate bench, in the aforesaid decision, are reproduced below:- "6. We find that a similar issue came up for consideration before the coordinate bench of the Tribunal in assessee's own case in Grasim Industries Ltd. v/s ACIT, in ITA no.4753/Mum./ 2004 and ITA no.5584/Mum./2004, for the assessment year 2002-03, wherein the coordinate bench, while dismissing the similar issue, following the earlier decision rendered in assessee's own case, observed as under:- "6. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02. While deciding the issue, the Coordinate Bench of the Tribunal in ITA. No. 4083/Mum./2003 dated 22.10.2014 held as under: - "2. Rival contentions have been heard and perused the record. The assessee is engaged in manufacturing and sale various products. During the course of scrutiny assessment, the A.O. disallowed assessee's claim of deduction u/s 43-8 of the Act in respect of liabilities disallowed in earlier years which are paid/written back in the current year. The A.....
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.... 9. The brief facts of the case pertaining to the issue, as emanating from the record, are: During the year under consideration, the assessee paid club membership fees of Rs. 7,70,244, towards Club Membership fees to various Clubs. During the assessment proceedings, on a perusal of the details, it was observed that the amount of Rs. 4,72,350, is paid to Otters Club for obtaining Life Membership. Accordingly, the assessee was asked as to why this payment should not be treated as capital expenditure. In response thereto, the assessee submitted that the payments have been made to the club for enrolling senior officials as members for the purpose of promoting the business of the assessee company. It was further submitted that such members meet various kind of people because of which they developed business relationships benefiting the assessee company. The assessee also submitted that in commercial work, the contact with right persons is vital for efficient business organization and, therefore, the expenditure should be allowed as business expenditure. The AO, vide order passed under section 143(3) of the Act, did not agree with the submissions of the assessee and held that the paymen....
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....he parties, we find that he aforesaid issue raised in the assessment year 1993-94 is covered in favour of the assessee by the decision of the jurisdictional High Court in Otis Elevator CO. (India) Ltd., v. CIT 195 ITR 682 (Bom.). Respectfully following the same, we dismiss the ground raised by the department." 13. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in ay 1993-94 is respectfully followed, accordingly, ground raised by the assessee is allowed." 12. The learned Departmental Representative ("learned DR") could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case and no change in the facts and law was alleged in the relevant assessment year. Therefore, respectfully following the judicial precedent in assessee's own case cited supra, we uphold the plea of the assessee and allow the Club Membership fees paid by the assessee." 12. In the present appeal, the learned Departmental Representative "learned DR") could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case. This issue is recurring in nature a....
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....similar issue has been dealt with by the Tribunal in A.Y. 1993-94 in ITA No. 1523/Mum/1997 vide para 62 as under;- "We have heard the parties and considered the rival submissions. These refunds have been granted to the assessee in the year under consideration and therefore they would partake the character of income of the assessee. If however, any refund has been found to be not refundable to the assessee and consequently the interest granted is withdrawn the same would not partake the character of income. We accordingly direct the Assessing Officer to reduce from the taxability of the aforesaid interest granted to the assessee, the amount which has been withdrawn subsequently. We direct accordingly." 8. It was argued by the Id. A.R. that benefit of interest so allowed by the department was subsequently withdrawn as a result of the appellate orders should be given to the assessee and the interest subsequently withdrawn should not be taxed and for this, reliance was placed on the decision of the Tribunal in the case of Avada Trading Co. (P.) Ltd. vs. ACIT (2006) 100 ITD 131. 9. We have considered the rival contentions. As far as the taxability of interest ....
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....coordinate bench of the Tribunal, vide order dated 13/06/2023, passed in assessee's own case for the assessment year 2003-04 cited supra, while deciding similar issue in favour of the assessee by following the decision rendered in the preceding year, observed as under:- "21. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of the Tribunal, vide order dated 14/12/2021, passed in assessee's own case for the assessment year 2002-03 cited supra, by following the decision rendered in the preceding year, observed as under:- "18. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "14. The next grievance of the assessee relates to allowing deduction u/s 80HHC of the Act with respect to interest income. The issue under consideration is squarely covered by the decision of Hon'ble Supreme Court in the c....
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....to section 80HHC of the Act. The learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case and no change in the facts and law was alleged in the relevant assessment year. Since in the present case, it is an accepted fact that interest paid during the year is Rs. 168.41 crore, while interest received is Rs. 39.33 crore, therefore, respectfully following the judicial precedence in assessee's own case cited supra, we uphold the plea of the assessee and allow grounds no.4.2 and 4.3, raised in assessee's appeal." 22. In the present case, it is not disputed that interest paid by the assessee during the year is Rs. 153.88 crore, while interest received by the assessee is Rs. 21.56 crore. Therefore, respectfully following the judicial precedent rendered in assessee's own case cited supra, we uphold the plea of the assessee and allow the ground no. 4.2 and 4.3, raised in assessee's appeal. 23. The issue arising in grounds no.4.4, raised in assessee's appeal, is pertaining to the reduction of rental income while calculating deduction under section 80HHC of the Act. 24. The brief facts of the case pertaining to the issue, as emanat....
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....al of the audited financial statements forming part of the paper book on Pages-75-76, we find that the assessee paid total rent of Rs. 8.39 crore, while it received a total rental income of Rs. 5.55 crore. Therefore, following the aforesaid decision rendered in assessee's own case, we uphold the plea of the assessee and allow ground no.4.4, raised in assessee's appeal. 27. The issue arising in grounds no.4.5, 4.6, and 4.7, raised in assessee's appeal is pertaining to the reduction of miscellaneous receipts from the profits of business while calculating the deduction under section 80HHC of the Act. 28. The brief facts of the case pertaining to the issue, as emanating from the record, are: During the assessment proceedings, the assessee submitted that the miscellaneous receipts of Rs. 11,24,95,218, should not be reduced from the profit of the business for computing deduction under section 80HHC of the Act. 29. The AO, vide assessment order, passed under section 143(3) of the Act, did not agree with the submissions of the assessee and reduced 90% of the miscellaneous receipts of Rs. 11,24,95,218, to the Profit & Loss Account for the purpose of computation of deduction under s....
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....arried out by the assessee and, therefore, should not be excluded while computing deduction under section 80HHC of the Act. In the Chart filed during the course of the hearing, the assessee provided the following details of these receipts:- 35. In respect of rebate on sales tax and refund of Mineral Area Development Cess, the assessee has placed reliance upon the decision of the Hon'ble Jurisdictional High Court in Alfa Laval India Ltd. v/s DCIT, [2003] 133 Taxman 740 (Bom.), wherein the Hon'ble Court held that interest income received from customers as well as sales tax set off cannot be excluded from business profit while calculating deduction under section 80HHC of the Act. Further, in respect of sundry balances written back, the assessee has placed reliance upon the decision of the coordinate bench of the Tribunal in DCIT v/s Gharda Chemicals Ltd., [2016] 71 taxmann.com 56 (Mumbai-Trib.), wherein the coordinate bench, inter-alia, held that registration charges written back cannot be excluded from the profit of the business for the purpose of computing deduction under section 80 HHC of the Act. Similarly, in respect of scrap sales and sale of empty cement bag, plastic b....
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.... categorised in various categories as noted above, however, it is evident that the Revenue has not examined the relation of such receipts with the business of the assessee. In this regard, it is pertinent to note that in CIT v/s Bangalore Clothing Co., [2003] 127 Taxman 637 (Bom.), the Hon'ble Jurisdictional High Court held that the AO has to ascertain whether the receipts were part of operational income and for that the Department will have to consider the Memorandum and Articles of Association of the company, nature of the business, nature of the activity and such other tests. The Hon'ble Court further held that just looking at the nomenclature without any further enquiry into the nature of the business, Explanation (baa) cannot be invoked, since the nomenclature may not be accurate. The relevant findings of the Hon'ble Jurisdictional High Court, in the aforesaid decision, are as under:- "8. We do not find any merit in the argument advanced on behalf of the Department. In this case, we are concerned with profits from business of exports of goods manufactured by the assessee. Therefore, the export profits were required to be computed in the ratio of export turnover to tot....
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.... Doshi & Co. (supra), the assessee had received Rs. 19.60 lakhs as service charges. It was held that the service charges of Rs. 19.60 lakhs did not have the element of turnover because the charges were received for a seasonal activity which was not an integral part of the manufacturing activity. Therefore, the test to be applied in all such matters is, whether interest, service charges, commission accrues out of the main business activity of the Company and whether they were Operational Income. The case of K.K. Doshi & Co. (supra) shows that service charges of Rs. 19.60 lakhs did not represent Operational Income and, therefore, it came within Explanation (baa). However, we find that the Department just looks at the nomenclature of the receipt and if it finds that the nomenclature is rent, interest, commission then without any further inquiry into the nature of business, the Department invokes Explanation (baa) which is not the purpose and the object of that Explanation. In the present case, the receipt in question is labour charges. However, this nomenclature may not be accurate. In the present case, the assessee is a manufacturer and exporter of garments. In the present case, the ....
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....ing income then it falls outside Explanation (baa). In the present case, the receipt accrued from manufacturing activity. The Tribunal has found that job processing activity was linked to the manufacturing activity of the assessee. In the circumstances, on facts, the judgments cited by the Department do not apply to this case. Lastly, we may point out that, in this case, there is no challenge to the findings of facts recorded by the Tribunal in relation to the processing activity forming part of the manufacturing activity of the assessee." 37. Therefore, in view of the above, before applying the ratio laid down by the aforesaid decisions, relied upon by the assessee, it is relevant to examine each and every receipt under the broad head of 'Miscellaneous Receipts' in light of the decision of the Hon'ble Jurisdictional High Court in Bangalore Clothing Co. (supra) and for this purpose, we remand this issue to the file of the AO for de novo adjudication. We further direct that if upon examination it is found that the receipt is having an element of turnover or arises out of the business operation of the assessee then the same cannot be excluded from the profit of the b....
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....ane landing charges 4,000 20. Earnest money forfeited 25,000 21. Liquidated damages 5,960,247 22. Commission on recurring deposit-post office 58,006 23. Cost of packing of durable tonner (829,388) 24. Toner rent & maintenance (333,447) 25. Recovered towards vehicle charges 79,104 26. Commission on Savings CTD Scheme 7,118 27. Toners Hydraulic testing & paint recovery 442,350 28. Rebate on franking machine 1,600 29. State environment award from MP Housinf & Environment Dept. 75,000 30. Provision written back 19,80,595 31. Deposit forfeited 909,167 32. Commission received against export 3,468 33. Commission on sale 205,325 34. Refund of duty / cess 75,000 35. Compensation / receipts / recovery from contractors / transporters 263,042 36. Stores due / notice pay / F&F-staff 178,078 37. Recovery of water & electricity charges 266,805 38. Despatch claim for loading 1,216,112 39. Scrap sales 39,47,033 40. Penalty income 6,41,902 41. Receipts against non-compliance / failure 17,225 42. ....
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....endered in the preceding year by the coordinate bench in similar facts and circumstances. As a result, ground no.4.5, 4.6, and 4.7, raised in assessee's appeal are allowed for statistical purposes. 35. The issue arising in grounds no.4.8 and 4.9, raised in assessee's appeal is pertaining to the reduction of 90% of the profit on sale of DEPB credits from the profit of the business for calculation of deduction under section 80HHC of the Act. 36. The learned CIT(A), vide impugned order, held that the profit from the sale of DEPB credits is not income directly derived from export business and accordingly, upheld the action of the AO. The learned CIT(A), however, directed the AO to reduce only 90% of such income for calculating the deduction under section 80HHC of the Act. Being aggrieved, the assessee is in appeal before us. 37. Having considered the submissions of both sides and perused the material available on record, we find that the Hon‟ble Supreme Court in Topman Exports v/s CIT, [2012] 342 ITR 49 (SC) held that profit on transfer of DEPB is covered under clause (iiid) of section 28 and 90% of such profit on transfer of DEPB certificate will get excluded from "prof....
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.... assessee for the A.Y.2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA. No. 4083/Mum/2003 dated 22.10.2014 held as under: - "25. The assessee has taken additional ground with regard to appropriation of HO expenses in computing deduction u/s 80-O of the Act amounting to Rs. 3,18,000/-. 26. The issue has been decided in favour of the assessee by the Tribunal for the assessment years 1996-97, 1997-98, 1994-95 & 1995-96. It was further brought to our notice that no appeal has been filed by the Department against the decision of the Tribunal for allowing appropriation of HO expenses in computing deduction u/s 80-O of the Act. 27. For the assessment year 1996-97 and 1997-98, this Tribunal has considered and decided an identical issue in para 15.2 to 15.4 as under. "15.2 We have heard the Sr ld Counsel for the assessee as well as the ld DR and considered the relevant material on record. A similar issue has been considered and decided by the Tribunal in assessee's own case for the AY 1995-96 in paras 29.1 & 29.2 as under: 29.1 On a similar issue the Tribunal in asse....
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.... the principle of consistency, the view taken by the Tribunal in A.Y. 2001-02 is respectfully followed, we order accordingly." 44. The learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case and no change in facts and law was alleged in the relevant assessment year. Therefore, respectfully following the judicial precedent in assessee's own case cited supra, we uphold the plea of the assessee and allow grounds no.5.1 and 5.2 raised in assessee's appeal." 42. In the present appeal, the learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case. This issue is recurring in nature and has been decided in faovur of the assessee in the preceding years. Therefore, respectfully following the judicial precedent rendered in assessee's own case cited supra, grounds no.5.1 and 5.2 raised in assessee's appeal are allowed. 43. Insofar as ground no.5.3 is concerned, keeping in view our aforesaid decision in respect of grounds no.5.1 and 5.2, the issue arising in ground no.5.3, raised in assessee's appeal becomes infructuous and hence, kept open. 44. The issue arising in grou....
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....neous receipts forming part of the paper book on page 135, submitted that the learned CIT(A) only examined the receipts from job charges and excess provision written back and found the same to be having direct nexus with the industrial undertaking, therefore includable in the business profit for purpose of computing deduction under section 80-IA of the Act. The learned Sr. Counsel by referring to the decision of the coordinate bench of the Tribunal in assessee's own case for the assessment year 2002-03 submitted that the gain arising from the sale of machinery was held to be eligible for deduction under section 80-IA of the Act. Since the receipts forming part of the miscellaneous receipts are of a similar nature, therefore the same should be considered for computing the deduction under section 80IA of the Act. 48. On the other hand, learned DR vehemently relied upon the orders passed by the lower authorities. 49. We have considered the submissions of both sides and perused the material available on record. In the year under consideration, the assessee included miscellaneous receipts of Rs.10,10,73,313 for the purpose of computation of deduction under section 80 IA of the Act....
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....n, Cement and Sponge Iron. The assessee has interest in diverse business. The Company started with a fabric plant in 1950 and today has emerged as one of the largest public company with turnover exceeding Rs. 6100 crores. The Company has achieved all round growth by putting up new plants and expanding existing plants. 2. The manufacturing Units are located in various parts of the country details of which has been filed with the return of income and a copy is attached for your ready reference. 3. You will kindly observe that many of the manufacturing Units are located in backward/notified area and the State Government of the respective States have granted subsidy by way of exemption of sales tax payment on sale of finished goods and purchase of raw inaterial and other inputs for promoting setting-up of industries in backward/notified area. Huge capital investment is needed for development of backward / notified areas and since the State Government cannot give subsidy in cash due to recourse constraints, subsidy has been granted by allowing the assessee to retain the sales tax payable to the State Government. 4. A note stating brief description of the vario....
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....he backwards areas to establish industries and was not a payment to meet any portion of the actual cost of fixed assets u/s 43(1) of the Act. 7. The assessee company submits that the amount of sales tax subsidy received during the previous year Rs. 117.84 crores is capital in nature and should be excluded profits while computing taxable income. (a) Aditya Cement and Bhatinda Grinding Unit (North Zone) 27.71 (b) South Cement and Grasim Cement (East and South Zone) 55.18 (c) Vikram Ispat, Salav 33.62 (d) Elegant Spinners 0.52 (e) Vikram Woollens 0.14 (f) Birla While GRC, Savli 0.28 117.45 8. Amount of sales tax subsidy for the previous year are as per return filed by the assessee company with the respective state/sales tax authorities and may change on completion of assessment." 52. The AO, vide assessment order passed under section 143(3) of the Act, held that the State Governments have not given any amount of subsidy either in cash or in-kind to the assessee. It was further held that the object of the government is to grant sales tax exemption to increase sales and not the capital inve....
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....te bench held that the only purpose of these schemes is for setting up industries in the respective areas for industrial development in State and also to accelerate development and absolutely not for augmenting the profits of the assessee. The relevant findings of the coordinate bench, in the aforesaid decision, in this regard are as under:- "5.3.5. From the perusal of the aforesaid schemes together with its objects and preamble, we find that the dominant purpose for which the incentive scheme per se introduced by the respective State Governments was only for the purpose of setting up of industries in the respective areas for industrial development in State and also to accelerate development and absolutely not for augmenting the profits of the assessee. Effectively, the schemes of various State Governments envisaged the rapid industrialisation, growth and new employment generation in the respective areas which would in turn promote the growth of the State. Hence, it could be safely concluded that subsidy / incentive granted is only for setting up of the units based on the fixed percentage of the capital cost and not for running the business of the assessee. Moreover, even ....
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....be taken into account as trade receipts or not. The object of the grant was that in the year 1981, in view of heavy fall in prices of sugar, sugar industries were in difficulty. The Government decided to give financial assistance to certain industries in respect of sugar manufactured by them from home-grown beet during the relevant period. Lord Macmillan held that- "What to my mind is decisive is that these payments were made to the company in order that the money might be used in their business." He further observed that: "I think that they were supplementary trade receipts bestowed upon the company by the Government and proper to be taken into computation in arriving at the balance of the company's profits and gains for the year in which they were received." 15. In the case before us, the payments were made to assist the new industries at the commencement of business to carry on their business. The payments were nothing but supplementary trade receipts. It is true that the assessee could not use this money for distribution as dividend to its shareholders. But the assessee was free to use the money in its business entirely as it liked and wa....
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....ax concessions. From page No. 294 of the paper book, we find that as per the said scheme the State Government has provided a set of waivers and deferrals which can be availed by the investor setting up a mega-investment. It is further provided that the concession is available to industries set up anywhere regardless of its location. In this regard, the assessee has also placed on record the eligibility certificate issued under the aforesaid scheme granted to the assessee's unit located at Reddipalayam Village for the manufacture of cement. Therefore, upon perusal of the aforesaid documents we are of the considered view that the sales tax exemption scheme floated by the Government of Tamil Nadu is of the nature similar to the schemes considered by the coordinate bench in the earlier years, and thus, sales tax exemption received under this scheme is in the nature of capital receipt. 58. Similarly, as regards the Sales Tax Incentive Scheme (Incentives offered by the Government of Gujarat under the New Incentive Policy-Capital Investment Incentive (General) Scheme-1995-2000), forming part of the paper book from pages 553-575, we find that the said scheme was to accelerate the develo....
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....sed. 61. Vide application dated 03/07/2006, the assessee sought admission of the following additional grounds of appeal:- "1. The learned CIT (A) ought to have held that the sum of Rs. 3,50,30,912/- being royalty was an allowable deduction when computing the assessee's income chargeable to tax and could not be disallowed by applying section 43B of the Act. 2. The learned CIT (A) ought to have held that the sum of Rs. 2,25,11,447/- being interest on royalty was an allowable deduction when computing the assessee's income chargeable to tax and could not be disallowed under section 43B of the Act." 62. Since, the issue raised by way of additional ground is a legal issue, which can be decided on the basis of material available on record, we are of the view that the same can be admitted for consideration and adjudication in view of the ratio laid down by the Hon'ble Supreme Court in NTPC Ltd vs CIT: [1998] 229 ITR 383 (SC). We find that the coordinate bench of the Tribunal in assessee's own case for the assessment year 2003-04, vide order dated 13/06/2023 cited supra decided a similar issue in favour of the assessee following the decision rendered in prece....
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....plea of the assessee and allow aforesaid additional grounds raised by the assessee vide application dated 03/07/2006." 63. In the absence of any allegation of change in facts and law in the present case, we find no reason to deviate from the view so taken by the coordinate bench in the preceding years. Therefore, respectfully following the judicial precedent in assessee's own case cited supra, we uphold the plea of the assessee and allow the aforesaid additional grounds raised by the assessee vide application dated 03/07/2006. 64. The assessee, vide another application dated 23/01/2013, raised the following additional grounds of appeal:- "1. The learned CIT(A) ought to have held that the sum of Rs. 1,16,24,021, being dividend received from Alexandria Carbon Black Company, a company incorporated and registered in Egypt (U.A.R.) was not taxable in India." 65. The issue arising in the aforesaid additional ground of appeal is pertaining to the taxability of dividend received from Egyptian company. Since, the issue raised by way of additional ground is a legal issue, which can be decided on the basis of material available on record, we are of the view that the same can....
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....l position as it existed prior to the aforesaid amendment as under:- "57A. If we analyse all the judgments as have been referred to above, it is evident that:- • Firstly, in R.M. Muthaiah (supra), the expression "may be taxed" has not been expressly dealt with, however, in the context of Article-6(1), wherein similar phraseology has been used, the High Court has given its decision that once it has been taxed in the foreign country, the same cannot be taxed in India. Thus, this decision in a way interprets the phrase "may be treated" to mean that source country has a right to tax to the exclusion of resident state; • Secondly, in S.R.M. Firm (supra), the High Court has in a very clear terms, has interpreted the expression "may be taxed" to mean that once the income is taxable in other contracting State that is country of source then country of resident i.e., India is precluded from including the same income in India; • Thirdly, the Hon'ble Supreme Court in Azadi Bachao Andolan (supra), has approved the reasoning of R.M. Muthaiah (supra) in an entirely different context, therefore, it cannot be held that the Hon'ble Supreme Court ....
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.... amendment vide Finance Act, 2003 to section 90 was held to be effective from 01/04/2004 and thus applicable from the assessment year 2004-05, therefore the year under consideration will be governed by the aforesaid amended provisions and Notification no. 91 of 2008 dated 28/08/2008 issued under section 90(3) of the Act is also applicable. We find that the coordinate bench of the Tribunal in Technimont (P.) Ltd. v/s ACIT, [2020] 116 taxmann.com 996 (Mumbai - Trib.), after taking into consideration the aforesaid amendment observed as under:- "10. It may be recalled that, with effect from 1st April 2004, a new sub-section 3 was inserted in Section 90, and this new sub-section provided that "(a)ny term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf". In exercise of the powers so vested in the Central Government, vide notification no. 91 of 2008 dated 28th August 2008, it was notified....
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.... by filing an appeal u/s.260A. 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of Rs. 18,61,084/- towards contribution to local organisation, relying upon the CIT(A)'s orders in the assessee's own case for the AYrs. 1999-2000 & 2001-02 which have been contested by the department in further appeal before the ITAT. 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the disallowance of Rs. 71,43,397/- made by the AO on account of rural development expenses, relying upon the CIT(A)'s orders in the assessee's own case for the AYrs. 1996-97 & 2001-02 which have been contested by the department in further appeal before the ITAT. 4. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the AO to treat the production cost of the advertisement films as a revenue expenditure by relying upon his earlier orders for the AYrs. 2002-03 and 2003-04 without appreciating that the department has not accepted the orders by filing appeal with the ITAT. 5. On the facts and in the circumstances of the case and in....
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....e. However, an amount of Rs. 11,63,19,840, was not considered as disallowance under section 43B falling under clause (c) to (f). The assessee contends that the amount of Rs. 10,89,50,144, which falls under clause (c) to (f) of section 43B of the Act and which is not payable as on 31/03/2004, cannot be covered by provision of section 43B of the Act. During the assessment proceedings, the assessee submitted that the issue has been decided in its favour by the coordinate bench of the Tribunal for the assessment year 1993-94 and the reference application filed by the Revenue on this issue has been rejected by the Tribunal. The AO, vide order passed under section 143(3) of the Act, did not agree with the submissions of the assessee on the basis that the Revenue has filed an appeal before the Hon'ble Jurisdictional High Court on this issue. Accordingly, the amount of Rs. 11,63,19,840, was disallowed. 72. The learned CIT(A), vide impugned order, following judicial precedent in assessee's own case deleted the aforesaid disallowance made by the AO. Being aggrieved, the Revenue is in appeal before us. 73. Having considered the submissions of both sides and perused the material availabl....
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....essee in the preceding years. Therefore, respectfully following the judicial precedent in assessee's own case cited supra, ground no.1, raised in Revenue's appeal is dismissed." 74. In the present appeal, the learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case. This issue is recurring in nature and has been decided in favour of the assessee in the preceding years. Therefore, respectfully following the judicial precedent rendered in assessee's own case cited supra, grounds no.1, raised in Revenue's appeal is dismissed. 75. The issue arising in ground no.2, raised in Revenue's appeal is pertaining to the deletion of disallowance towards contribution to local organisation. 76. The brief facts of the case pertaining to the issue, as emanating from the record, are: The brief facts of the case pertaining to the issue, as emanating from the record, are: During the year under consideration, the assessee made 24 contributions amounting to Rs. 18,61,084, to various local organizations located in and around the areas where the plants/offices of the assessee company are situated. During the assessment proceedings, the assessee....
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....alt with by the A.O. at page 6 -7, para 10 of his order. The ld. CIT(A) deleted the addition/disallowance by dealing the issue at page 3, para 7 of his order wherein he has followed the order of the Tribunal in earlier years. 33. We have considered the rival contentions and we found that the issue has been decided by the Tribunal consistently in favour of the assessee in the assessment years 1986-87 to 1989-90, 1994-95 & 1995-96 to 1997-98. In an appeal further filed by the Revenue before the Hon'ble High Court in assessment years 1988-89, 1994-95, 1995-96, the same has been decided in favour of the assessee. The order of the Tribunal for 2000-01 was not challenged by the Department before the Hon'ble High Court on this issue. Respectfully following the order of the Tribunal and Hon'ble High Court in assessee's own case, we do not find any reason to interfere with the order of the ld. CIT(A)." 53. Respectfully following the above decision, we sustain the order passed by the Ld.CIT(A) and dismiss the Ground No. 2 raised by the revenue. We order accordingly." 79. The learned DR could not show us any reason to deviate from the aforesaid decision rendered in ....
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.... rendered in the preceding year, observed as under:- "83. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench, vide order dated 14/12/2021, passed in assessee's own case for the assessment year 2002-03, while following the decision rendered in the preceding year, decided the similar issue in favour of the assessee by observing as under:- "60. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "38. Ground No. 6 of Revenue's appeal relates to the disallowance of rural development expenses. The A.O. has dealt with this issue at page 9, para 15 and the ld. CIT(A) has dealt with this issue at page 4-5, para 11 of his order. We found that the issue has been decided by the Tribunal in assessee's own case in its favour in assessment years 1998-99, 1999-00 & 2000-01. We further found that the Department on t....
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....leted the aforesaid disallowance made by the AO. Being aggrieved, the Revenue is in appeal before us. 89. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of the Tribunal, vide order dated 13/06/2023, passed in assessee's own case for the assessment year 2003-04 cited supra, while deciding similar issue in favour of the assessee by following the decision rendered in the preceding year, observed as under:- "97. Having considered the submissions of both sides and perused the material available on record, we find that the Coordinate bench, vide order dated 14/12/2021, passed in assessee's own case for the assessment year 2002-03, while following the decision rendered in the preceding year, decided the similar issue in favour of the assessee by observing as under:- "94. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 he....
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.... were made out of internal accruals and own funds. It was further submitted that no borrowings were made for the purpose of making these investments and no expenditures were incurred for earning tax-exempt dividend income. The AO, vide assessment order passed under section 143(3) of the Act, computed the disallowance of Rs. 1,95,057, as expenditure incurred for earning exempt income as per section 14A of the Act. 93. The learned CIT(A), vide impugned order, following the judicial precedents rendered in assessee's own case deleted the disallowance made by the AO under section 14A of the Act. Being aggrieved, the Revenue is in appeal before us. 94. Having considered the submissions of both sides and perused the material available on record, it is evident from the Balance Sheet of the assessee as no 31/03/2004, forming part of the paper book on Page-63, that the assessee has share capital and reserves & surplus of Rs. 3610.83 crore, while the investment made is of Rs. 2540.65 crore during the year. Therefore, it is sufficiently evident that during the year under consideration, the assessee's own funds are more than investments, including the investments for earning exempt in....
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....owing the decision rendered in the preceding year, observed as under:- "109. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench, vide order dated 14/12/2021, passed in assessee's own case for the assessment year 2002-03, while following the decision rendered in the preceding year, decided the similar issue in favour of the assessee, by observing as under:- "109. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - "54. The issue in ground No. 18 pertains to the apportionment of head Office expenses while computing deduction u/s 80IA of the Act. 55. This issue has been dealt with by the ld. CIT(A) vide his order in page 15-16, para 23.5 & 23.6. We found that the issue has been decided by the Tribunal in assessee's own case in its favour in assessment years 1994-95 to 1998-99 and the Departmen....
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....ion under section 80HHC of the Act. Thus, in view of the above, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. Accordingly, ground no.8, raised in Revenue's appeal is dismissed. 104. The issue arising in ground no.9, raised in Revenue's appeal is pertaining to the claim of deduction under section 80IA of the Act in respect of profit derived from Rail System. 105. The brief facts of the case pertaining to the issue, as emanating from the record, are: During the year under consideration, the assessee claimed a deduction of Rs. 12,01,53,521, under section 80IA of the Act in respect of Rail System, Raipur. The AO, vide assessment order passed under section 143(3) of the Act, rejected the claim of the assessee on the basis of the conclusion reached in assessee's own case for the assessment year 2003-04. The assessee also claimed a deduction of Rs. 11,85,52,834, under section 80IA of the Act in respect of Rail System, Hotgi. In support of its claim, the assessee filed Form no.10CCB, along with the return of income. The AO found that the claim of the Rail System, Hotgi, is on the line of claim in respect of Rail system, Raipur, which was rejec....
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.... appellant includes income from Rail System. 16.5 The appellant further submitted that the Rail System is a 'Profit Centre'. The Rail System is engaged in business of providing transportation facility to the cement plant, profit of which is embedded in the profit of the appellant company as a whole. By developing this infrastructure facility, there has been a saving in transportation cost and all over profits of the Company has increased due to such savings. All the businesses of the appellant company are interconnected. interlaced and there is common management, funds and control. Profits of the Rail System are embedded in the overall profit of the company. In support of contention that treatment of a transaction in books of account cannot govern the tax statement, the appellant relied on the decisions of the Supreme Court 82 ITR 363 Kadernath Jute Mfg. Co. Ltd Vs. CIT and 227 ITR 172 Tuticurin Alkali Chemical Ltd. 16.6 The appellant further submitted that Sec. 80IA(8) itself contemplates a situation where goods or services are transferred by an eligible undertaking to non eligible undertaking and vice versa. In such cases, deduction is to be allowed base....
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....oned that the legislature's intention was to cover organisations like Konkan Railway, Delhi Metro Corporation, etc. There is no such specific mention in the Act. The appellant relied on the decision of the Bajaj Tempo Ltd vs CIT 156 ITR 188(SC). 16.10 Regarding maintenance of separate books of account, the appellant submitted that there is no such condition for grant of tax holiday benefit. Although separate books of account are not maintained, profit of the eligible business has been computed based on the memorandum books of account and other details maintained by the appellant. The Balance Sheet and Profit & Loss account of the eligible business has been audited by the Chartered Accountant. The appellant has filed along with its Return of Income the form No. 10CCB, duly audited, as per the provisions of Section 801A(7). In the case of CIT vs Dunlop Rubber Co (1) Ltd. 107 ITR 182 (Cal.) it was held that for the purpose of tax holiday benefits it is not necessary that the eligible unit must maintain separate books of account. 6.12 The appellant submitted that the number of employees directly employed in the eligible business is not relevant at all. There is an....
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....t the assessee has entered into an agreement with South-Eastern Railway administration on 10/04/2000 for the Rail System at Rawan District, Raipur, however, submitted that the same is subsequent to the commencement of operations on 25/09/1999. The learned DR also submitted that since the infrastructure facility was made operational during the financial year 1999-2000, therefore, the claim of benefit under section 80-IA for the alleged infrastructure facility is to be examined as per the provisions of the Act relevant for the financial year 1999-2000. The learned DR also submitted that as per the provisions of section 80-IA (4)(i)(b) of the Act, as applicable for the financial year 1999-2000, such undertaking was required to be transferred to the Central Government, State Government, local authority or such other statutory body. However, the agreement dated 10/04/2000 does not have any such clause and therefore the same is not in conformity with the provisions of the Act. From the perusal of the record, it is evident that aforesaid submissions made by the learned DR were not the basis for disallowance under section 80-IA of the Act. In this regard, the following observations of the ....
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....re satisfied in the present case for claiming deduction under section 80-IA of the Act. As regards the submission of the learned DR that the assessee has constructed a private siding for captive use, we find that similar submission was rejected by the coordinate bench of the Tribunal in the case of assessee's subsidiary company in UltraTech cement Ltd (supra), vide order dated 14/12/2021. Further, even though the agreement was entered on 10/04/2000, and the operations commenced in September 1999, it is pertinent to note that the parties to the agreement have honoured the said agreement, and the rights granted therein were not revoked for this reason and the said agreement was still valid in the year under consideration. In view of the aforesaid findings and respectfully following the decision of the coordinate bench cited supra, we find no infirmity in the impugned order allowing deduction under section 80-IA of the Act to the assessee in respect of profits from the rail system. As a result, ground no.11 raised in Revenue's appeal is dismissed." 108. The learned DR made similar submissions, as were made in the preceding assessment year. The learned DR reiterated that the operati....