TaxTMI 
TaxTMI 
2022 (2) TMI 1382
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....nces need to be made. The AO was not convinced with the reply of the assessee and proceeded by computing the disallowance in accordance with rule 8D. The relevant findings of the AO read as under :- 2.3. Detailed working for calculation of disallowance U/s 14A of the Act' and in accordance with Rule 8D of the Income tax rules, 1962. Particulars Rs. 31.03.2010 Rs. 31.03.2011 Rs. Average Interest and finance charges 6417953705 Investments 365716571 1349056730 857386651 Total Assets 60,58,50,35,555/- 110384992608 85485014082 2.4. Therefore the revised computation of the expense related to exempt income is as follows - 1) Interest directly attributable to investments made for earning exempt income is Rs.Nil - Rule 8D (i). 2) Interest indirectly attributable to investments made for earning exempt income is Rs. 641,79,53,705/- Rule 8D (ii). Therefore disallowance under rule 8D (ii) has been calculated as follows - Interest Cost divided by Average Total Assets multiply by Average Investments- [Rs. 641,79,53,705/- divided by Rs. 85,48,50,14,082/- multiply by Rs. 85,73,86,651/-] = Rs. 6,43,69,970/- 3) Disallowance under Rule 8D(iii) has been c....
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....sallowance to Rs. 33,12,333/- towards 0.5% of the average value of investment. Learned Assessing Officer, however, computed the disallowance u/s. 8D(2)(ii) towards interest component to the tune of Rs. 1,46,15,417/- and Rs. 33,12,333/- under Rule 8D(2)(iii) and since the assessee had already disallowed Rs. 33,12,333/-, the Assessing Officer added Rs. 1,46,15,417/-. Learned CIT(A) deleted the same and restricted the disallowance to Rs. 33,12,333/- on the ground that only such investment which yielded exempt income alone should be considered and such investments were made in the year 2007-08. 16. Submission of the ld. Counsel before us is that in the year under consideration, only the investment in Karnataka Bank Ltd. alone yielded dividend and such investment in Karnataka Bank Ltd. was invested during the assessment year 2007-08; and that during such year, the perusal of balance sheet as on 31.03.2007 shows the cash reserves of Rs. 81.70 crores and it was far exceeding the initial investment of Rs. 35.35 crores in Karnataka Bank Ltd. He submits that this aspect was considered by the coordinate Bench of this Tribunal in assessee's own case for the assessment year 2007-08 in ITA No.....
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....SAR expenses. 12. The underlying facts of this issue are that the holding company of Religare Finvest Limited introduced the Religare Enterprises Ltd. Employees Stock Appreciation Rights Scheme 2007 (the Scheme) to motivate, reward and retain key employees including employees of the subsidiaries of REL. 13. As per the said scheme stock appreciation rights (SARs) are contractual rights that entitled it to receive the appreciation from a corresponding number of company shares after the grant date. During the year under consideration on closer of the scheme assessee company claimed residuary amount of Rs. 11,89,114/- written back in the books. 14. The AO was not convinced with the claim and disallowed the deduction on account of excess of SAR expenses written back in the current year and made the addition and further added advances written off Rs. 3,40,868/-. 15. The assessee carried the matter before the CIT(A) but without any success. 16. Before us the Counsel for the assessee drew our attention to the decision of the Coordinate Bench in ITA No. 1947/Del/2018, 2364/Del/2018 for A.Y. 2007-08 and ITA No. 6474/Del/2016 and 5872/Del/2016 for A.Y. 2009-10 order dated 24.08.2020 and ....
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....r, he made disallowance for provision for inactive SARs of Rs. 8,32,207/- and unreconciled balance of Rs. 19,57,017/-. In this manner, the AO made total disallowance of Rs. 78,18,311/-. The assessee challenged this addition before the Ld. CIT(A). However, on further rectification application of the assessee, the ld. AO deleted the addition of Rs. 8,32,207/- and Rs. 19,57,017/-. The Ld CIT(A) mentioned the fact of rectification by the AO and sustained the balance amount of addition of Rs. 50,29,087/- in view of the decision of learned CIT(A) in AY 2011-12 and 2008-09. 9.8 Before us, the learned counsel of the assessee has submitted that the issue-in-dispute is covered in favour of the assessee by following a judicial decision of the Tribunal in the case of Religare Finvest Limited Vs. ACIT, ITA No. 2284/Del./2013 for AY 2008-09 (Del.-Trib.) and Hon'ble Delhi High Court in the case of Principal Commissioner of Income Tax vs. M/s. Religare Securities Ltd., ITA No. 311/2018, order dated 19.03.2018. The relevant finding of the Tribunal in the case of M/s. Religare Finvest Limited (supra) is reproduced as under: "4.3 We have heard the rival submissions and perused the relevant materi....
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....P Ventures Ltd., TC(A) 1023 of 2005. In PVP Ventures Ltd. (supra), Madras High Court discussed the relevant issues in the following manner : "7. On the issue of Staff Welfare expenditure, the Commissioner pointed out that the assessee had debited a sum of Rs. 66.82 lakhs under the head of Staff Welfare expenditure. The said sum was incurred by the assessee in respect of Employees Staff Option Plan and Employees Staff Purchase Scheme Guidelines. As per SEBI guidelines, the difference between the market value of the shares and the value at which the shares were allotted to the employee is allowable as an expenditure. The Commissioner of Income Tax revised this claim accepted by the Officer and held that the accounting treatment prescribed by SEBI, nowhere suggests that it was a revenue expenditure to be debited to the Profit and Loss Account as it was only a notional and contingent expenditure. In the circumstances, the Commissioner of Income Tax held that the shares allotted under Employees Staff Option Plan and Employee Staff Purchase Scheme Guidelines, 1999, having not stated anything about the manner of treatment to this expenditure, the difference in the value at which the s....