TaxTMI 
TaxTMI 
2023 (8) TMI 70
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....ty, grounds of appeal filed for assessment year 2013-14 are reproduced as under: 1. The order of the Commissioner of Income tax (Appeals) is contrary to law, facts and circumstances of the case. 2 The CIT(A) erred in remitting back the disallowance of expenditure u/s. 14A r.w.r 8D of the IT Rules amounting to Rs. 91,52,609/-. 2.1 The CIT(A) ought to have appreciated that during the relevant year, the appellant had not received any exempt income from the investments. 2.2 The CIT (A) had mentioned that, statement of account filed by the appellant during appeal proceedings does not establish that the appellant was in receipt of any exempt income and directed the AO to delete the disallowance in case of non- receipt of exempt income during the year under consideration whereas in the submission it has been clearly stated by the appellant in the details of other income in the page number 148 of paper book. 3. The Commissioner of Income tax (Appeals) erred in confirming the disallowance of weighted deduction claimed u/s 35(2AB) amounting to Rs. 48,19,513/-. 3.1 The Commissioner of Income tax (Appeals) ought to have appreciated that the....
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....contract was in excess of the export turnover of the Appellant and also examine whether there was any premature cancellation of forward contract following the order of CIT(A) for the AY 2012-13. 6.2 The CIT(A) ought to have appreciated that loss arising from forward contract in respect of export turnover which did not fructify is also allowable as a business loss and cannot be considered as speculative and therefore CITIA) should not have remitted the issue back to A0. The cancellation of forward contract is a routine transaction done during the course of business and the CIT(A) ought not to have directed AO to check whether there were any such cases to allow the above said realized loss. 7. The CIT(A) erred in holding that the loss arising from restatement of . working capital (Packing Credit facility) loan Rs. 3,54,43,000/- is not allowable as a deduction. The CIT (A) had mentioned that the loss on reinstatement packing credit outstanding was not debited to Profit and Loss Account while the same has actually been debited by the appellant in its books of accounts and the relevant details is stated in the submission of paper book. 7.1 The Commissioner of ....
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....ved under SHIS scheme shall not be treated as revenue income. 4. The appellant further submits that only profit on sale of DEPB have been held to be revenue income and hence the face value of the licence could not be constituted revenue income. The appellant contends that Rs. 1,88, 65,939/- received as ace value of DEPB licence shall be reduced from the taxable income offered. The appellant craves leave to add, alter, omit or amend any of the above grounds of appeal." 4. The brief facts of the case are that, the assessee company is engaged in the business of steel wheels for commercial vehicles, passenger cars and utility vehicles, filed its return of income for the assessment year 2013-14 on 29.11.2013 by declaring a total income of Rs. 13,46,85,330/- and book profit of Rs. 44,55,37,002/- u/s. 115JB of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The assessment has been completed u/s. 143(3) r.w.s. 92CA of the Act on 26.12.2016 and determined total income of Rs. 36,48,83,723/-, by making the following additions: Add: 1) Disallowance of additional depreciation u/s. 32(1)(iia) 1,50,17,982/- 2) Disallowance of loss on foreign exch....
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.... other hand supporting the order of the CIT(A) submitted that, once Competent Authority certifies expenditure allowable u/s. 35(2AB) of the Act, then the question of allowing deduction towards excess expenditure does not arise. Therefore, the Ld. CIT(A) after considering relevant facts has rightly sustained additions made by the AO and their order should be upheld. 10. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The provisions of section 35(2AB) of the Act, deals with weighted deduction for R&D expenditure incurred for in- house Research and Development purpose. As per prescribed rules, the assessee should submit the details of expenditure to the Competent Authority i.e., DSIR and said authority will certify whether expenditure incurred by the assessee is eligible for weighted deduction u/s. 35(2AB) of the Act. In this case, the assessee has submitted details of expenditure to DSIR and the DSIR has certified a sum of Rs. 6,47,12,000/- as eligible expenditure for the purpose of section 35(2AB) of the Act. The AO, after considering Form 3CL issued by the DSIR dated 27.07.2015, has disallowed excess expendi....
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....oth assessment years is disallowance of interest on borrowed capital u/s. 36(1)(iii) of the Act. The AO has disallowed interest paid on borrowed capital u/s. 36(1)(iii) of the Act, and proviso thereto on the ground that, the assessee has borrowed capital for the purpose of acquisition of capital asset and thus, interest paid on said borrowed capital should be capitalized to the asset till such asset is put to use. It was the argument of the assessee that, interest paid on borrowed capital is for the purpose of working capital requirement of the assessee. Therefore, the assessee has rightly debited said interest to the profit and loss account. It was further contended that, in case interest paid on borrowed capital is required to be capitalized to the cost of asset, then necessary depreciation may be allowed as per the law. 15. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The facts brought on record by the Assessing Officer clearly indicate that, the assessee has borrowed loans from financial institutions for the purpose of acquisition of capital asset. As per provisions of section 36(1)(iii) of the Act, p....
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....essee is revenue is nature, which cannot be considered as capital receipts. 19. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. In so far as admission of additional grounds filed by the assessee, we find that additional grounds filed by the assessee is purely a legal issue, which can be raised at any time of proceedings, including pending proceedings before the Tribunal and thus, by following the decision of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd vs CIT 229 ITR 383 (SC), we admit additional grounds filed by the assessee for both assessment years for adjudication. 20. In so far as focus market subsidy received by the assessee from Government of India, we find that an identical issue has been considered by the Tribunal in the case of M/s. Hyundai Motors India Ltd vs ACIT (Supra), where the Tribunal after considering relevant facts held that, focus market scheme subsidy received by the assessee from Government of India is revenue in nature and the same was given to offset higher cost of freight and other disabilities of exporters to be more competitive in exports to certain regio....
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....in the case of Sahney Steel & Press Works Ltd. Vs. CIT (228 ITR 253). The importance of judgement of Hon'ble Supreme Court in the above case lies in the fact that it has discussed and analyzed the entire case laws on the issue and it has laid down basic test to be applied in judging the character of subsidy. That test is the character of receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is given. In other words, in such cases, one has to apply purpose for test. The point of time at which subsidy paid is not relevant. The source is immaterial. The form of subsidy is immaterial. 33. Therefore, in the light of decision of the Hon'ble Supreme Court, in the case of Sahney Steel & Press Works Ltd. Vs. CIT(supra), if we examine facts of the present case, we are of the considered view that duty credit scrips received by the assessee from Govt. of India for export of certain goods to some specified regions is certainly in the nature of revenue receipt, because which is primarily given to offset higher freight cost and other disabilities to select international markets, with a view to enhance our export competitivenes....
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....r facility created by the assessee. Moreover, in this case, the assessee itself had considered amount received under Focus Market Scheme as revenue receipts and offered to tax, considering nature and purpose of receipt of subsidy from the Govt. of India. It is a well known fact that the assessee is best judge to decide a particular item of income or expenditure, because it is well aware facts of its case. In this case, the assessee, after considering nature and purpose of amount received under Focus Market Scheme, has very well considered the same as revenue receipt and offered to tax. Therefore, based on some judgements of higher forum making a claim for excluding said receipt from tax by claiming that it is in the nature of capital receipt is not correct, unless the assessee demonstrates that facts of those case laws considered by appellate forum and facts of assessee's case are similar in nature. As regards various case laws relied upon by the assessee including the decision of ITAT., Chennai in the case of Eastman Exports Global Clothing Pvt.Ltd. in ITA No.47 & 48/Chny/2016, we find that the ITAT, Chennai Bench in above case has not apprised facts in right perspective of law an....
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....cometax Rules,1962 specifically allows high rate of depreciation at 60%, only on computer and not on computer accessories? (b) UPS is only a source of alternative supply of power to the computer and is not an integral part of computer? (c) Computer can function independently without the UPS and even the UPS generally can be used to ensure an uninterrupted power supply to the other equipment besides computer. 4. The learned CIT(A) has erred and directed the AO to restrict the disallowance made u/s 14A to the earning of exempt Income. If no exempted Income delete the disallowance made u/s 14 r.w.Rule 8D. 5. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing officer be restored." 24. The first issue that came up for our consideration from ground no. 2 of revenue's appeal for both assessment years is additional depreciation u/s. 32(1)(iia) of the Act, for Rs. 1,50,17,982/-. The facts with regard to the impugned dispute are that the assessee has claimed 50% of additional depreciation u/s. 32(1)(iia) of the Act, for the impugned assessme....
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....S, on the ground that UPS is not a part of computer and computer software. We find that this issue is covered in favour of the assessee by the decision of ITAT, Chennai Benches in the assessee's own case for assessment year 2013- 14, where the Tribunal held that UPS, Printer and Scanner are integral part of computer and computer software and eligible for higher depreciation of 60% as applicable to computer software. The relevant findings of the Tribunal are as under: "38. We have perused the order of co-ordinate Bench of this Tribunal in the case of Indian Overseas Bank in ITA No.1815/Mds/2011 dated 2.4.2013 and find that the issue is squarely covered in favour of the assessee where the co- ordinate Bench held that assessee is entitled to get 60% of UPS observing as under:- "8. We find that this issue has already been adjudicated by us in ITA No.818/Mds/2010 relevant to the assessment year 2007-08. The relevant extract of the order of the Tribunal in ITA No.818/Mds/2010 is reproduced herein below:- "The next ground of appeal relates to claim for depreciation on UPS at 80%. The AR submitted that the CIT(A) has failed to appreciate that UPS is an energy sav....