AI Drafter 
TaxTMI 
TaxTMI 
2024 (4) TMI 88
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....the normal provisions and book profit u/s. 115JB of the Act at Rs. 85,05,38,143/- and the same was processed u/s. 143(1) of the Act. The assessee's case was selected for scrutiny and the assessment order dated 15.06.2017 was passed u/s. 143(3) r.w.s. 144C(3) of the Act where the A.O. determined the total income at Rs. 21,73,79,550/- under the normal provisions and Rs. 92,66,70,763/- u/s. 115JB of the Act after making various additions/disallowances. 3. The assessee was in appeal before the first appellate authority, challenging the impugned order and the ld. CIT(A) had partly allowed the appeal filed by the assessee on various grounds. Both the Revenue as well as the assessee are in appeal and the assessee has also filed the cross objection challenging the order of the ld. CIT(A). 4. Ground No. 1 of the Revenue's appeal is on the disallowance made u/s. 14A of the Act where the ld. CIT(A) has restricted the said disallowance to Rs. 10 lacs as against Rs. 6,83,36,620/- disallowed by the Assessing Officer ('A.O.' for short). The facts of this grounds are that the assessee has claimed exempt income u/s. 10 of the Act amounting to Rs. 84,20,83,084/- which are tabulated as ....
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....xempt income during the year under consideration for the purpose of making the disallowance u/s. 14A r. w. Rule D. The assessee in its cross objection has also challenged the disallowance of Rs. 10 lacs as against the suo moto disallowance of Rs. 5 lacs made by the assessee for the reason that the ld. CIT(A) has not considered the fact that the ld. A.O. has not recorded the reasons for non satisfaction of the assessee's suo moto disallowance. 6. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the A.O. has not recorded his dissatisfaction to the assessee's claim prior to applying Rule 8D where the suo moto disallowance made by the assessee was not considered by the ld.A.O. The ld. AR further stated that the major amount of dividend income was received from the group concern of the assessee and has also made investments mostly in the group companies. The ld. AR contended that the lower authorities and the co-ordinate bench has restricted the disallowance to Rs. 10 lacs in assessee's case for A.Ys. 2008-09, 2009-10 and 2010-11 and the same has been upheld by the Hon'ble High Court. The ld. AR relied on various decisions which a....
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....he ld. A.O. has rightly recorded his dissatisfaction in this context. It is also observed that the ld. CIT(A) has failed to considered this issue on the merits of the claim made by the assessee. Further to this, it is also pertinent to point out that the assessee has relied on the following decisions: * PCIT vs. Moonstar Securities Trading and Finance Co. (P.) Ltd. [2019] 105 taxamann.com 275 (SC) * Maxopp Investment Ltd. vs. CIT [2018] 402 ITR 640 (SC) * Godrej Boycee Manufacturing Company Ltd. vs. DCIT (Civil Appeal No. 7020 of 2011) * PCIT vs. Bombay Stock Exchange Ltd. [2020] 113 taxmann.com 303 (Bom) * PCIT vs. Bajaj Finance Ltd. [2019] IT Appeal No. 237 & 485 of 2017 (Bom) * Pr. CIT vs. Vedanta Ltd. [2019] 102 taxmann.com 95 (Del) * Eicher Motors Ltd. vs. CIT [2017] 398 ITR 51 (Del) and various other decisions to hold the proposition that the ld. A.O. is casted upon the onus to explain with cogent reason for the dissatisfaction in the assessee's claim. These decisions relied upon by the assessee and the first appellate authority does not support the assessee's case for the facts and circumstances of this case. ....
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....ustment of the book profit u/s. 115JB of the Act in relation to the expenditure relatable to earning income. It is observed that the assessee while computing its book profits u/s. 115JB of the Act had suo moto added Rs. 5 lacs towards administrative cost for earning of dividend income. The assessee contends that it has erroneously adopted the provision of section 14A of the Act while computing the book profits u/s. 115JB of the Act. The A.O. had added Rs. 6,93,36,620/- u/s. 14A while computing income u/s. 115JB of the Act by relying on the decision of the co-ordinate bench in the case of Dy. CIT vs. Viraj Profile Ltd. [2015] 65 taxmann.com 52 (Mum- Trib). The assessee contended that for computing income u/s. 115JB of the Act only the adjusted book profit should be the basis for computation and not the income computed under the normal provisions of the Act. The assessee had relied on catena of judgments for the proposition that section 14A read with Rule 8D is not applicable for computing the profit u/s. 115JB of the Act. The ld. CIT(A) by relying on the decision of the Special Bench of the Tribunal in the case of ACIT vs. Vireet Investment (P). Ltd. [2017] 82 taxmann.com 415 (Delhi....
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....te lands in Panvel, Alibaug, Pen and Raigharh area vide appointment letter dated 16.07.2007 and the same was accepted by Shri Nilesh Janardan Thakkar vide letter dated 19.07.2007 who was a proprietor of M/s. PRS Enterprises and M/s. Acecard Infrasol Pvt. Ltd. The assessee is said to have transferred funds to M/s. PRS Enterprises and M/s. Acecard Infrasol Pvt. Ltd. towards land aggregating which was related to the business activities out of the own funds of the assessee. The A.O. disallowed the interest u/s. 36(1)(iii) of the Act for the reason that the said advance was not for business activities. The ld. CIT(A), on the other hand, deleted the impugned addition for the reason that on identical issues for A.Ys. 2008-09 to 2011- 12, the Tribunal had decided this issue in favour of the assessee and the same was upheld by the Hon'ble Jurisdictional High Court. 14. The Revenue is in appeal before us, challenging the order of the ld. CIT(A). 15. The ld. DR has contended that the said transaction is a colorable device and there was no genuine business transaction with and M/s. PRS Enterprises. Further, the ld. DR stated that there are Investigation Wing reported against Shri Nil....
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....ance on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Reliance Utilities & Power Ltd. [2009] 313 ITR 340 (Bom) has deleted the addition on the ground that if the interest free funds of the assessee are in excess of the loans advance then it can be presumed that the funds invested by the said entities are not out of the borrowed funds. The ld. AR for the assessee vide his submission has furnished the statement of the assessee's interest free funds where it is observed that the interest free funds are more than the investment and the advances made by the assessee. We, therefore, find no infirmity in the order of the ld. CIT(A) and ground no. 3 raised by the Revenue is dismissed and ground nos. 7, 8 and 9 of the assessee's cross objection are allowed. 18. Ground no. 4 of the Revenue's appeal and the ground nos. 10 and 11 of the assessee's cross objection pertains to the addition of Rs. 67,96,000/- towards unexplained money with respect to the sale of immovable property during the year under consideration. The facts of this ground are that the assessee vide its Memorandum of Agreement (MOA for short) dated 08.03.1999 entered into with Siemens for s....
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....to this, the ld. DR stated that section 50C would be applicable in the present case as the same is a deeming provision. The ld. DR also contended that the assessee has failed to furnish any documentary evidences in support of its claim to show the actual sale consideration and also the date of the agreement and the date of sale. The ld. DR relied on the order of the A.O. 21. We have heard the rival submissions and perused the materials available on record. It is observed that from the ITS data, the assessee has registered the sale for a consideration of Rs. 67,96,000/- and the same has been duly reported by Joint Sub Registrar in the AIR. The assessee's contention that the sale actually took place in 1999 for a consideration of Rs. 1,85,000/- and handed over the possession to the buyer in the same year along with all the original documents, was not accepted by the A.O. for the reason that the assessee has failed to furnished the evidences and the other supporting documents to establish its claim. It is observed that the assessee has furnished additional evidence before the ld. CIT(A) establishing the fact that the original agreement was executed in 1999 for which the assessee ha....
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....e was in appeal before the ld. CIT(A), challenging the TP adjustment made by the ld. A.O./TPO along with the other non corporate grounds. The details of the international transactions in the nature of issuance of letter of comfort/guarantee are summarized hereunder for ease of ready reference: Sr. No. Bank/Company which LOC/Guarantee issued AE in respect of which LOC/Guarantee issued Type of document Commission amount adjusted 1. ICICI Bank, Bahrain Shapoorji Pallonji M East LLC Letter of Comfort USD 59,000,000= Rs. 320,69,45,000 2 Emirates NBD Bank PJS Shapoorji Pallonji M East LLC Letter of Comfort SAR 97,000,000 Rs. 1,404,026,500 3. Barwa City Real Estate Company, WLL Shapoorji Pallonji Qa WLL Performance Guarantee Rs.1,112,459,400* 4. Exim Bank, India Natural Oil Venture Co. Ltd. Financial Guarantee Rs.419,405,000 26. It is observed that the ld. TPO had proposed the following adjustment pertaining to guarantee commission which is summarized as below: Sr. No. AE Amount Arm's Length Guarantee Margin Amount of Adjustment 1. Shapoorji Pallonji Mid East LLC AED =59,000,000 Rs. 3,206....
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....er stated that Explanation C to section 92B does not include letter of comfort within the expression of International Transaction. The ld.AR further stated that Rule 10A of the I. T. Rules does not include Letter of Comfort as per the amended provision for the purpose of determining the ALP of the international transactions. The ld. AR further stated that Rules 10A clause (c) of the I. T. Rules defined 'corporate guarantee' and the explanation to clause (c) excludes Letter of Comfort from the corporate guarantee. The ld. AR contended that Letter of Comfort issued by the assessee to its AE's does not come under the purview of International Transaction. The ld. AR further stated that performance guarantee stood expired in January, 2013 and that the ld. CIT(A) has rightly deleted the addition pertaining to the ALP determined for the performance guarantee. The ld. AR on the issue of financial guarantee relied on the decision of the Hon'ble Jurisdictional High Court in the case of Everest Kento Cylinder (supra) where 0.5% on financial guarantee has been approved by the Hon'ble High Court. The ld. AR relied on the order of the Hon'ble High Court and the ld. CIT(A)'s order. ....