TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 1985
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....xpenses?" Learned counsel Shri Bandish Soparkar waived service of notice of admission of appeal for the respondent. We notice that Revenue has suggested several additional questions. Some of these questions are elements of questions which are already admitted or those which we propose not to admit. We would therefore, only refer to independent standalone questions which survive for discussion which are as under : "(5) Whether the Appellate Tribunal has erred in law and on facts in deleting addition of Rs.1,68,88,558/­ made u/s 36(1)(iii) of the Act? (6) Whether the Appellate Tribunal has erred in law and on facts in admitting the additional ground of appeal of assessee and allowing it to restrict the suo­moto disallowance made in the return of income from Rs.2,82,07,492/­ u/s. 14A to Rs.5,808/­ without the return being revised within the due date? (7) Whether the Appellate Tribunal has erred in law and on facts in deleting the addition made on account of disallowance of deduction of Rs.8,21,86,990/­ made u/s 80IB of the Act on account of allocation of R&D expenditure among manufacturing units based on turnover? (8) Whether the Appellate Tribunal has....
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....that the advances made for the purpose of business. On appeal, the ld.CIT(A) restricted the addition to the extent of 4% of the average cost of fund on the basis that the appellant had borrowed funds on which interest was paid, therefore it cannot be said that the appellant had sufficient own funds. The ld.CIT(A) observed that the amount outstanding against associate­company is in the nature of advance since appellant has not recovered the same. It this was business advance, the same could have been recovered or adjusted by now but the fact that it remain outstanding for many years clearly shows that this is interest­free advances given out of overall business fund which included borrowed funds also. The contention of the assessee before the authorities below was two folds; firstly, advances were given for business purposes, therefore provisions of section 36(1)(iii) cannot be applied and secondly, the assessee was having sufficient interest­free funds to make advances. The judgement relied upon by the ld.counsel for the assessee in the case of CIT vs. Raghuvir Synthetics Ltd.(supra), wherein the Hon'ble High Court of Gujarat relying on the judgement of the Hon'....
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....tics Ltd.(supra), we cannot uphold the action of the authorities below. Therefore, this ground of the assessee's appeal is allowed. 6. On this question also, the Tribunal has relied upon the decision of this Court in the case of CIT vs. Raghuvir Synthetics Limited, reported at (2013) 354 ITR 222 (Gujarat) and has allowed the appeal to that extent in favour of the Assessee. When the question is already covered by the above referred decision of this Court, we do not find that any substantial question would arise for consideration, as canvassed." With respect to question no.6, we may notice that the Revenue primarily objects to the Tribunal admitting additional ground of appeal by virtue of which the assessee was allowed to restrict the disallowance under section 14A of the Act to Rs.5,808/­. This Court has taken a view in series of decisions holding that it is always open for the Tribunal to admit additional grounds of appeal and entertain the same as long as facts on record are available. Reference in this regard can be made to decision in case of Commissioner of Income­tax v. Mitesh Implex reported in (2014) 367 ITR 85(Guj). This question is therefore, not consider....
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.... therefore, not considered. The second element of the assessee's claim of deduction under section 80­IB of the Act is research and development expenditure which the assessee attributes exclusively to its noneligible units. Record shows that the assessee has three manufacturing units situated at Jammu and Kashmir, Dholka and Ankleshwar. No part of the research and development expenditure of Rs. 8.21 crores was attributed to its manufacturing unit at Jammu and Kashmir. The Revenue authorities confronted the assessee with this aspect and ultimately held that common expenses would be allocated proportionately for the purpose of claiming deduction under section 80­IB of the Act. The Tribunal however in further appeal by the assessee noted that three different units were manufacturing different items. The assessee has placed before DRP the materials to contend that it had not carried out any research and development activity for formulation being manufactured by Jammu and Kashmir unit. This aspect was not rebutted by the Revenue. No specific material was quoted to disturb the assessee's detailed accounts maintained separately for each unit. It would thus appear that the ....
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....ettled otherwise than by the actual delivery or transfer of such commodity. However, as state above, the assessee was not a dealer in foreign exchange. The assessee was an exporter of cotton. In order to hedge against losses, the assessee had booked foreign exchange in the forward market with the bank. However, the export contracts entered into by the assessee for export of cotton in some caes failed. In the circumstances, the assessee was entitled to claim deduction in respect of Rs.13.50 lakhs as a business loss. This matter is squarely covered by the jdugment of the Calcutta High Court, with which we agree, in thecase of CIT v.Soorajmull Nagurmull(1981) 129 ITR 169." 7. Before the Calcutta High Court, the assessee was a firm engaged in the business of import and export of jute. In course of business, the assessee would enter into forward contract in foreign exchange in order to cover the loss which may arise due to difference in foreign exchange valuation. In one such contract, the assessee had to pay to the Bank difference of Rs.80,491/­ which was claimed by the assessee as revenue expenditure. The Assessing Officer disallowed the claim. The High Court held that the asse....