AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 1466
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....e casein confirming the disallowance u/s.10B to the extent of Rs. 2,49,32,201/-. 2. The learned CIT(A) has erred both in law and on the facts of the case in holding that the authorized representative of the appellant gave concession of law which is binding on the assessee. 3. The learned CIT(A) has erred both in law and on the facts of the case in failing to appreciate that the learned ITAT had remitted the file to the AO for "fresh examination" of the claim as per law. 4. The learned CIT(A) has erred both in law and on the facts of the case in holding that the decision of Liberty India is applicable whereas the same has no application in the present case. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The learned CIT(A) has erred in law and on facts o....
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....iled along with the revised return of income was pertaining to the assessment year 2004-05. ii. The approval for 100% EOU was granted in the middle of the year i.e. 1st November 2002. iii. If other income shown by the assessee are excluded for working out the exemption under section 10B of the Act, the income of the assessee from the eligible unit becomes negative. Thus there is no question for claiming or allowing the exemption under section 10B of the Act. 3.4 In view of the above, the AO denied the exemption claimed by the assessee under section 10B of the Act and assessed the income in the assessment framed under section 143(3) read with section 254/260B vide order dated 15th December 2008 determining the total income at Rs. 4,16,41,810/- only. 3.5 On appeal, the learned CIT (A) vide order dated 30th November 2009 held that the assessee is eligible for exemption under section 10B of the Act with effect from 1st November 2002. Meaning thereby that the assessee is not eligible for deduction with respect to other income accrued or arise for the period 01-04-2002 to 31-10-2002 for deduction under section 10B of the Act. However the ld. CIT-A was pleased to g....
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....ur of Assessee by the various decision cited hereinabove. 5.2 After recording the arguments of the ld. AR, the ITAT was pleased to set aside the issue to the file of the AO for fresh examination after considering the other income between the pre and post EOU period on the basis of the case laws cited by the ld. AR. The relevant finding of the ITAT reads as under: From the table it is seen that Assessee has bifurcated the income into 2 periods up to the period of granting of EOU status and subsequent to it. We are of the view that these factual aspect needs verification at the end of A.O. We therefore remit the issue to the file of A.O for fresh examination of the claim of Assessee, the bifurcation of income into 2 period in the light of the decisions cited reasonable opportunity of hearing to the Assessee. The Assessee shall be at liberty to furnish additional evidence before A.O. Thus this ground is allowed for statistical purposes. 5.3 In the 3rd round of litigation, the AO in the assessment framed under section 143(3) read with section 254 of the Act vide order dated 7th October 2015 denied the exemption with respect to the other income aggregating to Rs. 6,00,87,....
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....wn by the assessee for DEPB, duty drawback and DEPB rate difference aggregating to Rs. 2,49,32,201/- held that the above income has already been decided not eligible for exemption under section 10B of the Act by the ITAT vide order dated 7th March 2014 in ITA Nos. 814 & 1035/AHD/2010. Therefore, such income cannot be considered as eligible income from the eligible unit at the level of the learned CIT (A). Thus the learned CIT (A) allowed the partly relief to the assessee. 8. Being aggrieved by the order of the learned CIT (A), both the assessee and the revenue are in appeal before us. The assessee is in appeal against the direction of the learned CIT (A) for not allowing the exemption with respect to DEPB, duty drawback and DEPB rate difference aggregating to Rs. 2,49,32,201/- whereas the Revenue is in appeal against the direction of the learned CIT (A) for allowing the exemption with respect to the other income pertaining to the post EOU period in the ratio of export turnover to total turnover. The ground of appeal of the Revenue in ITA number 2295/Ahd/2016 for A.Y. 2003-04 read as under: 1. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made ....
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.... 10. However the learned DR submitted that the assessee has fairly conceded before the ITAT that it is not eligible for exemption with respect to DEPB, Duty Drawback and DEPB rate difference income aggregating to Rs. 2,49,32,201/-. The ITAT accordingly decided the issue against the assessee. 11. The learned AR in respect of the appeal filed by the Revenue contended that the issue for allowing the exemption under section 10B of the Act after considering income in the ratio of export turnover and total turnover has been decided in favour of the assessee in the judgments as given under: i. PCIT vs. Dishman Pharmaceuticals and Chemicals Ltd. in Tax Appeal No- 129 of 2019 (Guj) ii. Maral Overseas Ltd vs. ACIT (2012) 136 ITD 177(Indore) (SB) iii. Sonic Technology India Inc. vs. ITO in ITA No. 2665 & 2720/Ahd/2011 12. Both the learned AR and the DR before us vehemently supported the order of the authorities below to the extent favourable to them. 13. We have heard the rival contentions of both the parties and perused the materials available on record. The 1st question that arises for our adjudication whether the other income shown by the assessee in it....
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....ntire profits of the business are to be determined which are further multiplied by the ratio of export turnover to the total turnover of the business. [Para 77] Section 10B sub-section (1) allows deduction in respect of profits and gains as are derived by a 100 per cent EOU. Section 10B(4) lays down special formula for computing the profits derived by the undertaking from export. [Para 78] Thus, sub-section (4) of section 10B stipulates that deduction under that section shall be computed by apportioning the profits of the business of the undertaking in the ratio of turnover to the total turnover. Thus, notwithstanding the fact that sub-section (1) of section 10B refers the profits and gains as are derived by a 100 per cent EOU, yet the manner of determining such eligible profits has been statutorily defined in sub-section (4) of section 10B. As per the formula stated above, the entire profits of the business are to be taken which are multiplied by the ratio of the export turnover to the total turnover of the business. Sub-section (4) does not require an assessee to establish a direct nexus with the business of the undertaking and once an income forms part....
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....cation whether the ITAT has given any finding qua the DEPB, Duty Drawback and DEPB rate difference income i.e. the said income is on not eligible for deduction under section 10B of the Act. In this connection, we have perused the finding of the ITAT. A close/minute reading of the ITAT order reveals that there was no finding given by the ITAT except recording the concession of the learned AR that the income namely DEPB, Duty Drawback and DEPB rate difference income are not eligible for deduction under section 10B of the Act. The relevant finding of the ITAT has already been reproduced in the previous paragraph. 13.6 A question also arises for a consideration whether the tribunal was supposed to give the independent finding with respect to the dispute where the assessee does not agitate. Under the normal circumstances, the ITAT does not give any finding based on reasons with respect to the disputes not agitated by the counsel of the assessee. However, it is also pertinent to note that the ITAT in the same order has also observed that certain issues stand in favour of the assessee but the ld. CIT-A has not just followed the same blindly by allowing the same but adjudicated the same....
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.... that the Appellant shall not be eligible to claim such deduction as the public issue is brought in the succeeding year and not during the year under consideration. 3. The Id. CIT(A) has failed to appreciate that there being no such kind of condition prescribed in the provisions of S.35D of the Act and there being satisfaction of all such conditions prescribed in S.35D of the Act, the deduction with regard to expenditure incurred in relation to public issue cannot be denied to the Appellant. 4. The Id. CIT(A) has erred in law and on the facts of the case in confirming the action of Id. AO in disallowing an amount of Rs. 48,85,261/- being provision for diminution in value of investment. 5. The Id. CIT(A) has erred in law and on the facts of the case in confirming the action of Id. AO in not granting full claim of deduction u / s 10 B of the Act in totality at Rs. 11,02,89,592/- as claimed by the assessee. 6. The Id. CIT(A) has erred in law and on the facts of the case in confirming the action of Id. AO in excluding duty draw back income of Rs. 97,35,571/- from export profit to determine eligible profit for deduction u/s 10B of the Act. 7.....
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....er consideration which was capitalized for claiming the deduction under section 35D of the Act. The expenses fall under section 35D of the Act are in the nature of fee paid to merchant banker, registrar to the issue, lawyers and solicitors, printing and distribution of public issue application forms, holding road show, media publicity, traveling and other types of expenses incurred in connection with public issue. All the expenses as mentioned above in connection with public issue were duly capitalized in the books of accounts. 19.1 It was contended by the assessee that the fees paid to SBI Capital Market Ltd does not fall within the nature of expenses as provided under section 35D of the Act. Therefore, the assessee treated the consultancy fee as revenue in nature. Without prejudice to the above, the assessee also contended that the expenses incurred in connection with the issue of shares are revenue in nature as held by the Hon'ble Madras High Court in the case of CIT vs. Southern Petrochemicals Industries Corporation Ltd. reported in 311 ITR 202. 19.2 However, the AO found that the impugned expenses were incurred by the assessee for the purpose of the study of the capit....
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....of the Act. 24. On the contrary, the learned DR vehemently supported the order of the authorities below. 25. We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case involved in the question have already been extracted in the preceding paragraph which are not in dispute. Therefore, for the sake of brevity, we're not inclined to repeat the same. The 1st controversy that arises for adjudication whether the expenses in dispute incurred by the assessee are revenue in nature and therefore the same are allowable under the provisions of section 37(1) of the Act. The provisions of section 37(1) of the Act states that any amount of expenditure not being capital or personal in nature incurred wholly and exclusively for the purpose of the business shall be allowed as deduction. However, the onus lies upon the assessee to satisfy the conditions imposed under section 37(1) of the Act. However the ld. AR before us has not demonstrated based on the documentary evidence the purpose for which such expenditure has been incurred. On perusal of the order of the AO, we note that such expenditure has been incurred for study of ....
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....e expenditure incurred by the assessee should be eligible for deduction under the provisions specified under section 35D of the Act. If, the expenditure is eligible for deduction under section 35D of the Act then it is the duty of the Revenue to allow the same despite the fact that the assessee has not claimed the same in the income tax return. Thus the question arises whether the expenditure incurred in connection with the study of the capital market are qualified for deduction under section 35D of the Act. In this connection, the attention is drawn to sub-clause (iv) to clause (c) to subsection 2 of section 35D of the Act which reads as under: (2) The expenditure referred to in sub-section (1) shall be the expenditure specified in any one or more of the following clauses, namely :- (a)******* (b)******* (c) where the assessee is a company, also expenditure- (i) ***** (ii) ***** (iii) *** (iv) in connection with the issue, for public subscription, of shares in or debentures of the company, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus; ....
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....ower. Therefore, the provision was made in the books of accounts. 28. However, the AO found that such provision made by the assessee does not represent the ascertained liability though the same was recorded as per the accounting standard but the requirements of accounting standard cannot overturn the provisions provided under the Act. Accordingly, the AO disallowed the claim of the assessee. 29. On appeal, the learned CIT (A) was pleased to uphold the order of the AO. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 30. The learned AR before us has not made any contention on merit, rather, he conceded the order of the authorities below. However, the learned AR before us pleaded that as a result of disallowance of the claim of the assessee, the benefit provided under section 10B of the Act should be allowed on the enhanced income on account of such addition. 31. On the other hand, the learned DR vehemently supported the order of the authorities below. 32. We have heard the rival contentions of both the parties and perused the materials available on record. The provisions of section 10B of the Act provides a deduction to an e....
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....duction under section 10B of the Act in the ratio of export turnover and the total turnover. Accordingly, the AO concluded that the assessee has taken double benefit of deduction under section 10B of the Act with respect to such income. 34.1 The AO also found that there was a sister concern of the assessee namely Survin Laboratories which has shown an expense amounting to Rs. 2,80,05,452/- only. As per the AO such sister concern has incurred the expenses on behalf of other manufacturing undertaking of the assessee. Accordingly, the AO was of the view that such expenses need to be allocated to the undertakings of the assessee being eligible and no eligible undertaking. 34.2 On question by the AO, the assessee agrees to allocate the expenses of the sister concern in the ratio of productions carried out by eligible and non-eligible unit. The assessee further worked out an expense of Rs. 1,13,34,211/- attributable to the eligible unit in the letter dated 16th December 2010. Accordingly the AO allocated the expenses to the extent of Rs. 1,13,34,211/- to the eligible unit while working out the deduction under section 10B of the Act. 35. Aggrieved assessee preferred an appeal ....
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....reduced expenses of Survin Laboratories of Rs. 1,13,34,211/- from the profits of EOU for computation u7s.10B, the action upheld. The Ground of appeal is dismissed. 37. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us: 38. The learned AR before us contended that the other income by way of Duty Drawback of Rs. 97,35,571/- has been derived by the eligible undertaking and therefore the same is eligible for deduction under section 10B of the Act. 38.1 The learned AR further submitted that the assessee has not claimed double deduction with respect to duty drawback income as held by the authorities. For this purpose, the learned AR drew our attention on pages 94 to 97 of the paper book where the certified form 56 G was placed. 38.2 Regarding the apportionment of the expenses of the sister concern namely Survin Laboratories, the learned AR contended that it is engaged in providing spray Roy plants services which is not required by the eligible undertaking. Furthermore, the sister concern is preparing separate income and expenditure account. Accordingly, the learned AR contended that the impugned expenditure cannot be allocated to the el....
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....the assessee was not based on any documentary evidence. 40.2 Besides the above, we also note that the assessee vide letter dated 16th December 2010 itself has admitted for the allocation of the expenses of the sister concern. The relevant finding of the AO reads as under: Accordingly, it has submitted vide its letter dated 16/12/2010 that out of the total expenses of the unit Rs. 1,13,34,211/- can be said to be attributable to Kiri EOU and hence needs to be factored in while computing the deduction. The assessee has made further submission dated 30/12/2010 stating the reason for apportionment of expenses relating to Survin between EOU and non-EOU. 40.3 Thus, we find that the contention of the learned AR before us is contrary to the finding of the authorities below. 40.4 That as may be, the learned AR before us prayed to provide one more opportunity to the assessee to justify its stand that the expenses incurred by the sister concern are not attributable to the eligible undertaking. The prayer of the learned AR was not objected by the learned DR appearing on behalf of the Revenue. Accordingly in the interest of justice and fair play we are inclined to remit the ....
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....e order of the authorities below. 47. We have heard the rival contentions of both the parties and perused the materials available on record. The facts relating to the case have already been elaborated in the preceding paragraph which are not in dispute. Therefore, we are not inclined to repeat the same for the sake of brevity and convenience. The controversy that needs to be addressed so as to whether the assessee is eligible for deduction with respect to the provisions made against the diminution in the value of assets as discussed above while determining the book profit under section 115JB of the Act. This controversy has been resolved by the Hon'ble Gujarat High Court in the case of CIT Vs. Vodafone Essar Gujarat Ltd. reported in 397 ITR 55 wherein it was held as under: "With insertion of clause (i) to the explanation with retrospective effect, any amount or amounts set aside for provision for diminution in the value of the asset made by the assessee, would be added back for computation of book profit under section 115JB of the Act. However, if this was not a mere provision made by the assessee by merely debiting the Profit and Loss Account and crediting the provisio....
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....for. 3. The learned CIT(A) has erred in law and on facts of the case in confirming the action of AO in treating rent income as "income from other sources" and thereby disallowing Rs. 2,94,000/- on account of standard deduction claimed u/s.24 of the Act. 4. The learned CIT(A) has erred in law and on the facts of the case in confirming the action of learned AO in adding disallowances u/s.14A of the Act to book profit calculated u/s.115JB of the Act. In the facts and circumstances of the case, expenses in relation to any exempt income have not been debited in the profit and loss account and thus estimation of such expenses as per S.14A r.w.r.8D cannot be made basis for adjusting book profit u/s.115JB of the Act. 5. The learned CIT(A) has erred in law and on the facts of the case in not reducing income of Rs. 5,46,37,200/- offered for tax in AY 2009-10 under the normal provisions of the Act from the book profit while calculating MAT for the year under consideration. Ld.CIT(A) failed to appreciate that this income has already been taxed under the normal provisions of the Act in earlier year and therefore the same cannot once again be taxed under the provisions....
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....e of interest expense. 55. On the other hand, the learned DR before us submitted that the assessee failed to establish based on the documentary evidence that the borrowed fund was not utilized in the investments. The ld. DR vehemently supported the order of the authorities below. 56. We heard the rival contention of the both parties and perused the materials available before us. The fact of the case have been elaborated in previous paragraph, hence for the sake of brevity, we are not inclined to repeat the same. At the outset we note that the AO has made the addition on two folds i.e. on account of interest expenses and on account of administrative expenses. 56.1 Regarding the addition made on account of interest expenses, we note that the assessee has substantial amount of interest free fund in the form of share capital and reserve which exceeds the amount of investment. This fact can be verified from the Balance Sheet of the assessee. The relevant page of the Balance Sheet, placed on page number 7/Y of paper book, is extracted below: Balance Sheet as at 31st March, 2010 Particulars Annexure As At 31.03.2010 (Rs.in Lacs) As At 31.03.2009 SOURCES OF FU....
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....le Supreme Court in 112 taxmann.com 322 where the Hon'ble High court held as under: "25. Total exempt income earned by the respondent-assessee in this year was Rs. 19 lakhs. In these circumstances, we are not required to consider the case of the Revenue that the disallowance should be enhanced from Rs. 75.89 crores to Rs. 144.52 crores. Upper disallowance as held in Pr. CIT v. McDonalds India (P.) Ltd. ITA 725/2018 decided on 22nd October, 2018 cannot exceed the exempt income of that year. This decision follows the ratio and judgment of the Supreme Court in the case of Maxopp Investments Ltd. v. CI T[2018] 402 ITR 640/254 Taxman 325/91 taxmann.com 154 and the earlier judgments of the Delhi High Court in Cheminvest v. CIT [2015] 378 ITR 33/234 Taxman 761/61 taxmann.com 118 and CIT v. Holcim (P.) Ltd. [2015] 57 taxmann.com 28 (Delhi)." 56.5 In view of the above we direct the AO to limit the disallowance of the administrative and interest expenses, if any, then it should be lower of exempted income or the disallowance made under section 14A r.w.r. 8D of Rules of Income Tax Rules. Accordingly, we confirm the disallowance made by the AO which was subsequently confir....
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....o charge the rental income from the land under the head house property provided it is appurtenant to the building. Accordingly it was contended by the learned AR that the conditions as specified under section 22 the Act have been satisfied. 62. On the other and the learned DR vehemently supported the order of authorities. 63. We have heard the rival contentions of both the parties and perused the materials available on record. The fact of case have already been elaborated in previous paragraphs, hence for the sake of brevity we are not inclined to repeat the same. The question arises before us, whether rent received from letting out of an open land on which some shades were constructed by the tenant can be classified as income from house property being land appurtenant to building under section 22 of the Act. What we find from the fact of case is that it was open land which was out let out not the building and rental income received for the letting out of land not shades or building. Thus in our humble understanding, the impugned rent cannot be treated as income from building or shades for the reason that what was let out is an open land not the building or shades. In this re....
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....it under section 115JB of the Act. 69. The learned AR alternatively contended that 1% of the exempted income can be disallowed while computing the book profit under section 115JB of the Act. 70. On the other hand the learned DR vehemently supported the order of the authorities below. 71. We have heard the rival contentions of both the parties and perused the materials available on record. The AO in the instant case has made the disallowance under section 14A r.w.r. 8D of the Income Tax Rules for Rs. 74,07,778/- while determining the income under normal computation of income. Further, the AO while determining the book profit under Minimum Alternate Tax (MAT) as per the provisions of section 115JB of the Act, has added the disallowance made under the normal computation of income under section 14A r.w.r. 8D of Income Tax Rule for Rs. 74,07,778/- in pursuance to clause (f) of explanation 1 to section 115JB of the Act which was restricted to Rs. 35,23,174/- by the learned CIT (A) to the extent of exempted income. 71.1 However, we note that in the recent judgment of Special Bench of Hon'ble Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. reported in 82 Taxm....
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....e in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit. 71.5 Now the question arises how to determine the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. In this regard, we note that there is no mechanism/ manner given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/ determine the expenses with respect to the exempted income. Therefore in the given facts & circumstances, we feel that adhoc disallowance will serve the justice to the Revenue and assessee to avoid the multiplicity of the proceedings and unnecessary litigation. Thus we direct the AO to make the disallowance of 1% of the exempted income as discussed above under clause (f) to Explanation-1 of Sec. 115JB of the Act. We also feel necessary to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. But now we note that since there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independ....
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....that the claim of expenditures on IPO made were not allowable u/s. 35D of the I. T. Act and same was not as per law. Considering the adverse observations as listed above, and submission of the appellant, the total claim of expenditure made by the appellant at Rs. 5,01,82,479/- is reduced by the following items:- (i) IPO Advertisement Expenditure Rs. 10,00,000/- (ii) IPO consulting fees Rs. 2,25,000/- (iii) 1PO Stationery expenses of Rs. 8,55,688/-being 10% of the total claim of Rs. 8556884/-. The AO has not found any specific defects in respect of the claim. (iv) IPO travelling expenses of Rs. 3,12,491/-being 10% of the total claim of Rs. 31,24,910/-.The AO has not found any specific defects in respect of the claim. 7.9.8. In view of the aforesaid discussion, total disallowance of the claim of expenditures works out to Rs. 23,93,179/- which is reduced from the total claim of expenditure at Rs. 5,01,82,479/- and in result the balance claim of expenditure amounting to Rs. 4,77,89,300/- is directed to be considered for deduction u/s. 35D of the I. T. Act, 1961. Since the provisions of section 40(a)(ia) of the I.T. Act are attracted on the p....
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....in support of his claim. Therefore we do not find any reason to interfere in the order of the learned CIT (A). Accordingly we deny the deduction of stationary and travelling expenses amounting to Rs. 8,55,688/- and Rs. 3,12,491/- respectively under the provisions of section 35D of the Act. 79.2 Coming to the expenses incurred without deducting the TDS, in this connection the first controversy arise whether the provision of section 40(a)(ia) can be invoked in the case of deduction claimed under section 35D of the Act. For this purpose we refer the provisions of section 40 of the Act which reads as under: 40. Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession",- 79.3 The above provisions overrides the provisions contained under section 35D of the Act. Therefore, though the expenses which are eligible for deduction under section 35D of the Act but the same cannot be allowed as deduction in the event the TDS was not deducted. 79.4 Regarding the alternate contention by the learned AR, we find force in the argument adv....
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....e in nature and ha retrospective effect from 1st April, 2005." 79.5 In view of above, we are inclined to set aside the order of the ld. CIT-A to the AO for fresh adjudication in the light of the above discussion. As we have set aside the issue raised by the assessee to the file of the AO, we are not inclined to entertain the 2nd alternate contention raised by the learned AR for the assessee. As such, the alternate contention becomes infructuous. Hence the ground of appeal of the assessee is partly allowed for the statistical purposes. 80. The issue raised vide ground Nos. 7, 8 and 9 by the assessee are either general or consequential or premature to decide. Accordingly we dismiss the same being general or consequential or premature as infructuous. 81. In the result the appeal filed by the assessee is partly allowed. • Coming to ITA No. 1231/Ahd/2018 an appeal by the Assessee corresponding to A.Y. 2010-11 82. The assessee has raised the following grounds of appeal: 1. The learned CIT(A) has erred both in law and on the facts of the case in confirming the penalty when show cause notice u/s.274 r.w.s.271(l)(c) of the Act did not specify the exact char....
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.... the assessee is not entitled for the standard deduction claimed by the assessee under the provisions of section 24 of the Act. Accordingly the AO disallowed the standard deduction claimed under section 24 of the Act for Rs. 2,94,000/- and added to the total income of the assessee. Further, the AO in the assessment proceedings initiated the penalty with respect to the addition made in the assessment order. Finally, the AO levied the penalty for Rs.88,200/- being 100% of the amount of tax sought to be evaded. 85. Aggrieved assessee preferred an appeal to the learned CIT (A) who has also confirmed the order of the AO. 86. Being aggrieved by the order of learner CIT (A) the assessee is in appeal before us. 87. The learned AR before us filed a paper book running from pages 1 to 110 and submitted that the assessee has not concealed any particulars of income or furnished any inaccurate particulars of income. As such, the assessee has made disclosure in the income tax return with respect to the impugned income. It was also contended that the issue involved for treating the rental income from the letting of the land under the head house property viz a viz income from other sources....
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....support and guidance from the judgment of Hon'ble Jurisdictional High Court in case of CIT vs. Sambhav Media Ltd reported in 33 taxmann.com 97 where it was held as under: 3. The issue pertains to deletion of penalty imposed on account of disallowance of bad debts. It appears that the assessee disclosed all relevant material facts before the Assessing Officer at the time of filing of return. The Assessing Officer did not find such claim sustainable and imposed penalty on the assessee. The CIT(A) deleted such penalty and the Tribunal has rightly held in the finding that it is a case of difference of opinion in allowability of certain deductions and in absence of any material to indicate any dishonest attempt on the part of the assessee to conceal the income, no penalty can be imposed. 89.1 We also draw support and guidance from the order of Coordinate bench of Mumbai ITAT in case of ITO vs. Kantilal G Kotecha reported in 108 taxmann.com 119 where it was held as under: 3.5.1 We find that the assessee's case falls under Explanation 1 of section 271(1)(c ) of the Act wherein he had offered bonafide explanation narrating the entire facts before the ld AO....
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....that the reliance placed by the ld DR on the decision of Hon'ble Supreme Court in the case of Mak Data (P.) Ltd. (supra) is not applicable to the facts of the case as in that case, there was a survey conducted in the premises of that assessee and there was undisclosed income found and statement was recorded from the assessee wherein he had accepted to offer the same. Subsequently while filing the return, the assessee did not offer such income found during survey. Later during the assessment proceedings, when the assessee had no other option but to offer the income found during survey, he came forward before the ld AO to offer such income. In that factual matrix, the Hon'ble Supreme Court held that department is not in the business of selling peace and that assessee had to be invited with the levy of penalty. This decision is factually distinguishable with that of the assessee. In the instant case, there was absolutely no malafide on the part of the assessee in making the claim of exemption u/s 47(xiv) of the Act as could be seen from the findings rendered hereinabove. We find that the decision that would be applicable to the facts of the instant case would be the decision o....
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.... disallowance u/s.14A of Rs. 26,65,132/- to the book profit u/s.115JB of the Act. 4. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in making upward addition of Rs. 50,00,000/- by way of T.P. adjustment on account of guarantee commission worked out by the TPO without there being any jurisdictional as well as legal and factual basis for the same. 5. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in referring the case of the appellant to the transfer pricing officer. Under the facts and circumstances of the case, there was no reason to interfere with the pricing adopted by the appellant as the same is falling within the parameters laid down under the scheme of the Act. 6. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in invoking the provisions of chapter X without prima facie demonstrating that there was some tax avoidance. 7. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in making a reference to Ld.TPO u/s.92C(3) r.w.s.92CA(....
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....d in favor of the assessee. For detailed discussion please refer the relevant paragrapgh No.56 of this order. Thus we hold that the principles laid down in above paragraph will mutas mutandis apply herein also. In the result, the ground of appeal raised by the assessee is partly allowed whereas ground of appeal raised by the Revenue is dismissed. 95. The 2nd issue raised by the assessee vide ground no- 3 in its appeal is that the learned CIT(A) erred in partly confirming the addition made in book profit under section 115JB of the Act on account of the disallowances made under section 14A under normal compuation of Income. 96. At the outset we note that the similar issue has been raised by the assessee in ITA No. 2524/Ahd/2015 for A.Y. 2010-11 in ground no. 4 which has been partly allowed in favor of the assessee. For detailed discussion please refer the relevant paragrapgh No.71 of this order. Thus we hold that the principles laid down in above paragraph will mutas mutandis apply herein also. In the result ground of appeal raised by the assessee is partly allowed. 97. The 3rd issue raised by the assessee in ground Nos. 4 to 8 is that the learned CIT (A) erred in confirming....
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....arket. In this respect the assessee placed reliance on the judgment of Hon'ble Courts in following cases: (a) SA Builder reported in 288 ITR 1 (b) CIT vs. Amalgamation Ltd. reported in 266 ITR 188 c (c) ACIT vs. W S Industries Ltd. reported in 2009 TIOL 783-Mad 99.2 The assessee further submitted that it is not engaged in the business of banking. Thus it cannot charge the guarantee fee from its AE. The assessee also contended that the notional value of guarantee was not a transaction to shift the profits from India. 99.3 Assessee also contended that while considering guarantee to AE the business strategy of the assessee should also be considered. The assessee in this regard referred the OECD guidelines 2010 where in para 1.59 it was stated that "a tax payer seeking to penetrate a market or to increase its market share might temporarily lower than the price charged for otherwise comparable products, in same market. " 99.4 However, the TPO disregarded the contention of the assessee by holding as under: (i) The assessee, without substantiating its contention based on cogent material, claimed that issuance of corporate guarantee has commerci....
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....ect placed reliance on the order of the Hon'ble Hyderabad tribunal in case of Four Soft Ltd. vs. DCIT in ITA no. 1495/H/2010. The assessee further contended that this view is also supported by the memorandum explaining provisions and CBDT circular bearing no 14/2001. 100.1 The Assessee also submitted that the intention of TP provision is to prevent the avoidance of tax by shifting the income from India to other tax jurisdiction through intra group transaction. But in corporate guarantee extended by parent company to foreign subsidiary does not involve any monetary transaction. Therefore the question of shifting of profit does not arise. In this respect the assessee placed its reliance on the following judgment: (i) Dana Corporation, In re [2010] 321 ITR 178 (AAR) (ii) Vanceburg Group B.V. , In re [2007] 289 ITR 464 (AAR) (iii) Deere and Company, In re bearing AAR No. 934 of 2010 100.2 Further there was not any method provided under the Act to benchmark the guarantee fee/commission with respect to the transaction under consideration. Therefore the charging provision of section 92B of the Act gets failed. The assessee also contended that the issue ....
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....ned by the TPO/Assessing Officer in respect of guarantee given by the assessee company in respect of loans taken by the group company. 4. The Ld.CIT(A) has erred in law and on facts in holding that the assessee has not provided any loans but the guarantee which did not involve any expenditure on the part of the appellant nor any monetary benefits in the hands of the recipient AE. 5. On the facts and in the circumstances of the case, the ld.CIT(A) ought to have upheld the order of the Assessing Officer. 103. The Ld. AR before us filed a paper book-running form pages 1 to 668 and submitted that there cannot be any adjustment for corporate guarantee fees as the same is not the international transaction. The ld. AR in support of his contention relied on the order of this Tribunal in the case of Micro Ink Ltd vs. ACIT (63 taxmann.com 353). Accordingly, the ld. AR contended that there cannot be any adjustment in assessee's profit for such corporate guarantee furnished to the AE. 104. On the other hand the Ld. DR before us submitted that the corporate guarantee furnished by the assessee to its AE is an international transaction and therefore the same needs to be bench....
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....iding something which was not even raised before us. In the written submission, it was stated that "Hon'ble Delhi ITAT was not requested by the contesting parties to decide the issue as to whether the provision of guarantee was a service or not". That's not factually correct. We are unable to see any merits in learned Departmental Representative's contention, particularly as decision categorically noted that not only before the Tribunal, but this issue was also raised before the DRP- as evident from the text of DRP decision. We now take up the issue with respect to specific mention of the words in Explanation to Section 92B which states that "For the removal of doubts, it is hereby clarified that (i) the expression "international transaction" shall include........ (c) capital financing, including any type of long -term or short -term borrowing, lending or guarantee, purchase or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other debt arising during the course of business." There is no dispute that this Explanation states that it is merely clarificatory in nature inasmuch as it is 'for the removal of ....
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....fore, essential that in order to be covered by clause (c) and (e) of Explanation to Section 92B, the transactions should be such as to have bearing on profits, incomes, losses or assets of such enterprise. In other words, in a situation in which a transaction has no bearing on profits, incomes, losses or assets of such enterprise, the transaction will be outside the ambit of expression 'international transaction'. This aspect of the matter is further highlighted in clause (e) of the Explanation dealing with restructuring and reorganization, wherein it is acknowledged that such an impact could be immediate or in future as evident from the words "irrespective of the fact that it (i.e. restructuring or reorganization) has bearing on the profit, income, losses or assets of such enterprise at the time of transaction or on a future date". What is implicit in this statutory provision is that while impact on " profit, income, losses or assets" is sine qua non, the mere fact that impact is not immediate, but on a future date, would not take the transaction outside the ambit of 'international transaction'. It is also important to bear in mind that, as it appears on a plain re....
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....tee issued by the assessee is not covered under the definition of section 92B of the Act. 105.2 Before us, no material has been placed on record by the Revenue to demonstrate that the decision of Tribunal as discussed above has been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the present case viz a viz the case as discussed above nor has placed any contrary binding decision in its support. 105.3 We also note that admittedly the assessee has charged guarantee fee of Rs. 1,88,42,093/- from its AE in the immediate previous assessment year for providing very same corporate guarantee which was written off in the current year. The TPO in show cause notice raised this issue and asked explanation from the assessee. The assessee in this regard furnished that there were no cost involved in such corporate guarantee extended to its AE. Thus they mutually decided to waive off the guarantee fee and decided not to charge fee in future also. The TPO, thereafter, dropped the issue in final finding with respect to the corporate guarantee fees written off in t....
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....has not derived any income against these expenditures, therefore, those cannot be allowed u/s. 37(1] of the 1. T. Act. Therefore, disallowance made by the AO treating the same as capital expenditure is found correct and justified, and hence, the same is confirmed. The ground of appeal is accordingly dismissed 109. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 110. The learned AR before us contended that the expenses incurred by the assessee in connection with the loan obtained from the financial institution are revenue in nature as held by the Hon'ble Apex Court in the case of India Cement Ltd vs. CIT reported in 60 ITR 52. 110.1 The learned AR also submitted that the AO has made the disallowance by observing that the payment made to Wong Partnership LLP as capital in nature but the fact is that no new assets has come into existence out of such expenses viz a viz it has not resulted any benefit of enduring nature to the assessee. Likewise, there was no allegation of the AO whether such expenses were incurred wholly and exclusively for the purpose of the business. Accordingly it was contended that such expenses should be ....
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....d. 113. The issue raised vide ground no 10, 11 and 12 by the assessee are either general or consequential or premature to decide. Accordingly we dismiss the same being general or consequential or premature. 114. In the result, the appeal of the assessee is partly allowed. Coming to ITA No. 44/Ahd/2016 an appeal by the Revenue corresponding to A.Y. 2011-12 115. The Revenue has raised the following grounds of appeal: 1. The Ld.CIT(A) has erred has erred in law and on facts in restricting the disallowance made u/s.14A of the Act to Rs. 26,65,132/- as against Rs. 1,91,56,166/-, without properly appreciating the facts of the case and the material brought on record. 2. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made on account of export commission u/s.40(a)(i) of the Act amounting to Rs. 19,00,721/-, without properly appreciating the facts of the case and the material brought on record. 3. The Ld.CIT(A) has erred in law and on facts in rejecting the arm's length guarantee fee of 4.67% arrived at by the TPO in respect of guarantees given by the assessee, reducing the upward adjustment of Rs. 4,67,00,000/-. 4. Th....
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....n 15,37,650 1,28,680 M/s Sheskhani International Shop 10-11, first shopping Centre, S.I.T.E. manghopir Road, karachi, 75700, Pakistan 1,98,44,840 10,14,096 Shin Jeng Eun., Korea 1,64,31,581 7,57,945 Total 3,78,14,071 19,00,721 119.1 During the assessment proceedings it was contended by the assessee that: i. The brokers were independent agents and they were not working for the assessee. ii. The brokers had no permanent establishment or fixed place of business in India. iii. The services were rendered by the brokers from outside India. Furthermore, these services were utilised outside India. iv. The payment to the brokers were directly made to them in their respective countries and none of the broker has received the payment in India. 119.2 In view of the above the assessee submitted that commission paid to the overseas brokers is not chargeable to tax in India under the provisions of section 9, 5 & 6 of the Act. For the deduction of tax under the provisions of section 195 of the Act, chargeability of income to tax in India is prerequisite. Once the income is not chargeable to tax, then the question o....
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....as well as observed by me during the course of appellate proceedings to indicate that the services have been rendered in India. 4.1 1 . The judgment of honourable Supreme Court in the case of CIT vs. Toshoku Limited [125 ITR 525 (SC)] is important on the issue, whereby it has been held that commission earned by the non-resident for acting as the selling agent 'for the Indian exporter, wherein such non-resident was rendering services from outside India does not accrue in India. In the present case before me also, the foreign selling commission agents are resident of foreign country, from where the procurement service had been provided for which the commission has been paid, and therefore, the issue is directly and squarely covered by the Apex Court decision. 4.12. Regarding the observation of the AO that the income is deemed to accrue or arise in India by applying the provisions of section 9 (l)(i), it is seen that there is no fact on record to indicate that any of the agents had any permanent establishment in India. All the agents had their offices on the foreign soil and nothing on record that they had PE in India. Further the assessing officer has also not p....
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....) the Revenue is in appeal before us. 122. Both the learned DR and AR before us vehemently supported the order of the authorities below as favourable to them. 123. We have heard the rival contention and perused the materials on record carefully. The assessing officer has disallowed the commission paid to foreign agents by holding that the income arising on account of commission paid to overseas agents was deemed to accrue or arise in India and was accordingly taxable under the provision of section 5(2)(b) r.w.s. 9(1)(i) of the Act but the assessee has failed to make the compliances with the provisions of section 195(2) of the Act. In this case, the non-residents agents have rendered their services outside India in connection with procurement of sale. All the agents have overseas offices and they were not having any permanent establishment in India. At the time hearing learned DR has not brought any material on record suggesting that the non-resident agents are having any permanent establishment in India or services were provided within India. In absence of such finding it is held that the commission income earned by the foreign agent cannot be deemed to be accrue or arise in ....
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....earned CIT(A) has erred both in law and on the facts of the case in confirming the upward adjustment @ 0.5% to the extent of Rs. 44,32,634;'/- on account of corporate guarantee given to associate enterprises while determining arm's length price under the provisions of transfer pricing. 6. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of laws and Principles of Natural Justice and therefore deserves to be quashed. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in levying interest u/s.234A/234B/234C/D of the Act. 8. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in initiating levy of penalty u/s.271(1)(c) of the Act. 129. The first issue raised by the assessee in ground Nos. 1 to 2 is that the learned CIT (A) erred in sustaining the disallowance in part f....
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....imilar issue has been raised by the assessee in ITA No. 3491/Ahd/2015 in ground no. 4 to 8 which have been allowed in favor of the assessee. For detailed discussion please refer the relevant paragrapgh No.105 of this order. Thus we hold that the principles laid down in above paragraph will mutas mutandis apply herein also. In the result ground of appeal raised by the assessee is allowed whereas ground of appeal raised by the Revenue is dismissed. 135. The ground nos. 6, 7 and 8 raised by the assessee in its appeal are general, consiquential and premature in nature. Hence the same are dismissed being general, consequential and premauture in nature and infructuous. 136. In the result the appeal of the assessee is partly allowed. • Coming to ITA No. 2296/AHD/2016 for the assessment year 2012-13, an appeal by the Revenue 137. The Revenue has raised the following grounds of appeal: 1. The Ld.CIT(A) has erred in law and on facts in restricting the disallowance u/s.14A to Rs. 20,000/- as against Rs. 2,47,78,596 worked out by the AO without properly appreciating the facts of the case and the material brought on record. 2. The Ld.CIT(A) has erred in l....
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....)(iii) of the Act. 141. During the year under consideration assessee's capital work in progress (CWIP) and advance for capital goods increased by Rs. 82,17,65,196/- which includes an amount of Rs. 30,83,70,236/- outsatnding for payment against capital goods and an amount of Rs. 9,73,72,695/- being revenue expenses capitalised by the assessee. Thus in the year under consideration net fund deployed in form CWIP and capital goods for Rs. 41,60,22,265/- (Rs. 82,17,65,196 - Rs. 30,83,70,236 - Rs. 9,73,72,695) only. 141.1 The AO was of the view that the borrowed fund has been diverted and deployed in the form of CWIP and Capital advance, hence the proportionate interest expenses incurred needs to be disallowed. Accordingly the AO proposed to disallow the interest @ 12% on the amount of Rs. 41,60,22,265/- whereas the assessee contended that during the year it has incurred interest cost of Rs. 6,98,02,444/- on term loan utilised both for the purpose of business and expansion of existing project. Out of total interest cost it has capitalised an amount of Rs. 3,95,81,203/- being 57% of total cost against the expansion of extisting project. Therefore, no additional disallowance of in....
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....Being aggrived the order of the learned CIT (A) the Reveneue is in appeal before us. 146. Both the learned DR and AR before us vehemently supported the order of the authorities below to the extent favourable to them. 147. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, there was the expansion of existing project of the assessee for which assessee has employed fund in the form of capital work in progress (CWIP) and advance for capital goods amounting to Rs. 41,60,22,265/-. Simultaneously the assessee was incurring huge interest cost and made suo-moto capitalisation of interest cost of Rs. 3,95,81,203/- being 57% of the total interest cost incurred. However the AO worked the interest attributable to the CWIP and advance for capital goods @ 12% amounting to Rs. 4,99,22,715/- and made the addition of Rs. 1,03,41,512/- which came to be deleted by the learned CIT (A). Admittedly the assessee was having interest free fund of Rs. 379,02,05,844/- in form of share capital and Reserve. Thus fact can be verified form the balance sheet of the assessee placed on page 15 of paper book. The extract of same is reproduced here und....
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....assessment year 2013-14, an appeal by the Assessee 153. The following grounds of appeal have been raised by the assessee: 1. The ld.CIT(A) has erred in law and on facts of the case in confirming the action of the ld.AO of disallowing Employees' contribution towards PF and ESI amounting to Rs. 13,20,404/- u/s.36(1)(va) of the Act. 2. The learned CIT(A) has erred both in law and on the facts of the case in holding that Corporate Guarantee given to associate enterprise is an "international transaction" falling within the purview of transfer pricing provisions. 3. The learned CIT(A) has erred both in law and on the facts of the case in holding that direct and binding decision of jurisdictional Tribunal which has considered all the earlier judgments on the issues in the case of Micro Ink Limited vs ACIT (2015) (63 taxmann.com 353) is not to be followed, despite the same being applicable on the facts of the case. 4. The learned CIT(A) has erred both in law and on the facts of the case in confirming the upward adjustment to the extent of ?Rs. 7,40,796/- @ 0.5% p.a. on account of corporate guarantee given to associate enterprise while determining arm'....
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....2.16% per annum. 2. The Ld.CIT(A) has erred in law and on facts in holding adhoc guarantee fees of 0.5% in respect of guarantee given without appreciating the fact that the above rate was without any basis and hence the rate needed to be adjusted before it could be adopted as arms length rate. 3. The Ld.CIT(A) has erred in law and on facts in rejecting the arms length price of Rs. 32,00,240/- determined by the TPO in respect of guarantee given by assessee company in respect of loan taken by group company. 4. The Ld.CIT(A) has erred in law and on facts in holding that the assessee had not provided any loans but guarantee which did not involve any expenditure on part of the assessee or monetary benefits in the hands of recipient. 158. At the outset we note that the similar issue has been raised by the assessee in ITA No. 3491/Ahd/2015 in ground no. 4 to 8 which has been allowed in favor of the assessee. For, the detailed discussion please refer the relevant paragrapgh No. 105 of this order. Thus we hold that the principles laid down in above paragraph will mutas mutandis apply here in also. In the result ground of appeal raised by the assessee is allowed....
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.... 1.1. The Ld.CIT(A) has erred in deleting the said addition u/s.40(a)(ia) of the IT Act as no TDS was made on such payments. 6. The Ld.CIT(A) has erred in deleting the addition of Rs. 32,00,240/- based on the upward adjustment made by the TPO by computing the guarantee fees at 2.16% per annum. 7. The Ld.CIT(A) has erred in law and on facts in holding adhoc guarantee fees of 0.5% in respect of guarantee given without appreciating the fact that the above rate was without any basis and hence the rate needed to be adjusted before it could be adopted as arms length rate. 8. The Ld.CIT(A) has erred in law and on facts in rejecting the arms length price of Rs. 32,00,240/- determined by the TPO in respect of guarantee given by assessee company in respect of loan taken by group company. 9. The Ld.CIT(A) has erred in law and on facts in holding that the assessee had not provided any loans but guarantee which did not involve any expenditure on part of the assessee or monetary benefits in the hands of recipient. 10. The Ld.CIT(A) has erred in law and on facts by rejecting the facts that I transactions like advances given to the AE in a way by share ....
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....n deleting the addition of Rs. 6,19,209/- made on account foreign commission under section 40(a)(ia) of the Act. 171. At the outset we note that the similar issue has been raised by the Revenue in ITA No. 44/Ahd/2016 in ground no. 2 which has been allowed in favor of the assessee. For the detailed discussion, please refer the relevant paragrapgh No. 123 of this order. Thus we hold that the principles laid down in above paragraph will mutas mutandis apply herein also. In the result ground of appeal raised by the Revenue is dismissed. 172 The next issue raised by the Revenue vide ground no. 6 to 9 is that the learned CIT (A) erred in allowing the part relief to assessee out of addtion made by the AO on account of corportae guarantee extended to AE. 173. The issue raised by the Revenue has already been adjudicated by us along with the appeal of the assessee bearing No. 1654/AHD/2017 vide paragraph No. 158 of this order. The ground raised by the Revenue was dismissed by us. For the detailed discussion, please refer the relevant paragraph. Accordingly, the ground of appeal raised by the Revenue is dismissed. 174. The next issue raised by the Revenue vide ground no. 10 & 11 i....
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....he advance/share application money for subscription of shares, then onus is upon the AO to prove it contrary that it is an international transaction. Here, the AO has drawn presumption on the ground that there was delay in allotment of shares, hence it is an international transaction of capital financing. Such a presumption cannot change the character of transaction. This issue of re-characterization of share application money into loan has been considered at length by the Hon'ble Bombay High Court in the case of Vodafone India Services (P) Ltd. Vs Union of India reported in 368 ITR 1, wherein Hon'ble High Court after detailed discussion has concluded that provisions of chapter X are not applicable to international transaction of issuance of equity shares. Here in this case it has been brought on record that the shares have been allotted to the assessee company after some time gap. Therefore, such shares ostensibly fall into capital account that cannot be treated as capital financing which needs to be benchmarked for the purpose of determining the ALP by imposing any kind of interest. The TPO/AO cannot disregard any apparent transaction and substitute it by re-characteri....
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....he learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in levying interest u/s.234A/B/C of the Act. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in initiating penalty u/s.271(1)(c) of the Act. 182. The first issue raised by the assessee in ground no. 1 in its appeal is that the learned CIT (A) erred in confirming the disallowances of Rs. 17,02,382/- on account of late payment of employee contribution towards EPF and ESI. 183. At the outset we note that the similar issue has been raised by the assessee in ITA No. 1654/Ahd/2017 in ground no. 1 which has been decided againt the assessee. For the detailed discussion please refer the relevant paragraph No.155 of this order. Thus we hold that the principles laid down in above paragraph will mutatis mutandis apply herein also. In the result ground of appeal raised by the assessee is dismissed. 184. The second issue raised by the assessee in ground nos. 2 to 5 in its appeal is that the learned CIT (A) erred in confirming the disallowances of Rs. 2,14,130/- under section 40(a)(ia) of the Act. 185. The Assessee during the year und....
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.... contention. However, it has been seen that the appellant has not even furnished any details and evidences in support of its submission in the present appellate proceedings also and this opportunity remained un-availed by the appellant. Further, the appellant has failed to prove (hot the recipient party did not have any business connection or permanent establishment in India and therefore, in absence of any details and evidences the claim of the appellant is not verifiable. Thus there is no merit in the submission of the appellant. The appellant has simply contested the ground on the plea that the AO has ' not granted opportunities to furnish the details and evidences. Even if the appellant's contention is found acceptable, then also the appellant could have submitted the details and evidences in support of its contention in the present appellate proceedings as it has the opportunity to submit the same, which has not been done so. This amply shows that the appellant does not have any case 1o put-forth in its support, in view of the aforesaid discussion, the disallowance made by the AO is found correct and justified and hence the same is confirmed. 189. Being agg....
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.... 192.1 In the result the appeal of the assessee is partly allowed. • Coming to ITA No. 1815/AHD/2017 for the assessment year 2014-15, an appeal by the Revenue 193. The Revenue has raised the following grounds of appeal: 1. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance u/s.36(1)(iii) of the IT Act amounting to Rs. 79664825/-. 1.1. The Ld.CIT(A) has failed to appreciate that the assessee had invested more than Rs. 100 Crore in new capital assets which was extension of existing business and therefore the provisions of Section 36(1)(iii) was squarely applicable. 1.2. That the Ld.CIT(A) has failed to appreciate that the assessee had paid considerable amount of interest on borrowings made and it had no such interest free cash flow available to invest in acquisition of such capital asset (CWIP). 1.3. That the Ld.CIT(A) has failed to appreciate that the onus was on the assessee to demonstrate that the assessee had such interest free cash flow to invest in such new assets (CWIP). 2. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance u/s.14A amounting to Rs. 3,91,90,512/-. ....