TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1608
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....ncome-tax Act, 1961 [hereinafter referred to as "the Act"], on 18.12.2017 for the Assessment Year 2015-16. Facts of the Case 2. The assessee is a company engaged in the business of Generation and sale of wind energy, providing erection and commissioning services of windmills and operation and maintenance of wind farms. For the year under consideration, the assessee filed its return on 30.11.2015, declaring Nil income (loss of Rs. 13,94,95,365). The case was selected for scrutiny under CASS. Notice u/s 143(2) was issued on 08.04.2016. Thereafter notices u/s 142(1) were issued on multiple occasions. 3. During the course of the scrutiny assessment proceedings, the Assessing Officer examined the books of account, the investments made b....
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....nge in facts. 5. Aggrieved by the order of CIT(A), the Revenue is in appeal before us raising following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 5,32,41,825/- made under section 14A read with Rule 8D under the normal provisions, holding that the disallowance under section 14A read with Rule 8D cannot exceed the exempt income, in the absence of any such restriction being there in the relevant section or rule. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the adjustment made on account of disallowance of Rs. 5,32,41,825/- under section 14A in computation of book profit....
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...., submitted that the Assessing Officer was not justified in making the disallowance of Rs. 5.32 crores under section 14A read with Rule 8D, both under the normal provisions as well as while computing book profit under section 115JB. It was contended that no exempt income was earned during the year under consideration, and therefore, the provisions of section 14A had no application. Reliance was placed on various judicial pronouncements including Keti Construction Ltd. [2024] 166 taxmann.com 607 (Gauhati), Williamson Financial Services Ltd. [2024] 166 taxmann.com 485 (Hyd. Trib.), and Era Infrastructure (India) Ltd. [2022] 448 ITR 674 (Delhi), wherein it has been held that in the absence of exempt income, no disallowance under section 14A is....
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....contention of the assessee and following the judgment of the Hon'ble Jurisdictional High Court and the coordinate benches of the Tribunal, deleted the disallowance both under the normal provisions as well as under section 115JB. It is by now a settled principle of law that in absence of any exempt income, there cannot be any disallowance under section 14A. The Hon'ble Gujarat High Court in CIT v. Corrtech Energy (P) Ltd. [2014] 45 taxmann.com 116 (Guj.) held that when no exempt income is earned by the assessee in a given year, no disallowance under section 14A is called for. Similar view has been taken by the Hon'ble Delhi High Court in CIT v. Era Infrastructure (India) Ltd. [TS-577-HC- 2022(DEL)] and by several benches of the Tribunal incl....
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....o. 57 ITR 299 (SC) and R. Tex Manufacturing Co. 227 ITR 260 (SC), he held that the slump purchase price cannot be apportioned amongst individual assets for the purpose of claiming depreciation. 13. The CIT(A), however, noted that in the first year of acquisition, i.e. A.Y. 2012-13, depreciation on the very same assets had been allowed by the coordinate bench in assessee's own case. It is a settled proposition of law that once depreciation is allowed in the initial year of acquisition, the same cannot be disturbed in the subsequent years unless there is a change in facts or circumstances. In support of this principle, reliance can be placed on the decision of the Co-ordinate Bench in Bodal Chemicals Ltd. v. DCIT [2019] 112 taxmann.com 217....
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....nticated basis of "actual cost" for the purposes of section 32. 15. We have further perused the working placed on record by the assessee [which is also reproduced by the CIT(A) in his order on page 10] to substantiate its claim. As seen therefrom, the business undertaking acquired under slump sale consisted of various current assets, current liabilities, and fixed assets. The total consideration agreed under slump sale was Rs. 1 crore. For accounting purposes, the assessee recorded the current assets and current liabilities at their book values and determined the balancing figure as attributable to fixed assets. On this basis, the cost of fixed assets acquired was worked out at Rs. 19,05,66,470/-. The assessee has then apportioned the sa....