TaxTMI 
TaxTMI 
2025 (9) TMI 167
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.... also noted that suo moto disallowance made by the assessee had no relation with its accounts and could not be correct. 03. The said matter travelled upto to High Court and Hon'ble High Court vide order dated 17th September,2019, in ITAT No. 40 of 2015 in GA No. 672 of 2015 and ITAT No. 96 of 2019 in GA No. 1128 of 2019 for A.Y.s 2009-10 and, set aside the Tribunal orders restoring the issue back to the file of the Tribunal for deciding legal and factual issue arising out of Section 14A of the Act as well as 80IA of the Act. There are two issues before us to be adjudicated first in respect of disallowance u/s 14A and second whether the reduction of electricity duty in competition of profits eligible for deduction under Section 80IA of the Act is to be made. First, we shall adjudicate the A.Y. 2008-09. ITA No. 1144/KOL/2012 for A.Y. 2008-09 04. The first issue which is ground no.2 of the assessee's appeal for A.Y. 2008-09, is against the disallowance u/s 14A of the Act read with Rule 8D of the Rules. 05. The facts in brief are that the assessee earned exempt income of Rs.235.40 crores which comprised of interest from tax-free bonds amounting to Rs.23.84 crores and di....
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....ing to do with the Assessee's investment function. However, the salaries of the Treasury Vertical had to be apportioned as the employees performed multiple functions, one of which was handling investments. The Assessee apportioned the salaries of the Treasury Vertical of Rs. 0.74 crores in the ratio of its investments which could yield exempt income to the total assets as per its balance-sheet as on 31 March 2008. On such basis, 20% of the salaries of the Treasury Vertical, Le. Rs. 14,71,903 was attributed to the handling of the Assessee's investments which could have yielded exempt income. Please see page to of Paper Book for AY 2008-09 The next step was to apportion the other expenses/overheads relatable to the investments which could have yielded exempt income. As stated hereinabove, the expenses/overheads relating to the Corporate Treasury Department was apportioned in the ratio between salaries of the Treasury Vertical to the total salaries of the Corporate Treasury Department (ie. Rs. 1.44 crores Rs. 0.74 crores/Rs. 1.17 crores Rs. 0.91 crores). Adopting the same apportionment ratio as in respect of salaries, 20% of the figure so obtained, i.e. Rs. 18,24,432 was consi....
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....same reasons. 09. The assessee at the outset submitted that the issue is squarely covered by the decision of Kolkata Tribunal in assessee's own case for A.Y. 2010-11, in ITA no. 1068/KOL/2017 and 1222/KOL/2017 and for A.Y. 2011-12, in ITA No. 1166/KOL/017 and 1223/KOL/2017, wherein on identical facts the Tribunal while accepting the methodology for suo moto disallowance computed by the assessee, held that Rule 8D of the Rules cannot be invoked if disallowance u/s 14A of the Act is done on reasonable basis. It was also submitted that the said decisions of the Tribunal were challenged by the Revenue before the Hon'ble Kolkata High Court and Hon'ble Kolkata High Court having considered the assessee's case has dismissed the Revenue's appeal vide orders dated 21st July, 2025, a copy of which is available at annexure no. 3 and 4. 010. The ld. Counsel for the assessee submitted that the main plea of the department as has been affirmed by the Tribunal in the first round that separate books of account not maintained for the expenditure incurred in relation to non-taxable income cannot be ground to reject the assessee's apportionment of income incurred in relation to non-taxabl....
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....Similar view has been expressed by the Bombay High Court in the case of CIT vs. Ultratech Cement Ltd. (Supra) forA.Y. 2008-09 by upholding the order of the tribunal on this issue by dismissing the appeal of the revenue though no substantial question of law raised by the department. 013. Besides, we note that assessee has made a very rational and reasonable computation of expenses in regard to expenses incurred in relation to earning of exempt income by making an apportionment of expenses incurred by way of salary which was not being disputed by the department to be not correct but the only reason for disallowance was that no separate books of accounts were maintained and the expenses offered by the assessee under section 14A Rule 8D of the Rules were not having any relation with the accounts and therefore, not correct. Now the issue is clearly covered by the decision in A.Ys. 2010-11 and 2011-12. We therefore, respectively, following the decision of the Coordinate Bench, in assessee's own case, for the aforesaid assessment year, set aside the order of the learned CIT (A) and direct the learned AO to delete the disallowance made under Section 14A Rule 8D of the Rules. It is f....
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.... assessee. 017. On Appellate proceedings, the Learned CIT (A) allowed the appeal of the assessee which was also reversed by the tribunal by restoring the order of the AO, by holding that the AO was correct in reducing the eligible profit by the amount of electricity duty. Now this issue has been set aside to the tribunal again by the Hon'ble High Court and hence, is being decided in the following Paras. 018. The ld. Counsel for the assessee submitted that Section 80IA of the Act, provides that where any goods or services held for the purpose of the eligible business are transferred to any other business carried on by the assessee and the consideration as recorded in the accounts does not correspond to the market value then for the purpose of deduction, the profits and gains of such eligible business shall be computed as if the transfer had been made at the market value as on that date. Further, explanation to Section 80IA(8) of the Act defines market value as the price that such goods would ordinarily fetch on sale in the open market. The ld. Counsel for the assessee submitted that the Hon'ble Apex Court in assessee's own case for Assessment Year 02-03 in Civil Appeal No.....