TaxTMI 
TaxTMI 
2025 (1) TMI 1606
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.....5 of 2014 dated 11.02.2014 of CBDT and to this effect even an amendment was made by Finance Act, 2022 by way of insertion of Explanation to Section 14A of the Income Tax Act, 1961." 2. "On the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the assessee is entitled to claim 10% additional depreciation in the year under consideration ignoring that there is nothing in the statute which allows carry forward of additional depreciation and thus there cannot be any presumption that unless it is specifically denied, carry forward has to be allowed ". 3. "On the facts and circumstances of the case, the Ld. CITIA) erred in holding that the expenditure incurred by the assessee was a normal business expenditure towards sale of products and hence it is allowable as revenue expenditure ignoring the fact that the expenditure incurred towards obtaining "Certificate of Suitability (COS)" and filing of "Drug Master File (DMF)" are capital in nature as these expenses give enduring benefit to the business of the assessee spread over several years and therefore the Ld CIT(A) ought to have held it as capital in nature". 4. "On the facts and circumst....
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....e which allows carry forward of additional depreciation and thus there cannot be any presumption that unless it is specifically denied, carry forward has to be allowed". 3. "On the facts and circumstances of the case, the Ld.CIT(A) is erred in holding that the expenditure incurred by the assessee was a normal business expenditure towards sale of products and hence it is allowable as revenue expenditure ignoring the fact that the expenditure incurred towards obtaining "Certificate of Suitability (COS)" and filing of "Drug Master File (DMF)" are capital in nature as these expenses give enduring benefit to the business of the assessee spread over several years and therefore the Ld CIT(A) ought to have held it as capital in nature". 4. "On the facts and circumstances of the case, the Ld.CIT(A) is erred in ignoring the ratio laid down by the Hon'ble Supreme Court in the case of Ballimal Navi Kishore Vs CIT reported in 224 ITR 414 (SC) in allowing the expenditure incurred towards obtaining COS and DMS as revenue expenditure". 5. "On the facts and circumstances of the case, the Ld.CIT(A) is erred in treating the "Focus Market Scheme (FMS)" and "Focus Product....
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....n nature as these expenses give enduring benefit to the business of the assessee spread over several years and therefore the Ld CIT(A) ought to have held it as capital in nature". 4. "On the facts and circumstances of the case, the Ld. CIT(A) is erred in ignoring the ratio laid down by the Hon'ble Supreme Court in the case of Ballimal Navi Kishore Vs CIT reported in 224 ITR 414 (SC) in allowing the expenditure incurred towards obtaining COS and DMS as revenue expenditure". 5. "On the facts and circumstances of the case, the Ld.CIT(A) is erred in treating the "Focus Market Scheme (FMS)" and "Focus Product Scheme (FPS)"as capital receipts, claims of which have been made in appellate stage by way of filing a letter and ignoring the fact that the assessee has never made the claim in the return of income filed u/s 139 for the year under consideration". 6. On the facts and circumstances of the case, the Ld CIT(A) erred in treating the SHIS, FMS and FPS as capital receipts ignoring the findings of the Assessing Officer in the remand report, wherein the AO has strongly objected the admission of fresh claims" 7. On the facts and circumstances of the c....
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....regard are that the assessee had received dividend income of Rs. 81,792/- during the year and had claimed the same as exempt. The assessee suo moto disallowed the expenses to the tune of Rs. 43,756/- u/s 14A at the time of filing of the return. However, during the course of the assessment, Ld. AO invoked Rule 8D and made a disallowance of Rs. 11,79,942/-. In appeal, Ld. CIT(A) vide his order dated 21.09.2015 partly allowed the assessee's claim and directed the Ld. AO to restrict the disallowance to the extent of exempt income i.e. Rs. 81,792/-. 5.2 Before us, Ld. AR has submitted that the assessee had the following interest-free funds available during the year against the investment of Rs. 275,oo,ooo/- in the shares. Share Capital 12.10 Cr. Reserved and surplus 195 Cr. Total 207.10 Cr. Since the assessee had sufficient own funds, thus no disallowance of interest should have been made, as none of the interest-bearing funds have been used for the purpose of investment in shares. Ld. AR has, further, pointed out that the issue is squarely covered by the decision of the co-ordinate benches in its own case for earlier years as under: AY &n....
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....arise that the investment is made out of funds so available with the assessee. We further find that the Co-ordinate Bench of the Tribunal in assesee's own case in Aarti Drugs Limited Vs. Addl. CIT, in ITA No. 6783-84/MUM/2014, vide order dated 10/02/2017, for the assessment years 2010-11 and 2011-12, following the principle laid down by the Hon'ble Jurisdictional High Court in aforesaid decision directed the deletion of addition made u/s 14A r.w.r 8D(2) (ii). We find that the Hon'ble Jurisdictional High Court in Nirved Traders (P.) Ltd. Vs. Dy. CIT, I.T. Appeal No.149 of 2017, vide judgement dated 23.04.2019, has held that disallowance under section 14A of the Act cannot be more than exempt income. Thus, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, ground no.1, raised in Revenue's appeal is dismissed." As the facts for the present year are identical, respectfully following the decision of the co-ordinate bench, we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue on this issue. The disallowance u/s 14A r.w Rule 8D is accordingly restricted to Rs. 81,792/-. 6. Ground No. 2 : Disallowance ....
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.... had acquired and installed new plant and machinery in the FY.2006- 07, that it had claimed 50% of additional 20% depreciation (i.e., 10% additional depreciation) u/s.32(1)(iia) of the Act in the corresponding AY.2007-08, that the new machinery was acquired after 01/10/2006, that the machinery was put to use for the purpose of business for a period of less than 180 days, that u/s. 32(1)(iia), read with the second proviso to section 32(1)(ii) of the Act, for the AY. 2007-08, the assessee was granted benefit of 50% of the 20% of the amount of depreciation allowable. Dispute 6783-83/M/14910-11(11-12- Aarti Drug Limited 5 arose with regard to the allowance of the balance 10% depreciation in the next AY. i.e. for the AY.2008-09. The AO, as well as the FAA disallowed the claim of the assessee, whereas the Tribunal, allowed the appeal of the assessee. Challenging the same, the Revenue filed appeal before the Hon'ble court raising the following two substantial questions of law: "(1) Whether the Tribunal is correct in extending the benefit of section 32(1)(iia) of the Act to the next AY. When the Income tax Act does not provide for such carryover, thereby violating the legal princi....
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.... in the said clause is very significant. The benefit which is to be granted is per cent additional depreciation. By virtue of the proviso referred to above, only per cent can be claimed in one year, if plant and machinery is put to use for less than 180 days in the said financial year. This would necessarily mean that the balance 10 per cent additional deduction can be avalled of in the subsequent AY., otherwise the very purpose of insertion of clause (ila) would be defeated because it provides for per cent deduction which shall be allowed. 10. It has been consistently held by this court, as well as the apex court, that the beneficial legislation, as in the present case, should be given liberal interpretation so as to benefit the 6783-83/M/14910-11(11-12- Aart/ Drug Limited 6 assessee. In this case, the intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefit, which was restricted by the proviso to only half of the same being granted in one AY., if certain condition was not fulfilled. But, that, in our considered view, would not restrain the assessee from claiming the balance of the benefit in the subsequent A....
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....ted as revenue expenditure. The revenue is in appeal before us on this ground. 7.2 We have heard the rival submissions and perused the judicial pronouncements placed before us. It is seen that the issue is squarely covered in favour of the assessee by the orders of the co-ordinate benches for AY 201011 as well as for AY 2012-13. The relevant portion of the order of the co-ordinate bench in ITA No. 2503/Mum/2021 for AY 2012-13 is reproduced as under: "20. We have considered rival submission and perused the material available on record. We find that the Co-ordinate Bench of the Tribunal in assessee's own case in ACIT Vs. Aarti Drugs Limited, in ITA No. 5526/MUM/2013, vide order dated 14/01/2015, for the assessment year 2009-10 decided a similar issue in favour of the assessee by observing as under: "7. We have carefully considered the rival submissions and perused the record. Admittedly the expenditure incurred is not preproduction expenditure. The assessee has been marketing products elsewhere and thus it can be said that the assessee is already in the business of manufacture and sale of drugs. To expand the business in certain countries it has to obtain ....
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....sibility of the additional claims. The Ld. AO relied upon to the decision of the Hon'ble Supreme Court in the case Goetze India Ltd. v/s CIT (2006) 157 taxmann.com 1 (SC) in support of his proposition that the assessee could not make a fresh claim otherwise than by filing a return or a revised return of income. However, Ld. CIT(A) observed that the above decision applied to the assessing officer and there was no bar on the appellate authority to admit an additional claim raised for the first time during the appellate proceedings. Accordingly, after considering the remand report and the submissions made by the assessee, Ld. CIT(A) observed that the co-ordinate bench had already decided the issue in the previous year in ITA no. 2503/Mum/2021 in favour of the assessee. He, therefore, held that the incentives received by the assessee towards FMS, FPS & SHIS on export during the year under consideration should be treated as capital receipt. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. 8.2 We have heard the rival submissions and perused the material placed before us. It is seen that the issue is squarely covered by the decision of the coordinate benc....
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....licy as under: "With an objective to promote investment in upgradation of technology of some specified sectors as listed in Para 3.16.4 below, Status Holders shall be entitled to Incentive scrip @ 1% the FOB Value of exports made during 2009-10 and during 2010-11 of these specified sectors in the form of duty credit. This shall be over and above the duty credit scrip claimed/availed under this chapter." 45. In this regard, it is also relevant to note that the AO in its remand report dated 11/04/2019, forming part of the paper book from pages No. 117-120 after examining the submissions of the assessee and schemes and various facts placed on record noted that the salient objectives of the FPS/FMS/SHIS subsidy received under the Foreign Trade Policy is to increase percentage share of global trade by increasing the competitiveness in selected markets, technological upgradation and expanding employment opportunity. In para 7.2 of its remand report, the AO further stated that the purpose of introduction of the schemes was to encourage industries, which require industrial growth, technological upgradation, and development. 46. Accordingly, the learned CIT(A) cam....
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....Revenue's Special Leave Petition in PCIT Vs. Nitin Spinners Ltd., [2021] 283 Taxman 2(SC), against the aforesaid decision of the Hon'ble Rajasthan High Court. Thus, when the objective of the aforesaid subsidies has been admitted to be to encourage industries by providing industrial growth, technological upgradation, and development, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue in treating the amount received by the assessee under the aforesaid schemes as capital receipt. As a result, grounds no. 9-13 raised in Revenue's appeal are dismissed." As the facts in the current year are identical, respectfully following the order of the co-ordinate bench, we hold that the incentive received on account of FMS, FPS & SHIS are to be treated as capital receipt. 9. In the result, the appeal of the revenue on this issue is dismissed. ITA No. 3071/mum/2023 - AY 2014-15 10. As all the grounds in this year are identical to the grounds raised in AY 2013-14, the decision for AY 2013-14 hereinbefore, shall apply mutatis mutandis for this year also. ITA No. 3068/Mum/2024 - AY 2015-16 11. As ground Nos. 1 to 9 for this year are ident....