TaxTMI 
TaxTMI 
2025 (5) TMI 2191
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....sions, we find that while deciding identical issue in assessee's case in ITA No. 5925/Mum/2010 in A.Y. 2007-08, the Tribunal has held as under: "30. Having considered rival submissions and perused the materials on record. We find that the coordinate Bench has decided the issue in favour of the assessee in Assessment Year 2002-03. Whereas, in Assessment Years 2004-05 and 2005- 06, issue was restored back to the Assessing Officer for verification. While giving effect to the order of the Tribunal, the Assessing Officer has allowed assessee's claim. 31. Considering the above, we direct the Assessing Officer to allow assessee's claim of deduction u/s. 80IA of the Act in respect of rental income. This ground is allowed. 32. The dispute in Ground No.8 is with regard to taxability of interest on income tax refund. 33. Briefly the facts are, in the year under consideration, the assessee had received certain amount towards interest on income tax refund. Whereas, it had also paid interest to the Department under various provisions of the Act. In the computation of income, the assessee had set off the interest paid against the interest received and offered n....
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.... out by it does not result in loss of revenue and there could not be any prohibition for the same, allowed it. That is how the Assessing Officer's order is set aside. We do not see how any larger controversy or question arises for our consideration. Mr.Pinto would refer to Section 57 of the Income Tax Act, 1961 in that regard and submit that this course would be adopted by other Assessees as well and in that event the order passed by this Court would come in the way of the Revenue in investigating and probing such exercise by other Assessees. 4. We do not see how this order can be cited as precedent in as much as the Assessee before the Tribunal and before us paid interest to the Income Tax Department amounting to Rs.10,26,906/-. The Assessee claimed that this was business expenditure, and this should have been allowed. The Assessee has received the interest of Rs.1,07,57,930/-. It was submitted that the amount of interest paid by the Assessee should have been allowed to be set off against the interest deposited with the Department and taxed in the hands of the Assessee. The argument was that the interest paid to and received from is the same party i.e. Government of I....
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....ed return of income on 17.03.2009, declaring income of Rs.1923,71,32,402/-. In course of assessment proceeding, the Assessing Officer (AO) noticed that the assessee had claimed depreciation on let out office premises. He further observed that the rent received from such let out office premises was offered to tax under the head 'income from house property'. He further noticed that, though, the assessee had reduced the Written Down Value (WDV) of the let-out premises from the value of block of assets, however, in course of assessment proceeding, the assessee claimed that it is entitled to depreciation on the entire block of assets without reducing WDV of the let out premises. In support of such contention, assessee furnished a detailed note supported by judicial precedents. The Assessing Officer, however, did not accept assessee's claim. He observed that while computing 'income from house property', the assessee has claimed 30% deduction towards maintenance charges out of the annual rental value. Hence, assessee cannot be allowed further deduction by way of depreciation. Accordingly, he disallowed assessee's claim. 5. Though, assessee contested the disallowance in appeal pre....
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....med under section 24 of the Act. 24. Before proceeding further, it is pertinent to note certain provisions of the Act that are relevant to the issue at hand. The term "Block of assets" is defined in section 2(11) of the Act, as under: - "block of assets" means a group of assets falling within a class of assets comprising- (a) tangible assets, being buildings, machinery, plant or furniture. (b) intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, in respect of which the same percentage of depreciation is prescribed;" 25. Further, the relevant provisions of section 32, reads as under: - ―Depreciation 32.(1) In respect of depreciation of- (i) buildings, machinery, plant or furniture, being tangible assets. (ii) know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, t....
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....owed in respect of that block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i). 27. It is the plea of the assessee that since the property was acquired in the assessment year 1987-88 and forms part of the block of assets, therefore, the lower authorities have erred in carving out the depreciation for this property and disallowing the same. Since the assessee is the owner of the property from the assessment year 1987-88 and the same was also used as one of its office premises in preceding years, therefore, we are of the view that the conditions laid down in section 32 of ownership of the asset and usage for the purpose of business are satisfied in the present case. We find that the only basis on which the AO/learned CIT(A) disallowed the depreciation is that the assessee has rented out the property during the year and offered the income under the head "Income from House Property", after claiming deduction under section 24 of the Act. In this regard, it is pertinent to note that the property in question forms part of the block of assets since the assessment year 1987-88 and the deprecia....
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....2(1) (iii) and also taxing of balancing charge under section 41(2) in the year of sale. Instead of these two provisions, now whatever is the sale-proceed of sale of any depreciable asset, it has to be reduced from the block of assets. This amendment was made because now the assessees are not required to maintain particulars of each asset separately and in the absence of such particular, it cannot be ascertained whether on sale of any asset, there was any profit liable to be taxed under section 41(2) or terminal loss allowable under section 32(1) (iii). This amendment also strengthen the claim that now only detail for "block of assets" has to be maintained and not separately for each asset. 33. Having regard to this legislative intent contained in the aforesaid amendment, it is difficult to accept the submission of the learned counsel for the Revenue that for allowing the depreciation, user of each and every asset is essential even when a particular asset forms part of 'block of assets'. Acceptance of this contention would mean that the assessee is to be directed to maintain the details of each asset separately and that would frustrate the very purpose for which the....
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....employees' gratuity fund and provident fund created by the assessee. However, while granting approval, the CIT has observed that the expenses borne by the assessee for administration of the funds/trusts shall not be allowed as deduction while computing the profit and gains from business. The issue arising for consideration, is whether the aforesaid condition imposed by CIT is valid. On a reading of Section 36(1)(iv) of the Act, it appears that any sum paid by the assessee as an employer by way contribution towards recognized provident fund is to be allowed as deduction subject to such condition as the Board may prescribe. Whereas, Section 36(1)(v) of the Act says any sum paid by the assessee as an employer by way of contribution towards an approved gratuity fund has to be allowed as deduction. Unlike Section 36(1)(iv) Section 36(1)(v) is not subject to any condition. 39. According of approval for recognized provident fund and gratuity fund are provided under Part-A and Part-B of the 4th Schedule to the Income Tax Act. While Rule-4 under Part-A to the 4th Schedule prescribes the condition for approval of recognized provident fund, Rule-2 and 3 prescribes the conditions for ....
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.... allow assessee's claim. This ground is allowed. 13. In Ground No.5, assessee has challenged disallowance of deduction u/s. 80IA of the Act on other income, being rent received from housing accommodation allotted to employees. 14. Having considered rival submissions, we find, identical issue came up for consideration past assessment years. In the latest order passed in assessment year 2007- 08 (Supra), the Coordinate Bench has held as under: - "26. In Ground No.7, the assessee has challenged the disallowance of deduction of Rs.65,090/- u/s. 80IA of the Act qua rental income. 27. Briefly the facts are, while verifying assessee's claim of deduction u/s. 80IA of the Act in course of assessment proceeding, the Assessing Officer noticed that the assessee had not excluded miscellaneous/other income not derived from the profits of the undertaking, while claiming deduction u/s.80IA of the Act. On further examination, he found that the assessee had claimed u/s.80IA in respect of rental income of Rs.65,090/-. Being of the view that rental income cannot form part of profit derived from the undertaking, the Assessing Officer disallowed assessee's claim. Such disallowanc....
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....challenged deletion of disallowance made u/s. 43B of the Act. 57. Briefly the facts are, in course of assessment proceeding, the AO noticed that certain payment aggregating to Rs.9,60,89,112/-, though were covered under Clause-(b) to (f) of Section 43B of the Act, however, assessee has not disallowed them while computing its income. He, therefore, called upon the assessee to explain why such payments should not be disallowed. In response, assessee submitted that such payments are not covered u/s. 43B of the Act. It was submitted by the assessee that as per Explanation-2 to Section 43B of the Act, which only refers to Clause (a) of Section 43B "any sum payable" would mean a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law. It was submitted by the assessee that since Explanation-2 does not refer to Clause (b) to (f) of Section 43B, the meaning of any sum payable as provided under Explanaiton-2 will not cover the payments falling under clause (b) to (f) of Section 43B. The AO, however, did not accept the contention of the assessee that disallowed the deduction claimed. A....
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....ns and perused the materials on record. It is a common point between the parties that the issue has been consistently decided in favour of the assessee by the Tribunal in past assessment years. 64. Having perused the materials on record, we find that from AY 1988- 89 onwards identical issue has been decided in favour of the assessee not only by the Tribunal but even by the Hon'ble High Court. In fact in the latest order passed for AY 2005-06. The Tribunal has decided the issue in favour of the assessee. 65. Respectfully following the consistent view of Hon'ble Jurisdictional High Court and coordinate Bench, we uphold the decision of learned First Appellate Authority by dismissing the ground." 24. Facts being identical, respectfully following the decision of the coordinate Bench, we uphold the order of learned First Appellate Authority by dismissing the ground. 25. In Ground No.3, Department has challenged deletion of disallowance made of rural development expenses of Rs.2,91,22,561/-. 26. Having considered rival submissions, we find identical issue was decided by the Coordinate Bench in past assessment years in favour of the assessee. In the latest order ....
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....t of production of advertisement films. 72. Briefly facts are, in course of assessment proceeding, the AO noticed that the assessee had debited Rs.45,26,190/- towards cost of production of advertisement films. 73. Being of the view that such expense is of capital nature, the AO disallowed it. While deciding the issue, learned First Appellate Authority followed the decision taken in earlier assessment year and allowed assessee's claim. 74. Before us, it is a common point between the parties that the issue has been consistently decided in favour of the assessee in past assessment years. 75. Having perused the material on record, we find that the issue first time came up for consideration before the Tribunal in assessees's own case in AY 1976-77. While deciding the issue, the Tribunal allowed assessee's claim. Subsequently, the Tribunal reiterated the same view in AYs 1976-77 in AYs 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06. Learned counsel further brought to our notice that up to AY 2002-03, the Department has accepted the decision of the Tribunal. 76. Be that as it may, respectfully following the consistent view of the Tribunal in as....
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....ind, in assessee's own case in Assessment Years 2002-03- and 2003-04, the Tribunal had allowed assessee's claim of revenue expenses. Facts being identical, respectfully following the decisions of the Coordinate Benches, we allow assessee's claim and direct the Assessing Officer to delete the disallowance. Of course, the depreciation allowed has to be withdrawn. This ground is allowed." 36. Facts being identical, respectfully following the decision of Coordinate bench, we uphold the decision of the learned First Appellate Authority while dismissing the ground. 37. In Ground No.8, the Department has challenged allowance of employee's stock option cost amounting to Rs.5,55,63,521/-. 38. Having considered rival submissions, we find identical issue came up for consideration in assessee's case in A.Y. 2008-09. While deciding the issue in order dated 21.05.2025 in ITA No. 5982/Mum/2011, the Coordinate Bench has held as under: "23. Briefly the facts are, while verifying the computation of income filed by the assessee, the Assessing Officer noted that though the assessee had added an amount of Rs.4,89,82,986/- to profit as per books towards employees' compensation cost und....
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....upheld order of learned First Appellate Authority allowing deduction. Facts being identical, respectfully following the consistent view of the Coordinate Bench, we direct the Assessing Officer to allow assessee's claim. This ground is allowed." 39. Facts being identical, respectfully following the decision of the Coordinate Bench, we uphold the decision of learned First Appellate Authority by dismissing the ground. 40. In Ground No.9, the dispute is with regard to nature of receipt of Rs.3,55,77,205/- from sale of Certified Emission Reduction (CER) commonly known as carbon credit, whether capital or revenue in nature. Though the assessee claimed that the sale of CER is not out of any business activity, hence, has to be treated as capital, hence, has not chargeable to tax, the AO, however, disallowed assessee's claim and treated it as income of the assessee. The assessee contested the aforesaid disallowance before learned First Appellate Authority. After considering the submissions of the assessee in the context of facts and materials on record, learned First Appellate Authority relying upon certain judicial precedents held that receipts are in the nature of capital receipt, h....
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....Power P. Ltd. (Supra), the Hon'ble jurisdictional High Court, while considering the identical issue, has taken note of the view expressed by Hon'ble Andhra Pradesh High Court in case of CIT vs. My Home Power Ltd. vs. DCIT, [2013] 21 ITR (T) 186, Hon'ble Karnatka High Court in the case of CIT vs. Subhash Kabini Power Corporation Ltd. [2016] 385 ITR 592 (Kar.) has agreed with the decision of the Tribunal that receipt from sale of carbon credit are in the nature of capital receipt. 45. In view of the aforesaid, we do not find any justifiable reason to interfere with the decision of learned First Appellate Authority. This ground is dismissed. 46. In Ground No.10, Department has challenged the deletion of addition of 10,02,60,458/-, being dividend received from M/s Alexandria Carbon Black Co. It is a common point between the parties that in past assessment years the issue has been decided against the assessee and in favour of the Department. 47. Having considered rival submissions, we find while deciding identical issue in assessee's case in A.Y. 2007-08 (supra), Tribunal has held as under: "43. The additional Ground No.1 is on the issue of taxability of dividend recei....
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....late Authority. 51. Being of the view that expenses has been incurred in normal course of business learned First Appellate Authority allowed the deduction. However, he directed the AO to recompute the capital gain arising on sale of Vikram Ispat Unit in A.Y. 2010-11 after withdrawing deduction allowed for the expenditure. 52. We have considered rival submissions and perused the materials on record. Undisputedly, the expenditure in dispute was incurred in connection with the sale of Vikram Ispat Unit. 53. Before us, it is the contention of learned counsel for the assessee that before actual sale some pre-sale work were required to be done, which necessitated the expenditure. He submitted, since expenditure was incurred in this year and the sale was effected in subsequent year, the assessee had claimed the deduction in the year under consideration. 54. Learned DR submitted, since the expenditure is linked to sale of asset, it has to be treated as capital expenditure and can be allowed as deduction while computing capital gain. 55. Having considered rival submissions, we are of the view that the expenditure incurred, in any, case has to be allowed either as revenue expe....
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....s 80IA of the Act. 55. This issue has been dealt with by the ld. CIT(A) vide his order in page 15-16, para 23.5 & 23.6. We found that the issue has been decided by the Tribunal in assessee's own case in its favour in assessment years 1994-95 to 1998-99 and the Department is not in appeal against the order of the Tribunal. Respectfully following the order of the Tribunal, we do not find any reason to interfere with the order of ld. CIT(A) on this issue.." 110. Respectfully following the above decision, we do not find any reason to interfere with the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly." 110. The learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case and no change in facts and law was alleged in relevant assessment year. This issue has been decided in favour of the assessee in the preceding years also. Therefore, respectfully following the judicial precedent in assessee's own case cited supra, ground no.9, raised in Revenue's appeal is dismissed. 77. In the absence of any allegation regarding the change in facts or in law in....
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.... analysis, we have found that factual position relating to the issue in dispute in the impugned assessment year is identical to the facts involved in A.Ys. 2003-04 to 2005-06. Therefore, we do not find any justifiable reason to deviate from the view expressed consistently by the Coordinate Bench in assessee's own case in discussed above. In view of aforesaid, we uphold the decision of learned First Appellate Authority by dismissing the grounds raised." 61. Facts being identical, respectfully following the decision of the Coordinate bench, we uphold the order of learned CIT(A) by dismissing the ground. 62. In Ground No.14, the Department has raised the issue of taxabili ty of TUF subsidy. 63. Having considered rival submission, we find that this is a recurring issue between the parties from past assessment year . While deciding the issue, in the latest order passed in A.Y. 2007-08 (Supra), the Coordinate bench has held as under: "46. In additional Ground No.2, the assessee has challenged the taxability of subsidy received from the Central Government under technology upgradation and fund (TUF). It is the case of the assessee that the subsidiary received, being of ca....
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.... debited to the profit and loss account. Thus, assessee itself treated it as a revenue income and not capital expenditure. However, in assessee's own case in ITA number 4220 and 4704/M/2014 dated 24/2/2020 it has been held that the subsidy received by the appellant company under technology upgradation fund scheme is capital receipt. The coordinate bench held as under:- "8. Ground No. 11: 11. "On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in directing to treat the interest subsidy of Rs. 15,23,25,727/- as capital in nature." 38.1 In ground No.11 the Revenue has assailed the findings of CIT(A) in holding interest subsidy from Technology Up gradation Fund(TUF) Rs. 15,23,25,727/- as capital in nature. The ld. Authorized Representative for the assessee submitted that the Hon'ble Rajasthan High Court in the case of PCIT vs. Nitin Spinners Ltd. in DB Income Tax appeal No.31/2019 decided on 19/09/2019 has held subsidy received under TUF as capital in nature. Similar view has been taken by Mumbai Tribunal in the case of ACIT vs. SVG Fashions Ltd. in ITA No.704/Mum/2016 for assessment year 2012-13 decided on 17/07/2018. The ld. A....