TaxTMI 
TaxTMI 
2024 (9) TMI 1811
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....e circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to allow depreciation claimed by the assessee on the leased assets viz. new textile machinery amounting to Rs. 6,99,22,335/- which were held by the AO as not true lease transactions but a finance loan transaction garb in the form of lease for getting tax benefit by claiming depreciation on the leased assets." 3."On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to allow the expenditure on dies and moulds amounting to Rs. 36,66,73,918/- which was disallowed by the AO as capital expenditure." 4."On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to include the lease rental income earned by leasing out the dies and moulds of the job workers / suppliers under the head 'profits & gains of business as against assessee's declaring this income as income from 'other sources and directing to allow the depreciation on these moulds and dies." 5."On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in treating the penalty charges recovered on capital goods a....
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.... amounting to Rs. 22,60,000/- and Rs. 90,00,000/- paid as MEDA service charges aggregating to Rs. 1,12,60,000/- as a revenue expenditure." Relief in respect of 80HHC of the Act : 15.(i) "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to exclude excise duty and sales tax from the total turnover while computing deduction u/s. 80HHC of the Act relying on the Bombay High Court in the case of CIT Vs. Sudarshan Chemicals Industries Ltd. 245 ITR 769." (ii) "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO not to exclude 90% of the technical know-how fees amounting to Rs. 1,00,30,883/- from the profits of the business while computing deduction u/s.80HHC of the Act." 16."On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO that interest ought not to be attributable towards earning dividend income and deduction u/s. 80M of the Act ought to be granted without allocating any notional interest or expenditure." 17."On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred i....
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....nses incurred in relation to purchase and upgradation of software amounting to Rs. 2,40,00,595/- as capital expenditure. 6.On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the inclusion of the following while computing 'total turnover' for the purpose of deduction under section 80HHC of the Act: (i)wind power generated captively consumed amounting to Rs. 30,13,33,504/- (ii)miscellaneous receipts in respect of scrap sales, miscellaneous scrap sales and sundry sales aggregating to Rs. 21,93,14,159/- 7.On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding that the entire Duty Entitlement Passbook benefit credited to the Profit and Loss Account amounting to Rs. 53,39,52,123/- ought to be excluded while computing the 'profits of the businesses for the purpose of deduction under section 80HHC of the Act. 8.On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the inclusion of the following while computing 'indirect expenses' attributable ....
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....order u/s. 143(3) of the Act was passed. The assessment was completed assessing the total income at Rs. 743, 74, 08,778/- after making certain disallowances/additions to the returned income of the Assessee. 4.The assessee being aggrieved with this order of the AO preferred an appeal before the Ld. CIT (A), who in turn partly allowed the appeal of the assessee. The assessee and the Revenue being aggrieved with this order of Ld. CIT (A) preferred the present appeals before us. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of both the sides along with grounds raised before us. Assessee's Appeal - ITA No. 1496/Mum/2007 5.Ground No. 1 - Disallowance of Fines and Penalties: Rs. 18,100/- 6.The Ld. Counsel of the Assessee submitted that this Ground of Appeal is not pressed. Accordingly, the ground of appeal of the Assessee is dismissed and order of the Ld. CIT (A) is upheld. 7.Ground No. 2 - Disallowance of pro-rata administrative expenses under section 14A of the Act attributable to earning exempt income: Rs. 2, 41,422/- 8.The Ld. Counsel of the Assessee submitted that this Ground of Appeal is not pressed. Accordingly, the ground of a....
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....ground that allowability of such deduction is not specifically provided in Sec. 40 (a) (iia) of the Act. 23.During the course of appellate proceedings before us the ld. Counsel contended that same issue on identical fact has been adjudicated in favour of the assessee in the earlier year in the various decisions of the ITAT which is as under: (a)ITAT-AY 2001-02 (ITA No.4236/Mum/05) (b)ITAT-AY 1999-00 (ITA No. 2125/Mum/05) (c)ITAT-AY 2000-01 (ITA No. 3055/Mum/05) (d)ITAT-AY 1998-99 (ITA No. 9564/Mum/2004) (e)ITAT-AY 1997-98 (ITA No. 5030/Mum/2001) (f)ITAT-AY 1996-97 (ITA No. 1781/Mum/ 2000) (g)ITAT AY 1995-96 (ITA No. 3493/Mum/1999) (h)Punj Sons (P) Ltd. vs. DCIT (74 TTJ 596) (Del) The ld. D.R supported the order of the lower authorities. 24.Heard both the sides and perused the material on record. We have perused the decision of the ITAT vide ITA No. 4236/Mum/2005. The relevant extract of the decision is reproduced as under: "52. With regard to Ground No. 4 which is in respect of disallowance of wealth- tax payment, Ld. AR of the assessee brought to our notice that the issue in....
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....rating the facts as discussed above we have perused the decision of ITAT vide ITA No.4236/Mum/2005. The relevant extract of the decision of the ITAT is reproduced as under: "56. With regard to Ground No. 5 which is in respect of disallowing deduction under section 80-O of the Act in respect of 40% of royalty amount received. Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Coordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assesse and against the department." This is a recurring issue and following the decision of the ITAT on the similar issue and facts as decided in the earlier years as referred supra this ground of appeal of the assessee is allowed." 22.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate Bench in this year also. Resultantly, ground no. 4 raised by the Assessee is allowed. 23.Ground No 5 - Treating expenditure in respect of software expenses as capital in n....
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....of enduring nature and same were incurred for maintenance, up gradation and purchase and renewable of the existing software etc. We find that the lower authorities has not established that now such kind of software expenses have been treated of the nature of the capital expense. Further we have perused the decision of the Hon'ble Delhi High Court in the case of Amway India Enterprises (2012) as discussed supra has overruled the decision of special bench by holding that the expenditure of purchase of software application is revenue expenditure. We have also considered the decision of Hon'ble Delhi High Court in the case of Asahi India Safety Glass Ltd. Vs. CIT(2011) 15 taxmann.com 382 (Delhi) on the similar proposition wherein it is held that such software expenses were recurring in nature expended either to upgrade system or run system. In the light of the above facts and findings we consider that decision of ld. CIT(A) in sustaining the addition after relying on the special bench in case of Amway India Enterprises as discussed supra is not justified. Therefore, the claim of the assessee is allowed. This ground of appeal of the assessee is allowed." 29.In view of the above, as t....
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....such an inclusion in the total turnover will result into double addition, because it is already included in the computation of the profit thus, respectfully following the earlier year's order, we also hold that the internal consumption of power will not form part of the total turnover for the purpose of computing the relief under section 80HHC. Insofar as the exclusion of the scrap sale is concerned, though this issue has been decided against the assessee by the Tribunal in earlier years, however, the Hon'ble Supreme Court in its latest judgment in Civil Appeal no. 5592 of 2008, vide judgment and order dated 10th May 2014, rendered in CIT v/s Punjab Stainless Steel Industries, has held that sale proceeds of scrap cannot be included as part of the total turnover for the purpose of section 80HHC. The Hon'ble Supreme Court has discussed this exclusion of the scrap sales from the turnover in a very detail manner. Thus, respectfully following the aforesaid judgment of the Hon'ble Supreme Court, we set aside the impugned order passed by the learned Commissioner (Appeals) and direct the Assessing Officer to exclude the scrap sale from the total turnover while computing the ded....
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....r: "5.2 A perusal of the impugned order shows that the Assessing Officer had Included scrap sales generated out of raw material used in manufacturing Rs. 43,92,32,708/, miscellaneous scrap sales consisting of packing material like empty barrels, steel covers, etc. amounting to Rs. 4,82,77,276/- and sundry sales not covered in Items above amounting to Rs. 2,44,358/- In the first appellate proceedings, the CIT(A) held that the sale of aforesaid items should be excluded from total turnover for the purpose of calculating deduction u/s. 80HHC of the Act, as in Assessment Year 1995-96 these very items were excluded from total turnover while computing deduction u/s 80HHC of the Act. In assessment year 1995-96, the assessee carried the issue in appeal before the Tribunal in ITA No.3144/Mum/1999 (supra). The Co-ordinate Bench after placing reliance on the decision rendered by Hon'ble Supreme Court of India in the case of CIT vs. Punjab Stainless Steel Industries Ltd. 364 ITR 144 decided the issue in favour of assessee. Since, in the impugned assessment year there is no distinguishing feature, we see no reason to take a different view. Consequently, additional ground No.1 of the....
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....e bench of the Tribunal in Assessee's own case in AY 2002-03 (ITA No. 3043/Mum/2010) by relying on the decision of the Hon'ble Supreme Court in the case of Excel Industries Limited [2013] 358 ITR 295 (SC). 49.On the other hand, the ld. D.R supported the order of lower authorities. This issue with respect to taxability of DEBP benefit was decided in favour of the Assessee in A.Y. 2002-03 (ITA No.3043/Mum/2010). We observe that facts of this year are similar to A.Y. 2002-03. For reference, we are reproducing the decision of Coordinate Bench in Assessee's own case for A.Y. 2002-03 as under: - "53. Heard both the sides and perused the material on record. The facts and findings on the issue of taxability is not fully discussed in the order of the assessing officer and the CIT (A) therefore we restore this issue to the file of the assessing officer to decide the same after examination in accordance with the decision of Hon'ble Supreme Court in the case of Excel Industries Ltd. (2013) 358 ITR 295 (SC). Therefore, this ground of appeal of the assessee is allowed for statistical purpose." 50.In view of the above, as the issue is recurring in nature and the Ld. DR is not able ....
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....ards earning Dividend Income (Rs. 12,71,59,800) and Income from Mutual Fund Units (Rs. 4,39,28,580) as provided at page no. 28-29 of the Assessment Order. In view of the decision of the Hon'ble Bombay High Court in the case of Reliance Industries Ltd. [2017] 86 taxmann.com 24, we direct the Assessing Officer to not deduct any amount of expenditure from Dividend Income (Rs. 12,71,59,800) and Income from Mutual Fund Units (Rs. 4,39,28,580) and accordingly allow deduction under section 80M of the Act. The ground of appeal of the Assessee is accordingly allowed. 56.Ground No. 12 - Disallowance of the provision in respect of 'Go for Gold Scheme': Rs. 2 Crores. 57.The Ld. Counsel of the Assessee submitted that the appellant had launched a sales promotion scheme called "Go for Gold Scheme" wherein the payment of incentive was based on the number of vehicles purchased by the dealers. At the close of Financial Year 2002-03, the Assessee worked out that an amount of Rs. 2,37,70,500/- would be payable to the dealers under the said scheme, a detailed working of which was provided at page no. 156-158 of the paperbook. However, the Assessee only made a provision of Rs. 2,00,00,000 out of t....
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....al Depository Receipts (GDR) in the previous year relevant to assessment year 1995-96. The Assessee had incurred an expenditure of Rs. 11, 71, 99,600/- in previous year relevant to AY 1995-96 in connection with issue of GDR which were utilized for business expansion of the Assessee. The Assessee claimed expenditure under section 37(1) of the Act in AY 1995-96 which was disallowed relying on the decision of the Hon'ble Supreme Court in the case of Brooke Bond India Ltd. (225 ITR 795). The Assessee alternatively requested to allow deduction under section 35D of the Act which was not considered in AY 1995-96 since expansion of industrial undertaking was not completed. 64.The expansion of the business industrial undertaking completed in AY 199798 wherefrom the Assessee has claimed deduction under section 35D of the Act of Rs. 1, 17, 19,960/- being 1/10th of the expenses incurred on issue of GDR. 65.This issue is recurring in nature and has been decided in favour of assessee in A.Y. 1997-98 to 2002-03. We observe that the deduction claimed is only in continuation of the claim under section 35D in the earlier years. The facts of this year are similar to the other years decided in f....
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....ase laws:- a)CIT vs. Shree Synthetics Ltd. (162 ITR 819) b)Gujarat Narmada Valley Fertilizers Co. Ltd. vs. DCIT (ITA No.1463/Ahd/ 2007 c)S.S.I. Limited vs. DCIT (85 TTJ 1049) (Chn) 50.On the other hand, Ld. DR relied on the order of the Assessing Officer. 51.Considered the submissions and material placed on record, from the submissions of the parties, we observe that the assessee has incurred expenses in connection with the issue of GDR and these expenses are allowable only when new or expansion of industrial undertaking. During the current Assessment Year, the assessee has completed the expansion of the Industrial undertaking; the expenses are allowable deduction u/s 35D of the Act, since the expenses are incurred during previous AY and expansion was completed only this AY, the relevant expenses are allowable in this Assessment Year. In the similar facts, the ITAT Ahmedabad Bench has decided the issue in favour of the assessee, in the case of Gujarat Narmada Valley Fertilizers Co. Ltd., v. DCIT (supra), the same reproduced below:- "24. As regards Ground no. 10 of the assessee's appeal; the assessee has claimed deduction u/s. 35....
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....fficer under section 35D. 25.The learned CIT (A) confirmed the action of the AO. 26.The learned counsel for the assessee argued that the assessee has been allowed the identical claim since 1995-96 by the Income- tax Department and it is only in the impugned year where the Department has doubted its decision when there is no change of the facts and circumstances of the case. 27.the learned DR, on the other hand, argued that res judicata does not apply. 28.We have heard the rival contentions and perused the facts of the case. From the reading of the provisions contained in section 35D and the arguments of both the parties, we are of the view that there are no change in the facts as in the last 7 years and, therefore, relying upon the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang vs. CIT 193 ITR 321, it would not be at all appropriate to allow the position to be changed in a subsequent year. Therefore, in the circumstances and facts of the case, we direct the AO to allow the claim of the assessee and accordingly the order of the learned CIT (A)is reversed. Thus, Ground no.10 of the assessee' appeal is allowed." ....
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....8952/Mum/2004) (e)ITAT - AY 1997-98 (ITA No. 5030/Mum/2001) We have perused the decision of ITAT vide 4236/Mum/2005.The relevant extract of the decision is reproduced as under:- "10.Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee in the A.Y. 1997-98. While deciding the issue, the Coordinate Bench of the Tribunal in ITA. No. 5030/Mum/2001 dated 13.04.2023, held as under: - "56. with regard to Ground no. (j) Which is in respect of holding that the lease agreement with JCT Ltd is genuine and the assessee company is entitled to depreciation on the assets leased to JCT Limited.Ld. AR of the assessee submitted that Lease agreement with JCT Limited dated 26 March 1996 - BAL purchased assorted items of equipments at the original cost of purchase,i.e.Rs..6,92,22,335/- the assets were leased back to JCT. Further, he brought to our notice the decision of the Coordinate Bench in assessee's own case for the Assessment Year 1996-97 and by referring to Para No. 24 he submitted that depreciation on such assets claimed and allowed by the order of the Tribunal in the ear....
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....regards the issue raised in (c) & (d) above, the CIT(A) answered the question in negative holding that the transaction of purchase of assets from HSEB and PSEB and leasing it back to the State Electricity Board is not a hire purchase agreement nor it is a loan transaction against security of the assets. We, concur with the detailed and reasoned findings of the CIT (A) on this issue, they are not reproduced for the sake of brevity. The Hon'ble Supreme Court of India in the case of CIT vs. K.Y. Pillah & Sons, 63 ITR 411 and Hon'ble Delhi High Court in the case of CIT vs. Global Vantedge P. Ltd., 354 ITR 21 held that where the Tribunal concur with the view of CIT(A), the findings of CIT(A) need not be reproduced 25.4 We find that in the case of CIT vs. Punjab State Electricity Board, wherein after the sale of asset the same asset was leased back to the Punjab State Electricity Board and the Electricity Board claimed deduction in respect of lease rental, the Department allege that sale of asset to third party and the same asset being taken on lease for claiming deduction in respect of lease rental is a colourable device to reduce tax liability and have denied the same.....
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.... honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5.The Hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 173 FIR 479 and Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667. It: was further observed that the word "device" or "sham" could not be used to defeat the effect of a legal situation. 6.In view of the finding recorded by the Tribunal in the facts of this case, no substantial question of law arises. The appeal is dismissed." 25.5 Thus, the Hon'ble Court held that lease agreement where the asset is leased back to the vendor is not a ploy to reduce tax incidence and is an accepted arrangement. In view of our above findings, we see no merit in Ground No.11 raised by the Revenue; hence, the same is dismissed." 59. Respectfully following the above decision and following the principle of consistency, th....
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....der:- ITA Nos. 3043 & 2899/Mum/2010 (Assessment year: 2002-03) "62.Heard both the sides and perused the material on record. The ld. Counsel at the outset brought to our notice that similar issue on identical facts has been adjudicated in favour of the assessee by the ITAT constantly in the earlier years as under: (a)ITAT-AY 2001-02 (ITA No. 4236/Mum/05) (b)ITAT-AY 1999-00 (ITA No. 2125/Mum/05) (c)ITAT-AY 2000-01 (ITA No. 3055/Mum/05) (d) ITAT-AY 1998-99 (ITA No. 8952/Mum/2004) (e) ITAT-AY 1997-98 (ITA No 5030/Mum/2001) (f)ITAT AY 1996-97 (ITA No. 1781/Mum/2000) (g)ITAT AY 1995-96 (ITA No. 3493/Mum/1999) (h)ITAT AY 1994-95 (ITA No. 6964/Mum/2014) (i)ITAT AY 1993-94 (ITA No.6963/Mum/2014) (j)CIT vs. TVS Motors Ltd [2014] 364 ITR 1 (Mad) (k)Malerkotla Steels & Alloys P Ltd (336 ITR 49) (P&H) (l)CIT vs. Sunbeam Auto Ltd [2012] ITA 351 of 2012 (Delhi) We have perused the decision of ITAT vide ITA No. 4236/Mum/2005.The relevant extract of the decision is reproduced as under: "34. During the course of assessment, the AO has disallowed the deductio....
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....rom other sources' and directing to allow the depreciation on these moulds and dies. 76.During the year under consideration, Assessee had leased dies and moulds to its job workers /suppliers. The assessee claimed depreciation thereon of Rs. 1, 20, 12,692/- as deduction under section 57 of the Act since the lease rent income was offered under the head 'income from Other Sources'. 77.The Assessing officer, in the assessment order passed under section 143(3) of the Act, allowed depreciation while computing 'Business Income' while continuing to tax the lease rent under the head 'Income from other sources', after observing that having regard to the close nexus of leasing of dies and moulds with assessee's business, deduction for depreciation is to be allowed while computing income under the head 'Profits and Gains of Business or Profession'. The CIT(A), following the order for assessment year 2000-01 in assessee's own case, directed the AO to include the income from lease rent received under the head 'Profits and Gains of Business or Profession'. No further appeal was filed by the Revenue against the direction of the CIT (A) in AY 2000-01. 78.We have heard the contentions of bo....
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....TA No. 2125/Mum/05) (c)ITAT-AY 2000-01 (ITA No. 3055/Mum/05) (d)ITAT AY 1998-99 (ITA No. 8952/Mum/2004) (e)ITAT AY 1997-98 (ITA No. 5030/Mum/2001) (f)ITAT AY 1996-97 (ITA No. 1781/Mum/2000) (g)ITAT AY 1995-96 (ITA No. 3493/Mum/1999) (g) ITAT- AY 1994-95 (ITA No. 6964/Mum/2014) (i)ITAT - AY 1993-94 (ITA No.6963/Mum/2014) (j)CIT vs. Barium Chemicals Ltd. [1987] 168 ITR 164 (AP) We have perused the decision of ITAT vide ITA No. 4236/Mum/2005.The relevant extract of the decision is reproduced as under: "16. With regard to Ground No. 4 which is in respect of allowing penalty charges recovered from suppliers of capital goods as capital receipts, Ld. AR of the assessee brought to our notice that the issue in appeal has been considered by the Co-ordinate Bench of this tribunal and decided the issue in favour of the assessee and against the revenue." Following the decisions of ITAT as referred above; we don't find any merit in this ground of appeal of the revenue therefore the same stand dismissed." 82.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to d....
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....3/Mum/2014) (j)ITAT-AY 1991-92-(ITA No.6324/Mum/2010) (k)ITAT-AY 1990-91-(ITA No.6325/Mum/2010) (l)CIT vs. TVS Motors Ltd [2014] 364 ITR 1 (Mad) (Ratio applied) (m)Malerkotla Steels & Alloys P Ltd [2011] 336 ITR 49 (P&H) (Ratio Applied) We find that this is recurring issue and same is decided in favour of theassesseebytheITATintheearlieryears.Therelevantextractofthedecision is reproduced as under: "20. With regard to Ground No. 5 which is in respect of allowing deduction of expenditure incurred in respect of jigs and fixtures as revenue expenditure, Ld. AR of the assessee brought tour notice that the issue in appeal has been considered by the Coordinate Bench of this tribunal in assessee's own case and decided the issue in favour of the assesse and against the department. Following the decision of ITAT as discussed above, we don't find any merit in this ground of appeal the revenue therefore the same stand dismissed. 86.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hes....
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....ision, we do not find any merit in the appeal of the revenue. Therefore, this ground of appeal of the revenue stand dismissed. Following the decision of the ITAT as referred (supra) we allow this ground of appeal of the assessee." 90.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate Bench in this year also. Resultantly, ground no. 7 raised by the revenue is dismissed. 91.Ground No. 8 -Allowing deduction in respect of foreign travelling expenses of wife of Managing Director: Rs. 1, 72,455/- 92.Ground no. 8 raised by the revenue pertains to Ld. CIT (A) allowing deduction in respect of foreign travelling expenses of wife of managing director while accompanying the managing director for his business meeting during his travelling abroad. This issue is recurring in nature and has been decided in favour of revenue in A.Y. 1998-99 to 2001-02. We observe that facts of this year are similar to the other years decided against the assessee. For reference, we are reproducing the dec....
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....l that it has been incurred for the purposes of business. However, the jurisdictional high court has clarified that the case needs to be decided on its own facts primarily considering the business expediency. It was further held that this kind of claim is to be allowed only if it is connected with the business of the assessee. 25.3 In the instant case, we notice that the Managing director Shri Rahul Bajaj has visited Netherland & UK for attending India Growth fund Board Meeting. The Board resolution with regard to the expenses to be incurred on wife of Shri Rahul Bajaj reads as under:- "Further Resolved that air-fare and other expenses in connection with the above visit (including those of Smt. Bajaj) be and are hereby authorized to be borne by the Company." We notice that the Board resolution did not bring out any business expediency. Further, the assessee has also not proved existence of any commercial or business expediency in incurring the foreign travel expenses of wife of M D except producing copy of Board resolution, in which also, no reason was given. There should not be any doubt that this is a factual aspect and the facts prevailing in each fore....
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....AY 200203 as under:- ITA Nos. 3043 & 2899/Mum/2010 (Assessment year: 2002-03) "16.During the course of appellate proceedings before us the ld. Counsel submitted that the Rule 8D cannot be applied in the case of the assessee since assessee has not borrowed any amount for making investment from which it has earned the exempt income. The assessee also submitted that it was having own funds of Rs. 28,655.77 crores against investment of Rs. 1,966 crores. He further submitted that assessee has borrowed funds of Rs. 626.09 crores out of which Rs. 588.96 crores represented sale tax deferral liability under the package scheme of incentives which was not interest bearing. The ld. Counsel also referred the decision of ITAT in the case of assessee vide ITA No. 2125 & 1399/Mum/2005 & ITA No. 3055 & 2655/Mum/2005 dated 28.11.2023 wherein similar issue has been adjudicated in favour of the assessee. 17. We have perused the decision of the ITAT as referred supra. The relevant extract of the decision is reproduced as under: "53. This is undisputed fact that the assessee company was having sufficient own interest free fund which were more than investment made on w....
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....ure and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate Bench in this year also. Resultantly, ground no. 9 raised by the revenue is dismissed. 98.Ground No. 10 - Deleting the disallowance of Rs. 5, 51,121/- made under section 14A of the Act while computing book profit u/s. 115JB of the Act. 99.Ground no. 10 raised by the revenue pertains to Ld. CIT (A) deleting the disallowance made by the AO amounting to Rs. 5, 51,121/- under section 14A of the Act while computing book profit under section 115JB of the Act. In the Assessment Order, the Assessing Officer computed disallowance under section 14A of the Act. The said disallowance was made while computing income under the normal provisions of the Act and also while computing book profits under section 115JB of the Act. In this regard, the Ld. Counsel of the Assessee placed reliance on the decision of the Special Bench of the Tribunal in the case of ACIT Vs. M/s. Vireet Investments Pvt Ltd. (165 ITD 27) (Delhi - Trib.) (SB)had held that the computation mechanism provided under Rule 8D(2) of the ....
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....were crystallized and accordingly the same was debited to profit and loss account of the year relevant to AY 2003-04. The Tax Auditor reported the same in Tax Audit Report as prior period expenses. The Assessee claimed deduction for such expenses in the year of debit i.e. AY 2003-04. The Assessing Officer however allowed deduction of such expenditure in AY 2002-03 as the expenditure pertained to AY 2002-03. The Ld. CIT(A) deleted the disallowance made in AY 2003-04 on the ground that prior period expenditure ought to be allowed as a deduction in the year of debit. 106.This issue is recurring in nature and has been decided in favour of assessee in A.Y. 1998-99, A.Y. 1999-00 and A.Y. 2002-03. We observe that facts of this year are similar to the other years decided in favour of assessee. For reference, we are reproducing the decision of Coordinate Bench in assessee's own case for AY 200203 as under:- ITA Nos. 3043 & 2899/Mum/2010 (Assessment year: 2002-03) "74.Heard both the sides and perused the material on record. During the course of appellate proceedings before us the ld. Counsel submitted that these expenses were crystallised during the year and accordingly,....
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..... CIT(A) on this issue, therefore, this ground of appeal of the revenue is dismissed." Following the decision of ITAT as discussed above, we don't find any merit in this ground of appeal by the revenue therefore the same stand dismissed." 107.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate Bench in this year also. Accordingly deduction of prior period expenditure ought to be allowed in the year of debit. Resultantly, ground no. 12 raised by the revenue is dismissed. Correspondingly, as per the consistent basis on which prior period expenditure is being allowed in the year of debit, the prior period expenditure debited in AY 2004-05 which has been allowed by the AO in this year would need to be added back in case the same is allowed to the assessee in AY 2004-05 being the year of debit. 108.Ground No. 13 - Allowing deduction in respect of expenditure incurred in foreign currency where no TDS is deducted. 109.Ground no. 13 raised by the revenue pertains to deleting the ....
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....o differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate Bench in this year also. Resultantly, ground no. 13 raised by the revenue is dismissed. 112.Ground No. 14 - Allowing deduction in respect of electricity services connection charges: Rs. 1, 12, 60,000/- 113.Ground no. 14 raised by the revenue pertains to Ld. CIT(A) allowing deduction for expenditure incurred towards electricity service connection charges amounting to Rs.22,60,000/- and Rs. 90,00,000/-. During the year under consideration, an amount of Rs. 22, 60,000/- was paid to Maharashtra State Electricity Board ('MSEB') for laying cables to connect wind farms with MSEB grid. The company has installed windmills for captive consumption. The power generated was transported to MSEB grid. MSEB in order to connect the locations of wind farms with the grid lays cables for which it takes outright contribution. The cables laid down were a property of MSEB. 114.Further, an amount of Rs. 90, 00,000/- was paid to Maharashtra Energy Development Agency ('MEDA') in connection with the electricity service connection charges....
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....ecial EHV supply facilities to assessee's requirements. The expenditure is certainly in the nature of providing enduring advantage' over a period of several years". The learned DR has not brought on record any evidence to establish that the assessee is the owner of the electricity line from Aurangabad sub-station to the assessee's unit. The learned counsel for the assessee made a statement at Bar that the assessee is not the owner of the said electricity line and has not claimed any depreciation on this payment of Rs.1,40,00,000/. This statement made at Bar remain uncontroverted. In view of these facts, we hold that the assessee is not the owner of the electricity line, for which the assessee made the payment of Rs.1, 40, 00,000/-." After considering the above facts and finding we don't find any reason to interfere in the decision of ld. CIT (A), therefore, this ground of appeal of the revenue stand dismissed." 116.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate....
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....by Hon'ble Supreme Court of India in the case of CIT vs. Laxmi Machine Works, 290 ITR 667. The facts germane to the issue raised the present appeal are admittedly identical to the facts in Assessment Year 1995-96, therefore, following the decision of Co-ordinate Bench the ground No.1 raised in the appeal is allowed for parity of reasons." Following the decision of ITAT as supra we don't find any merit in this ground of appeal, therefore, the same stand dismissed." 119.In view of the above, as the issue is recurring in nature and the Ld. DR is not able to differentiate the findings of the Coordinate Benches with the facts and law of this year, we do not have any hesitation in following the findings of Coordinate Bench in this year also. Resultantly, ground no. 15(a) raised by the revenue is dismissed. 120.Ground No. 15 (b) - Excluding 90% of the technical know-how fees amounting to Rs.1, 00, 30,883/- from the profits of the business while computing deduction u/s.80HHC. 121.Ground no. 15(b) raised by the revenue pertains to Ld. CIT(A) not excluding 90% of the technical know-how fees amounting to Rs.1,00,30,883/- from the profits of the business while computing d....
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.... of the Act ought to be granted by allocating interest expenditure. Ground No. 17 -Apportioning employee emoluments and miscellaneous expenses towards earning dividend income in the ratio of dividend income to the total income. 124.Ground no. 16 and 17 raised by the revenue pertains to attributing interest and administrative expenditure towards earning taxable dividend income and allowing deductions under section 80M after reducing deduction of the expenditure incurred from the taxable income. During the year under consideration, the Assessee has offered to tax Dividend Income (Rs. 12,71,59,800) and Income from Mutual Fund Units (Rs. 4,39,28,580) under the head Income from Other Sources as the said income was not exempt from tax in the year under consideration. The Assessee has not claimed any deduction for expenses against the said income. 125.In the Assessment Order, the Assessing Officer computed adhoc deduction of interest and administrative expenditure without proving that such expenditure was incurred wholly and exclusively for earning dividend income / income from mutual fund units. The Assessing Officer accordingly, reduced the said expenditure while computing Income ....