TaxTMI 
TaxTMI 
2025 (11) TMI 1765
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....d circumstances of the case and law, the Ld. CIT(A) was right in law in deleting the addition of Rs. 14,42,66,500/- made by the AO in terms of Rule 8D(2)(ii) of the Income Tax Rule, 1962 being expenditure relatable to the income not include in the total income of the assessee while computing income under normal provisions as well as while computing book profit for MAT purposes u/s 115JB of the IT Act.? 3. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in law in deleting the addition of Rs. 49,25,45,342/- made by the Assessing Officer mentioning that the concerned provisions are not an ascertained liabilities,? 4. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in law in deleting the addition of Rs. 9,80,29,086/- on account of amortization of land made by the Assessing office in computing the book-profit u/s 115JB in respect of depreciation claimed on amortization of land unclassified by the assessee even though there is no depreciation allowable on land under Companies Act and no rate of depreciation is provided in Companies Act?" AY 2018-19 "1. Whether, on the fac....
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....-16 ITA.No.1804/Del./2018 Page 177-193 Page 192, Para 9.1 2016-17 ITA No.5299/Del./2019 ITA No.4915/Del./2019 Page 194-211 Page 205-210, Para 23 5. Further he submitted that it is pertinent to mention that in the impugned assessment orders, the AO disallowed the deduction claimed under Section 80-IA on the ground that such deduction is admissible only in respect of profits derived from generation and distribution of power, and not on income classified as 'other income'. He further submitted that however, in the assessee's own case for AYs 2010-11, the ITAT has already adjudicated upon this issue and deleted the similar disallowance made by the AO. 6. Ld. AR submitted that the present appeals for AYs. 2017-18 and 2018-19 involve identical issues and the additions made by the AO have been consistently set aside by the ITAT in earlier years in the assessee's own case, forming a binding precedent. In light of the above facts, and the settled judicial position in the assessee's favour as per the ITAT's own orders, he pleaded that the additions made by the AO are wholly unsustainable in law, contrary to judicial discipline, and therefore liable to be quashed. ....
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.... ITAT in assessee's own case 2006-07 & 2008-09 ITA No.1956 & 1437/Del/2012 ITA No.1402/Del/2012 35-45 Page 43-44, Para 20-21 2009-2010 46-60 Page 58-60, Para 17 2010-11 ITA No.3650/Del/2015 61-96 Page 73-75, Para 25 2011-12 ITA No.297/Del/2016 97-123 Page 115-116, Para 26 2012-13 ITA No. 2786/Del/206 124-137 Page 130, Para 12 2013-14 ITA No. 5211/Del/2016 ITA No. 5106/Del/2016 138-166 Page 160-162, Para 29-30 2016-17 ITA No. 5299/Del/2019 194-211 Page 197-199, Para 9 12. He pleaded that in view of the above facts and the binding precedent in the assessee's case for AY 2016-17, the additions made by the AO in the present appeals are unsustainable in law, illegal, and liable to be quashed. 13. However, ld. AR further invited our attention to the following issues :- * Applicability of Section 14A while computing Book Profit under Section 115JB of the Act o In this regard, ld. AR submitted that the department has sought to invoke the provisions of section 14A of the Act for the purpose of making an adjustment to the book profit computed under section 115JB. This action....
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....vestments, primarily in subsidiaries, joint ventures, and government-mandated entities, which were not acquired for the purpose of earning exempt income, but for business and strategic reasons. These investments are not regularly traded on the stock exchange. Investments details are tabulated below: NHPC LTD AYs 2017-18 & 2018-19 Data of investment in securities which have yield dividend during the year Investment in No. of shares/securities AY 2018-19 AY 2017-18 AY 2016-17 Investments(In No. of shares/securities as on 31st March 2018) Exempt Income earned Investment (In No. of shares/securities as on 31st March, 2017) Exempt Income earned As at 31st march, 2016 Investment in subsidiary - NHDC 10024200 6,28,51,73,400 10024200 2,04,49,36,800 10024200 PTC India Ltd 120000000 3,60,00,000 120000000 3,00,00,000 120000000 Note: From the above it is clear that no fresh purchase made by assessee. * Further, the assessee has not incurred any direct or indirect expenditure in relation to such exempt income during the year under consideration. The receipt of exempt income (like dividend)....
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....hough the Ld. DR placed reliance on the assessment order there is no denial of the fact that the assessee submitted before the assessing officer that the investments were made even out of assessee's own funds or out of interest free funds provided by the government and no part of the borrowed funds were utilised for investment. Further it could be seen from the assessment order, on a perusal of the computation of income, learned Assessing Officer noticed that no disallowance was made by the assessee under the provisions of section 14A of the Act read with Rule 8D of the Rules and without having regard to the accounts of the assessee, learned Assessing Officer straightaway proceeded..................................... Further it has also not brought on record any material to show that the decision of the Co-ordinate bench of the Tribunal in assessee's own case in earlier years has been set aside/ stayed or over ruled by the higher judicial forum. Considering the totality of the aforesaid facts and following the order of the Coordinate bench in the assessee's own case and for similar reasons we find no reason to interfere with the order of CIT(A). Thus the ground of the Revenue ....
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.... Rules. We direct the Assessing Officer to calculate 1% of the average of monthly average of the opening and closing balance of the investment which actually fetch the exempt income. Therefore, we direct the Assessing Officer to determine the actual exempt income and also determine the 1% of the annual average of the investment which actually yield the exempt income. Accordingly, ground no.2 in AYs 2017-18 and 2018-19 are allowed for statistical purposes. 19. With regard to Ground No.3 in AY 2017-18 on account of provision for leave encashment in AY 2017-18, ld. AR submitted that in the present appeal, the Assessing Officer has made a disallowance of Rs. 49,25,45,342/- for the Assessment Year 2017-18 on account of provision for leave encashment. He brought to our notice that the ld. CIT(A) has deleted the said disallowance by placing reliance on the consistent decisions rendered in favour of the assessee in earlier assessment years by both the Hon'ble High Court and the ITAT. It is submitted at the outset that the issue is no longer res integra, as it stands conclusively decided in favour of the assessee in its own case by multiple decisions of the Hon'ble Punjab & Haryana High ....
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....by the Hon'ble Punjab & Haryana High Court in the assessee's own case dated 06.07.2010 (supra) and the Hon'ble Court upheld the allowability of provision for leave encashment, thereby setting a binding precedent. The relevant extract of order of Hon'ble Punjab & Haryana High Court is as under :- "12. The Tribunal while considering the issue in hand had specifically recorded that the provision for gratuity, leave encashment and post-retirement medical benefit had been estimated on actuarial basis and was a liability which was created in praesenti though it was to be discharged at a future date. It was further recorded that the provisions which were created in respect of gratuity, leave encashment and post-retirement medical benefit on actuarial basis had been estimated with reasonable certainty and, therefore, such an estimate cannot be treated to be contingent one. It was also observed that the provision made by the assessee in respect of gratuity, leave encashment and post-retirement medical benefit on actuarial basis cannot be said to be provisions of unascertained liabilities so as to fall under clause (c) of the Explanation to Section 115JB (2) of the Act. 13.....
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....(A) has rightly deleted the disallowances made by the Assessing Officer and the order of the ld. CIT(A) is therefore justified in law and on facts and deserves to be upheld. 27. Considered the rival submissions and material placed on record. We observe that ground no.4 in AY 2017-18 and ground no.3 in AY 2018-19 is squarely covered by the earlier decision of ITAT and Hon'ble Punjab and Haryana High Court. We further observed that this issue has been consistently adjudicated in favour of the assessee by the Hon'ble jurisdictional High Court as well as the ITAT in the assessee's own case across several preceding assessment years wherein identical additions were deleted on similar grounds, as mentioned in table in ld. AR's submissions above. Accordingly, respectfully following the precedent and decision of Hon'ble Punjab & Haryana High Court, we dismiss Ground No.4 and Ground No.3 in AYs 2017-18 & 2018-19 respectively raised by the Revenue. 28. In the result, both the appeals for AYs 2017-18 & 2018-19 filed by the Revenue is partly allowed for statistical purposes. Order pronounced in the open court on this 29^th day of October, 2025. ============= Document 1 NOTE NO. 25....